Cockburn Testimony -- Opposition and Reply Briefs
Ian Cockburn is Elysium's expert witness on economic damages (e.g., from alleged breach of the exclusivity provision) and Patent Misuse. ChromaDex filed a motion to exclude Dr. Cockburn's testimony, which we covered here. Elysium has since opposed that motion, and ChromaDex has replied to that opposition. You can read the Opposition and Reply Briefs here:
I characterized ChromaDex's original critique of Dr. Cockburn's testimony as "blistering" and "withering," and said I was confident that it would get excluded. I said,
We have said from the start that the Patent Misuse Claim is bogus and fictional, so an expert report that attempts to validate fiction is obviously going to run into all sorts of trouble. Cooley does a remarkable job documenting those troubles.
Unsurprisingly, Elysium disagrees with me. Elysium says,
"Dr. Cockburn conducted a thorough and skillful economic analysis of patent misuse and damages issues...ChromaDex’s criticisms of Dr. Cockburn’s opinions misapply the applicable law and ignore relevant evidence. At best, they amount to the sort of garden variety quibbles with an expert’s reasoning that can be explored in cross examination or challenged by ChromaDex’s own expert in his direct testimony; they are not grounds for exclusion."
We'll see about that.
Then Elysium makes a more interesting argument:
Moreover, with respect to Dr. Cockburn’s opinions on patent misuse, ChromaDex ignores the parties’ mutual agreement that patent misuse should be tried to the Court, not the jury. There is no reason to exclude expert opinions in advance of trial where the factfinder and gatekeeper are one and the same.
Is it logically possible for a judge to exclude himself or herself from hearing evidence, when the judge must hear the evidence in order to determine whether he or she is allowed to hear it? In the crazy world of legal logic, I would say "Yes," because whether that evidence is in the record determines whether the judge can subsequently rely on it for a decision, and that record is what an appellate court would review on appeal. Plus, there's the time and trouble of presenting something at trial only to exclude it. So I think I disagree with Elysium, but we'll see. Let's continue.
First Elysium defends Dr. Cockburn's determination that the relevant market for NR is NR itself. This is a foundational premise for patent misuse -- that ChromaDex has market power and abused it. But if NR is just one of many NAD replenishers -- and some are cheap and plentiful, like Niacin and Nicotinamide -- then ChromaDex lacks market power and therefore can't misuse the patent.
I ridiculed Dr. Cockburn's conclusion that the relevant market for NR was NR in this blog post,
because Dr. Cockburn relied heavily and repeatedly for his conclusion on ChromaDex's own marketing statements. I said that that was like relying on Porsche's advertisements to determine as an economic fact that there is no substitute for a Porsche, when in fact, despite what Porsche might want you to believe, there are lots of good substitutes for a Porsche. I can't imagine an economist who would claim that there are no substitutes for a Porsche because Porsche says so. So Dr. Cockburn's citing statements by ChromaDex executives in support of NR's uniqueness is an entirely improper methodology for market definition, and ridiculous as well.
Elysium doesn't think so. In fact, Elysium thinks just the opposite:
ChromaDex makes the extraordinary argument that its own admissions defining the market in which it operates are not a proper basis for a market analysis. It defies logic and common sense to contend that the views of a seller about the contours of its own market lack economic and evidentiary significance.
Elysium similarly negates ChromaDex's other complaints about Dr. Cockburn's testimony by simply disagreeing with ChromaDex, or by saying that the same errors infect ChromaDex's own expert's analysis.
ChromaDex next complains that Dr. Cockburn did not conduct market
research or consumer surveys. But, then again, neither did ChromaDex’s expert
when he offered his opinion on substitutability...
Tellingly, ChromaDex fails to acknowledge that its own expert economist likewise used the drug industry as a comparator...
ChromaDex criticizes Dr. Cockburn for not performing a cross-price
elasticity study...Indeed, ChromaDex’s own expert ...did not himself undertake to conduct such a study...
Elysium could make the same complaint about Dr. Heeb’s testimony.
I don't know if the same errors that infect Dr. Cockburn's testimony also infect Dr. Heeb's testimony, but that would seem to be a ground to exclude both, not an excuse for or a resuscitation of Dr. Cockburn. It's almost as if Elysium is saying, "He hit me first." I do not understand this form of argument.
