I. SUMMARY OF RECOMMENDATION

On May 7, 2019, Plaintiff Hoist Fitness Systems, Inc. (“Hoist”) filed a Motion and Joint Stipulation pursuant to Local Rule 37-2 seeking to strike portions of the rebuttal expert reports served by Defendant TuffStuff Fitness International, Inc. (“TFI”). ECF Docket No. (“Dkt.”) 195. On May 16, 2019, the parties filed supplemental briefs pursuant to Local Rule 37-2.3. Dkts. 196, 197. For the reasons set forth below, the Court recommends Hoist's Motion to Strike be GRANTED IN PART and DENIED IN PART.

II. BACKGROUND

On April 3, 2017, Hoist filed a Complaint against TFI for patent infringement. Dkt. 1. Hoist alleges TFI's new Bio-Arc exercise equipment line infringes six Hoist patents and seeks injunctive relief and damages. Id.

On July 25, 2017, TFI filed an Answer and Counterclaim against Hoist. Dkt. 28.

On August 15, 2017, Hoist filed an Answer to the Counterclaim. Dkt. 30.

On November 15, 2017, the Court issued a Scheduling Order. Dkt. 59. The Scheduling Order was subsequently modified on April 10, 2018 and July 11, 2018 pursuant to the parties' joint requests and the jury trial was continued to September 10, 2019. Dkt. 75, 94.

On December 21, 2018, the Court granted the parties' joint request and modified the Scheduling Order establishing the following relevant discovery dates: Fact Discovery Cut-Off of February 15, 2019, Initial Expert Reports due March 8, 2019, Rebuttal Expert Reports due March 29, 2019, and Expert Discovery Cut-Off of April 12, 2019. Dkt. 145.

On March 8, 2019, the parties exchanged initial expert reports, including the following relevant reports:

On March 29, 2019, TFI served the following reports rebutting the Lenz Initial Report:

On April 2, 2019, Hoist served a subpoena for documents on Mr. Smith seeking responses by April 9, 2019 (“Smith Subpoena”). Garner Decl., ¶ 8, Ex. 10. In Request No. 5 of the Smith Subpoena, Hoist requested:

Id. at Request No. 5. On April 9, 2019, TFI served Objections to the Smith Subpoena and specifically objected to Request No. 5 on the grounds (a) there is insufficient time to respond under Federal Rule of Civil Procedure 45, and (b) “it seeks documents and information protected by the attorney-client privilege and work product doctrine pursuant to Federal Rules of Civil Procedure 26(b)(3)(A)-(B) and 26(b)(4)(B)-(C).” Garner Decl., ¶ 9, Ex. 11.

*2 On April 9, 2019, Hoist deposed Dr. Sternlicht. Garner Decl., ¶ 11, Ex. 13.

On April 10, 2019, TFI deposed Mr. Lenz. Manning Decl., ¶ 16, Ex. 20.

On April 11, 2019, Hoist deposed Mr. Smith. Garner Decl., ¶ 17, Ex. 17.

On April 15, 2019, Hoist's counsel sent an email to TFI's counsel requesting that TFI agree to withdraw portions of the Smith and Sternlicht Rebuttal Reports. Garner Decl., Ex. 1 at 11. On April 18, 2019, TFI's counsel responded stating the rebuttal reports were proper and declined to withdraw any portions thereof or produce any further documents. Id. at 10.

On April 22, 2019, counsel for both parties met and conferred telephonically regarding the Smith and Sternlicht Rebuttal Reports. Garner Decl., Ex. 1 at 7; Manning Decl., ¶¶ 11-14.

On May 7, 2019, Hoist filed the instant Motion and Joint Stipulation to strike the following:

Dkt. 195. On May 16, 2019, the parties filed supplemental briefs. Dkts. 196, 197. The matter thus stands submitted.

III. DISCUSSION

As an initial matter, although Hoist labels the Motion a motion to “strike,” Hoist seeks to exclude evidence on the ground that it was not timely disclosed as required by Federal Rule of Civil Procedure 26. The Motion is, therefore, properly construed as a motion for evidentiary sanctions pursuant to Federal Rule of Civil Procedure 37(c).

