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Two recent rulings from federal circuit courts reviewing expert testimony in trade secrets cases reached very different results, with one circuit upholding admission of the testimony and the other finding that the testimony was sufficiently harmful to require a n

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

ew trial.

Taken together, the two cases shed light on the allowable boundaries for expert testimony in trade secrets litigation.

The most recent ruling, Synergetics v. Hurst, decided February 5th by the 8th U.S. Circuit Court of Appeals, upheld an expert’s test

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

imony on economic damages, despite the appellant’s contention that it was based on incorrect assumptions about the relevant market.

The earlier case, Mike’s Train House v. Lionel, decided December 14th by the 6th U.S. Circuit Court, found that the trial court “a

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

andoned its gate-keeping function” when it admitted expert testimony concerning the similarity of design drawings.

In Synergetics, a company that sells ophthalmic equipment used in eye surgery sued two former employees for trade secret misappropriation. A jury f

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

ound in favor of the company and awarded compensatory and punitive damages. On appeal, the two employees contended that the trial court should have excluded the testimony of Synergetics’ expert witness.

The appellants argued that the expert’s methodology was unr

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

eliable because he based his opinion on just two suppliers of the device, Synergetics and the company started by the former employees, even though other suppliers posed significant competition in the market.

Affirming the trial court, the 8th Circuit rejected th

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

s argument for the reason that it spoke to the credibility of the testimony, not its admissibility. The expert had explained the methodology he used to calculate the damages, the court noted, and appellants had the opportunity to challenge his methodology through

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

cross-examination and their own experts.

“While other methods for calculating damages may be available, so long as the methods employed are scientifically valid, Appellants’ mere disagreement with the assumptions and methodology used does not warrant exclusion

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

of expert testimony,” the circuit court said.

An expert’s methodology was also at issue in Mike’s Train House, but here the 6th Circuit found that admission of the expert’s testimony was an error that may improperly have swayed the outcome of the trial. Given th

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

t the jury had awarded the plaintiff, Mike’s Train House (MTH) damages exceeding $40 million, the 6th Circuit’s remand for a new trial was a significant victory for Lionel.

The case alleged misappropriation of trade secrets in the design and manufacture of model

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

trains. The expert, a professor of mechanical engineering, testified that model-train designs used by Lionel were copied from MTH.

To reach this conclusion, he compared designs from each company, evaluating them based on 21 criteria he had selected. Using these

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

criteria, he calculated a score from zero to one to show the degree of association between designs.

The expert also reviewed the report of an expert who testified in a South Korean case involving the same designs and who also found significant copying. The MTH

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

xpert testified at trial that he had independently corroborated the South Korean expert’s conclusions using a regression analysis.

On appeal, the 6th Circuit chastised the trial court for admitting this testimony. In finding that the trial court abandoned its ga

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

te-keeping function, the 6th Circuit noted that it failed to make any findings regarding the reliability of the expert’s testimony or of the technique he used to reach his conclusion.

Noting that the expert created his criteria specifically for this case, the 6t

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

h Circuit said, “There is no evidence that his methodology had ever been tested, subjected to peer review, possessed a known or potential rate of error, or enjoyed general acceptance.”

The trial court further erred when it permitted the expert to testify to the

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

onclusions of the South Korean expert, the circuit court decided. This testimony – based as it was on the report and conclusions of another expert that were not in evidence – was hearsay and should not have been admitted, the court said.

“Other circuits have squ

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

arely rejected any argument that Rule 703 extends so far as to allow an expert to testify about the conclusions of other experts,” the court said.

Noting that not all improper expert testimony requires a new trial, the 6th Circuit went on to consider the testimo

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

ny’s impact on the trial’s outcome. It concluded that the testimony had a substantial effect on the verdict. He was the only expert to testify about the degree of copying between the drawing pairs, the court noted, and without his testimony, the jury would not ha

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

e learned of the South Korean expert’s conclusions.

“Because MTH relied on [this] testimony as its source of expertise and analysis regarding the degree of copying, it is impossible to conclude with any certainty that [it] did not sway the jury’s verdict.”

The

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

two cases are:

Synergetics v. Hurst, No. 06-1146 (8th Circuit, Feb. 5, 2007)
Mike’s Train House v. Lionel, No. 05-1095 (6th Circuit, Dec. 14, 2006)

Written by Robert Ambrogi for BullsEye, an IMS Expert Services Publication

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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