Monday, July 14, 2014

Expert Testimony and Patent Damages: Could "Hot-Tubbing" Be the Answer?

As most readers of this blog are probably aware by now, in April the U.S. Court of Appeals for the Federal Circuit reversed several of Judge Richard Posner's evidentiary rulings in Apple v. Motorola.  As I noted in the post I published shortly after the appellate court's decision came out, I wasn't all that surprised that the Federal Circuit took issue with some of Judge Posner's analysis, such as his exclusion of the testimony of one of Apple's damages experts on the ground that the expert had obtained information about the identity of a noninfringing alternative from another person associated with Apple.  To be sure, in an ideal world, a person trying to determine the objective value of an asset might be expected to seek information from a disinterested source; and Professor David McGowan, for one, has published a vigorous defense of Judge Posner's analysis on the Patently-O Blog.  Nevertheless, Judge Posner's attempt to turn this ideal into a rule of law struck may people as going beyond what the Federal Rules of Evidence at present contemplate; and, as stated, I wasn't surprised by this particular result of the appeal.  (For further analysis of the Federal Circuit opinion, see also Professor Michael Carrier's short article in the May 30, 2014 issue of Bloomberg BNA's Patent, Trademark & Copyright Law Daily, titled Apple v. Motorola:  Five Lessons for Judges in Admitting Expert Testimony, available here behind a paywall.)

The problem of having nonspecialist judges and, even more so, juries resolve technologically or economically complex factual issues has, of course, been with us for a very long time.  Judge Learned Hand, for example, lamented this phenomenon in his 1911 opinion in Parke-Davis & Co. v. H.K. Mulford & Co.,  Nowadays, although the parties make extensive use of their own expert witnesses, U.S. courts also may appoint their own experts under Federal Rule of Evidence 706.  Nevertheless, the procedure is infrequently used, though Judge Posner, for one, has on occasion made use of it.  J. Gregory Sidak, who has served as a court-appointed expert for Judge Posner, has written on the topic here; and the use of court-appointed experts is observed more frequently in some other countries, as I discuss in my book pp.228 n.37, 233 n.61, 297, 312.

Anyway, in this vein, a reader asked me a few weeks ago if I knew anything about an Australian procedure known as "hot-tubbing," and sent along a link to an article by Antonia Crooke and Louise Mallon titled Hot -tub:  Lessons from Australia.  The article describes the technique as developed in Australia, and its recent introduction into U.K. procedure:
Hot-tubbing is intended to focus on the areas of disagreement between the experts, as identified in the experts' joint statement. Where it is ordered, the procedure envisaged is as follows. Experts prepare and exchange their written reports in the normal way and meet with their opposite number to discuss their reports and prepare the joint statement, which identifies where they agree and disagree. The areas of disagreement identified in the joint statement are then used to form the basis of the agenda for the "hot-tub", which is prepared and agreed by the parties. This is provided to the judge in advance of the trial. The experts are then sworn in together at the trial and the judge initiates the discussion by asking each expert for their views. There will also be an opportunity for the experts to present and answer questions of each other. Counsel may then ask questions of each of the experts. At the end, the judge will summarise the experts' different positions on the issues and ask them to confirm or correct that summary. . . .
When concurrent evidence was first introduced as the norm in New South Wales there was some scepticism within the legal profession as to how successful it would be. However, while there are pros and cons to having experts give their evidence concurrently, the general view now is that it is a superior technique for getting to the heart of the issues in dispute and ensuring that each expert has an equal opportunity to give their evidence on those issues.
With the assistance of the University of Minnesota's Legal Research Center I have begun gathering together additional materials on the subject.  Pending completion of my review of these materials, I'll just list them here, and would appreciate hearing from readers who are aware of other materials--or who have experience with, or opinions on, the use of the procedure, particularly as it relates to patent matters (especially patent damages, to the extent it has been or could be used in that context).  I gather from some of the materials below that the procedure also has been used in Canada--and at least on a few occasions, in the U.S., which surprised me.  

Ken Anderson & Tracy Ayoderle, Note, Hot-Tubbing in Canadian Patent Litigation:  A Preliminary Assessment, 24 Intellectual Property Journal 203 (2012).

Derek Baigent, Hot tubbing expert witnesses--lessons from Australia pre-JacksonLexisNexis, Mar. 27, 2013. 

Paul Barry, Time to take the plunge?,, Jan. 2011.

Sean Brannigan, 'Hot tubbing'--practical considerations, 5 Construction Law International 18 (2010). 

Martin Burns, In it together,, Apr. 4, 2014.

Gary Edmond, Merton and the Hot Tub:  Scientific Conventions and Expert Evidence in Australian Civil Procedure, 72 Law & Contemporary Problems 159 (2009).

John Emmerig et al., Room in American Courts for an Australian Hot Tub?, JonesDay, Apr. 2013.

Graham Hain, Jackson & "hot tubbing",, Feb. 26, 2010.

Dame Hazel Genn, Getting to the truth:  experts and judges in the "hot tub", 32 Civil Justice Quarterly 275 (2013).

James Green, Apotex Inc v. AstraZeneca inc.:  IP Experts Take the Plunge into the Hot Tub, 2012 European Intellectual Property Law Journal 874 (2012).

Steven Rares, Using the "Hot Tub"--How Concurrent Expert Evidence Aiuds Understanding Issues, available at

Elizabeth Reifert, Comment, Getting into the Hot Tub:  How the United States Could Benefit from Australia's Concept of "Hot Tubbing" Expert Witnesses, 89 U. Detroit Mercy L. Rev. 103 (2011).

Mark Solon, Experts in Hot Water:  Is expert witness hot-tubbing the future?, New Law Journal 874, June 29, 2012. 

Mark Solon, In hot water?,, Jan. 25, 2013.

Mark Summerfield, Federal Court Conducts Markman-Style Hearing in Hot Tub:  Britax Childcare Pty Ltd v Infa-Secure Pty Ltd [2012] FCA 467 (9 May 2012), Patentology Blog, May 12, 2012.

Lisa C. Wood,  Experts Only:  Out of the Hot Tub and into the Joint Conference, Antitrust, Fall 2007, at 89.

Lisa C. Wood, Experts in the Tub, Antitrust, Summer 2007, at 95.  

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