A. APPLICABLE LAW

1. Federal Rule of Civil Procedure 37(c)

Federal Rule of Civil Procedure Rule 37(c)(1) “forbid[s] the use at trial of any information required to be disclosed by Rule 26(a) that is not properly disclosed.” Fed. Trade Comm'n v. Qualcomm Inc., No. 17-CV-00220-LHK, 2018 WL 6522134, at *1 (N.D. Cal. Dec. 11, 2018) (citing Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001)). The moving party bears the burden of showing a discovery violation has occurred. See Hernandez ex rel. Telles–Hernandez v. Sutter Med. Ctr. of Santa Rosa, 2008 WL 2156987, at *13 (N.D. Cal. May 20, 2008). Once that burden is satisfied, the burden shifts and the nonmoving party must prove that its failure to comply with Rule 26 was either justified or harmless. Yeti by Molly, 259 F.3d at 1107.

In addition, the Ninth Circuit has articulated a five-part test for evaluating whether a party's requested evidentiary sanctions are appropriate: (1) the public's interest in expeditious resolution of litigation; (2) the court's need to manage its dockets; (3) the risk of prejudice to the party seeking sanctions; (4) the public policy favoring disposition of cases on their merits; and (5) the availability of less drastic sanctions. Anheuser-Busch, Inc. v. Natural Beverage Distribs., 69 F.3d 337, 348 (9th Cir. 1995).

2. Expert Rebuttal Reports

*3 Rebuttal disclosures of expert testimony are “ ‘intended solely to contradict or rebut evidence on the same subject matter identified by another party’ in its expert disclosures.” In re High-Tech Emp. Antitrust Litig., 2014 WL 1351040, at *3 (N.D. Cal. Apr. 4, 2014) (quoting Fed. R. Civ. P. 26(a)(2)(D)(ii)). “Rebuttal testimony cannot be used to advance new arguments or new evidence.” Huawei Techs., Co, Ltd v. Samsung Elecs. Co, Ltd., 340 F. Supp. 3d 934, 995 (N.D. Cal. 2018) (citation omitted). Thus, portions of an expert's rebuttal that opine on subjects that were not addressed in the expert report purportedly being rebutted may be excluded. Plumley v. Mockett, 836 F. Supp. 2d 1053, 1065 (C.D. Cal. 2010) (citing First Years, Inc. v. Munchkin, Inc., 575 F. Supp. 2d 1002, 1008 (W.D. Wis. 2008)).

“The test of whether an expert's opinion constitutes rebuttal or a ‘new’ opinion, however, is not ‘whether a rebuttal expert employs new testing or methodologies’ but instead, whether ‘a rebuttal attempts to put forward new theories outside the scope of the report it claims to rebut.’ ” Huawei Techs., Co, Ltd, 340 F. Supp. 3d at 995 (citation omitted). Therefore, “offering a different, purportedly better methodology is a proper way to rebut the methodology of someone else.” TCL Commc'ns Tech. Holdings Ltd. v. Telefonaktenbologet LM Ericsson, 2016 WL 7042085, at *4 (C.D. Cal. Aug. 17, 2016). Ultimately, “[r]ebuttal testimony is proper as long as it addresses the same subject matter that the initial experts address.” Perez v. State Farm Mut. Auto Ins. Co., 2011 WL 8601203, at *8 (N.D. Cal. Dec. 7, 2011).

B. ANALYSIS

1. Mr. Smith's Rebuttal Opinions on Invalidity are Proper Rebuttal of Mr. Lenz's Initial Report

Hoist argues the Court should strike paragraphs 2, 3, 49, 51–68, 81–82, 87, and 140 from the Smith Rebuttal Report. Hoist claims paragraphs 2, 3, 49, 51–68, 81–82, 87, and 140 of the Smith Rebuttal Report contain new opinions regarding invalidity and argues all of Mr. Smith's opinions regarding invalidity should have been included in his initial report.