But there's a lot more of it -- 20+ pages. Give it a read if you are interested.
ChromaDex's Reply Brief
ChromaDex's Reply Brief hits hard; it is a hurricane making landfall:
Elysium’s Opposition to ChromaDex’s Daubert motion seeks to obscure the serious problems with Dr. Cockburn’s opinions. Elysium first tries to persuade the Court that the serious methodological shortcomings in Dr. Cockburn’s opinions are mere “garden variety quibbles” that can be addressed at trial. It then tries to shift the focus away from Dr. Cockburn to ChromaDex’s expert, Dr. Heeb, whose opinions are not even at issue in this motion. Elysium’s arguments are unpersuasive. On this motion, Elysium bears the burden of establishing that Dr. Cockburn’s opinions are reliable and helpful, as opposed to the ipse dixit or impermissible legal conclusions. Elysium does not come close to carrying that burden. The Court should grant ChromaDex’s motion.
Elysium claims that Dr. Cockburn “performed a thorough economic analysis, applying the Supreme Court-endorsed Brown Shoe factors” to arrive at this extremely narrow definition. Elysium is wrong. Dr. Cockburn may have mentioned the Brown Shoe case in his report. But he did not conduct a “thorough” Brown Shoe analysis in any respect. Rather, he picked the market he wanted, then tried to justify it with a smattering of observations, which Elysium now strains to tie back to Brown Shoe. Dr. Cockburn’s analysis evidences none of the rigor employed by experts seeking to identify the contours of relevant product market. His opinion is, therefore, unreliable.
It bears repeating, because Elysium pointedly ignores it, that the Ninth Circuit has never held that an economist can define a relevant product market exclusively by reference to the Brown Shoe factors...Elysium concedes that Dr. Cockburn did not perform a cross-elasticity study....And while it halfheartedly suggests that Dr. Cockburn performed a “hypothetical monopoly test,” no evidence shows that he in fact did so...
Even assuming that a “Brown Shoe analysis” could suffice in some circumstances, Dr. Cockburn’s superficial assessment of a few Brown Shoe factors provides no basis to conclude that an NR-only market reflects competitive reality. Skepticism of Dr. Cockburn’s chosen market is warranted because a relevant market “generally cannot be limited to a single manufacturer’s products.”
[EXTENSIVE REVIEW OF BROWN SHOE FACTORS]
...In sum, Dr. Cockburn’s so-called Brown Shoe analysis in “sufficiently robust to warrant admission under Rule 702 and Daubert.” Live Concert, 863 F. Supp. 2d at 994. It is not surprising, therefore, that Elysium spends as much time in its Opposition critiquing ChromaDex’s rebuttal expert, Dr. Heeb, as it does defending Dr. Cockburn. (Opp. at 7–8, 11.) These critiques are irrelevant to whether or not Dr. Cockburn’s opinions are admissible, and it is at least worth mention, they are also not accurate. For example, Dr. Heeb did not “assert” that “the relevant market should include all anti-aging supplements.” (Opp. at 7 (emphasis in Elysium’s motion).) What Dr. Heeb said is that “anti-aging supplements comprise a more plausible antitrust market,” which is a distinctly different point. Dr. Heeb himself has not offered a formal opinion about the definition of the relevant market because that is not ChromaDex’s burden. In any event, all of this is a sideshow because the merits of Dr. Heeb’s opinions are not at issue in this motion.
Well, the reason God created Reply Briefs is so that you can tear up all the half-truths and petty deceptions that might, under some circumstances, get presented in an Opposition Brief.
The Reply goes on for many more pages, powerfully rebutting each of Elysium's points -- I would encourage you to read it, because it is a compelling piece of legal writing. Nobody is going to accuse Cooley of not responding to Baker Hostetler's hijinks with the sustained force of a hurricane. But the Reply Brief only reinforces my original sense that the Cockburn Report is in big trouble.
And if its Damages expert gets clipped, Elysium's not going to have much to say at trial, which might make for a short trial. Between the Summary Judgment Motions and the Evidentiary Motions, Elysium is at risk for having a very bad week.