In the Smith Initial Report, Mr. Smith opined Hoist's patents were invalid for several reasons, including lack of written description, lack of enablement, and indefiniteness. Ex. 14 at ¶¶ 7-20, 46-94, 98-115. In the Lenz Initial Report, Mr. Lenz opined TFI's Bio-Arc machines infringe Hoist's patents because each of “the Accused Devices [have] a ‘user support pivot axis,’ or a ‘central pivot axis’ (as demanded by the particular claim) and a corresponding ‘vertical gravitational center line,’ as construed by the Court's claim construction order.” Ex. 16, Ex. 1 at 43. In the Smith Rebuttal Report, Mr. Smith challenges Mr. Lenz's methodology for determining the theoretical pivot axis and, therefore, infringement. Ex. 15 at ¶¶ 55-68. Mr. Smith notes Mr. Lenz's reliance on this methodology supports Mr. Smith's opinions in the Smith Initial Report regarding invalidity because Mr. Lenz's methodology renders the patents invalid due to lack of written description, lack of enablement, and indefiniteness. See e.g., id. at ¶¶ 81, 82, 87.

Hoist argues invalidity and non-infringement are separate issues and therefore any invalidity opinions in the Smith Rebuttal Report go beyond rebutting the Lenz Initial Report regarding infringement and must be stricken. See Dkt. 197 at 1-2. However, Mr. Smith's reference to his prior invalidity opinions in order “to contradict, impeach [and] defuse the impact” of the methodologies and terminology used by Mr. Lenz in his initial report does not go beyond the proper scope of rebuttal. See Huawei Techs., Co, Ltd, 340 F. Supp. 3d at 995. Notably, Hoist fails to identify any new invalidity opinion in the Smith Rebuttal Report. JS at 26-29. Rather, Hoist conclusorily states “Invalidity opinions included in the [Smith] Rebuttal Report are improper because they were not previously disclosed in the [Smith] Initial Report.” JS at 28.

*4 In addition, the cases cited by Hoist in support of striking invalidity opinions from rebuttal reports regarding infringement are materially distinguishable from this case. In MediaTek, the Court granted plaintiff's motion to strike portions of an expert's damages report discussing new prior art because the prior art was not asserted in the defendant's invalidity contentions or the expert's initial invalidity report. MediaTek Inc. v. Freescale Semiconductor, Inc., No. 11-CV-5341 YGR, 2014 WL 690161, at *2 (N.D. Cal. Feb. 21, 2014). Similarly, in Dimension One Spas, the court struck an expert's invalidity opinion where the expert “did not opine and did not indicate that he intended to opine about patent validity in his initial report, [because] his subsequent invalidity report cannot be supplemental to the initial report.” Dimension One Spas, Inc. v. Coverplay, Inc., No. 03CV1099-L(CAB), 2008 WL 4165034, at *12 (S.D. Cal. Sept. 5, 2008). Here, Smith disclosed all of his invalidity opinions in the Smith Initial Report and did not opine on any new theories of invalidity in the Smith Rebuttal Report.

Finally, Hoist has deposed Mr. Smith regarding all of his invalidity opinions and proposed rebuttal testimony. Therefore, to the extent any reference to invalidity does go beyond the scope of proper rebuttal, TFI has sufficiently shown such reference in the Smith Rebuttal Report is harmless. See Yeti by Molly, 259 F.3d at 1107.

Hence, Hoist's Motion to Strike paragraphs 2, 3, 49, 51–68, 81–82, 87, and 140 from the Smith Rebuttal Report should be DENIED.

2. Mr. Smith's AdobeFlash Native Files are Not Protected Work Product and Must Be Produced

Hoist argues the Court should strike exhibits M-Q and paragraphs 88-95 from the Smith Rebuttal Report. JS at 29-33. Exhibits M-Q are animations Mr. Smith created using AdobeFlash and paragraphs 88-95 analyze those animations. TFI produced the animations but declines to produce the AdobeFlash native files on the grounds they constitute protected work product pursuant to Federal Rule of Civil Procedure 26(b)(4)(B). JS at 37-44.

a. Applicable Law

Pursuant to Federal Rule of Civil Procedure 26(b)(2), an expert's written report must include a complete statement of the expert's opinion and the “facts or data” considered by the witness in forming them. Fed. R. Civ. P. 26(b)(2)(B).

Fed. R. Civ. P. 26(b)(1). Relevant information “need not be admissible in evidence to be discoverable.” Id.

However, Rule 26(b)(3) protects “documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent)” and the Court “must protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of a party's attorney or other representative concerning the litigation.” Fed. R. Civ. P. 26(b)(3)(A)-(B). In the context of experts who may testify at trial, “Rules 26(b)(3)(A) and (B) protect drafts of any report or disclosure required under Rule 26(a)(2), regardless of the form in which the draft is recorded.” Fed. R. Civ. P. 26(b)(4)(B). “The party asserting an applicable protection bears the initial burden of showing that the protection applies.” U.S. Inspection Servs., Inc. v. NL Engineered Sols., LLC, 268 F.R.D. 614, 617 (N.D. Cal. 2010) (citing United States v. 22.80 Acres of Land, 107 F.R.D. 20, 21 (N.D. Cal. 1985)).

b. Analysis

*5 Hoist argues the AdobeFlash native files are “facts or data” considered by Mr. Smith in forming his opinions and should have been disclosed during fact discovery or at least in response to the Smith Subpoena. JS at 29-33; Dkt. 197 at 2-5. TFI argues the AdobeFlash files are draft reports protected from disclosure as work product pursuant to Rule 26(b)(4)(B). JS at 37-44.

First, the AdobeFlash native files do not appear to be “facts or data” that Mr. Smith relied on in forming his opinions. See Fed. R. Civ. P. 26(b)(2)(B). Rather, Mr. Smith relied on the patent drawings and the animations. Therefore, under Rule 26(b)(2), Mr. Smith was not required to produce AdobeFlash native files with the Smith Rebuttal Report.

Nevertheless, the AdobeFlash native files contain information relevant to TFI's defense. The AdobeFlash native files include computer commands that “set a start position and an end position, and which points are fixed until it can move from the start position to the end position over a certain amount of time” as well as “which points don't move relative to each other.” See Ex. 17, Smith Deposition at 118:20-119:19. Therefore, the native files are relevant to a party's “claim or defense” and proportional to the needs of the case, in that TFI has not argued it would be burdensome to produce the native files. See Fed. R. Civ. P. 26(b)(1). Accordingly, unless they are privileged, the AdobeFlash native files are discoverable pursuant to Rule 26(b)(1). In re Application of Republic of Ecuador, 280 F.R.D. 506, 512 (N.D. Cal. 2012), aff'd sub nom. Republic of Ecuador v. Mackay, 742 F.3d 860 (9th Cir. 2014) (“[E]xpert materials and communications that fall outside the scope of Rule 26(b)(4)(B)–(C) are not work product and are, therefore, discoverable.”).

TFI argues the AdobeFlash native files are “drafts” protected as work product pursuant to Rule 26(b)(4)(B). However, the AdobeFlash native files are not “drafts” of the animations that are included in the Smith Rebuttal Report. A draft is “[a] preliminary sketch or rough form of a writing or document, from which the final or fair copy is made.” Deangelis v. Corzine, No. 1:11-CV-07866-VM-JCF, 2016 WL 93862, at *4 (S.D.N.Y. Jan. 7, 2016) (quoting “Draft,” Oxford English Dictionary (2d ed. 1989); “Draft,” Webster's Third New International Dictionary Unabridged (2016) (“[A] preliminary or tentative sketch, outline, or version (as of a document or picture).”)). TFI's reliance on an analogy to spreadsheets is misplaced and TFI fails to provide any case law for the position that native files of spreadsheets containing formulas are protected work product.[1] See JS at 39. Moreover, TFI has not identified any “mental impressions, conclusions, opinions, or legal theories of a party's attorney”, see Fed. R. Civ. P. 26(b)(3)(B), that might be revealed through production of the native files. Therefore, TFI's objections to production of the AdobeFlash native files are meritless, and the AdobeFlash native files are discoverable.

*6 While the AdobeFlash native files should have been produced in response to the Smith Subpoena, the Court declines to grant the evidentiary sanction of striking portions of the Smith Rebuttal Report. In evaluating the factors articulated by the Ninth Circuit, the prejudice to TFI of granting Hoist's proposed remedy would be substantial and Hoist has not shown lesser sanctions would have been inappropriate. Anheuser-Busch, Inc., 69 F.3d at 348. In addition, Hoist did not file a motion to compel compliance with the Smith Subpoena. Therefore, while TFI's objections were meritless, there is no evidence TFI violated a court order by timely objecting to the Smith Subpoena. The Court finds it appropriate to fashion an equitable remedy and require production of the AdobeFlash native files in response to Request No. 5 of the Smith Subpoena.

Hence, Hoist's Motion to Strike paragraphs 88-95 and exhibits M-Q should be GRANTED IN PART and DENIED IN PART. TFI should be compelled to produce the AdobeFlash native files immediately and Hoist should have a brief opportunity for additional deposition of Mr. Smith regarding the native files.

3. Dr. Sternlicht's Additional Testing is Proper Rebuttal Testimony

Hoist seeks to have the Court strike paragraphs 22-26, 31-33, and 43 and exhibits E-V from the Sternlicht Rebuttal Report. JS at 33-34. These paragraphs and exhibits document additional testing Dr. Sternlicht conducted on the Bio-Arc machines. Specifically, Dr. Sternlicht conducted testing by videotaping four TFI employees attempting to do a “pec fly” exercise on the chest press Bio-Arc machine in TFI's possession. See Ex. 12, Sternlicht Rebuttal Report. Exhibits E-V are the videotapes and ¶¶ 22-26, 31-33, and 43 are Dr. Sternlicht's analysis of the testing. Hoist contends this testing should have been conducted and disclosed before the close of fact discovery. TFI argues the additional testing was conducted in response to Mr. Lenz's opinion that the BA-701 chest press machine permits a user to perform “pectoral fly exercise movements”. JS at 44-47.

Courts have permitted the use of additional data in rebuttal expert reports where it relates to the same subject matter. See, e.g., Van Alfen v. Toyota Motor Sales, U.S.A., Inc., No. 8:10-ML-02151-JVS-FMOx, 2012 WL 12930456, at *5 (C.D. Cal. Nov. 9, 2012) (finding additional data presented in a rebuttal report “pointedly ... addresses the conclusions reached” in the initial report and concluding the rebuttal report including an additional survey were within the permissible bounds of rebuttal expert testimony). Here, Dr. Sternlicht's additional testing relates to the same subject matter – whether it is possible to do a “pectoral fly” exercise on the Bio-Arc chest press machine. Moreover, merely because Dr. Sternlicht could have conducted the testing during fact discovery did not obligate him to do so without knowing what opinions and evidence Mr. Lenz would ultimately rely on in the Lenz Initial Report. Van Alfen, 2012 WL 12930456, at *3 (“[R]egardless of whether it could have been included in the expert's initial report, rebuttal expert opinion is proper where it ‘explain[s], repel[s], counteract[s] or disprove[s] evidence of the adverse party.’ ” (quoting Marmo v. Tyson Fresh Meats, Inc., 457 F.3d 748, 759 (8th Cir. 2006)). Therefore, the testing and opinions based upon the additional testing are proper rebuttal testimony in response to Mr. Lenz. Hence, Hoist's Motion to Strike paragraphs 22-26, 31-33, and 43 and Exhibits E-V is DENIED.

IV. RECOMMENDATION

IT IS THEREFORE RECOMMENDED that the District Court issue an order: (1) accepting the findings and recommendations in this Report; (2) GRANTING IN PART Hoist's Motion and (a) requiring TFI to produce Mr. Smith's computer models in native file format, and (b) permitting Hoist to depose Mr. Smith for up to an hour regarding the computer models; and (3) DENYING IN PART Hoist's Motion to the extent it seeks to strike portions of the expert rebuttal reports of Mr. Smith and Dr. Sternlicht.

The cases TFI cites are inapplicable to the instant matter. In Helmert the court found that native files are not required to be produced as part of the expert's report pursuant to Rule 26(a)(2), but the Helmertcourt does not mention whether the native files are protected pursuant to Rule 26(b)(4)(B). See Helmert v. Butterball, LLC, No. 4:08CV00342 JLH, 2011 WL 3157180, at *2 (E.D. Ark. July 27, 2011). In Republic of Ecuador, the court found that draft worksheets are protected and need not be produced, but does not mention anything regarding production of native files that are not drafts. See In re Application of Republic of Ecuador, 280 F.R.D. at 512.