Antitrust Law Daily Wrap Up, ANTITRUST—W.D. Wis.: Cattle sexing technology company unable to exclude 'confidential information' references at trial, (Jul 26, 2016)

By Linda O’Brien, J.D., LL.M.

A cattle sexing technology company could not exclude a bull semen provider’s expert testimony on what constituted confidential information under the parties’ agreement in the provider’s action against the technology company for allegedly monopolizing the sexed bovine semen processing market, the federal district court in Madison, Wisconsin, has ruled (ABS Global, Inc. v. Inguran, LLC, July 25, 2016, Conley, W.).

ABS Global, Inc. provides bull semen to dairy and beef producers for artificial insemination. Inguran, LLC, doing business as Sexing Technologies (ST), provides sorting technology services to ABS and other companies to separate male and female bull sperm. ABS claimed that ST has monopolized and exercised market power in the alleged "Sexed Bovine Semen Processing Market," in violation of Section 2 of the Sherman Act. In addition, ABS asserted that ST’s conduct in maintaining its monopoly in the sexed semen market is anticompetitive, and that ST engaged in unfair competition through its patent acquisitions and licenses.

On July 21, 2016, the court denied the parties’ cross-motions for summary judgment. Before the court was the defendant’s Daubert motion and motions in limine, seeking to exclude certain evidence at trial.

Expert testimony. ST argued that ABS’s expert John Parks—a technical expert on the protocols and media for bull sperm sorting—was not qualified to opine on contract-related issues, such as whether information constituted "confidential information" as defined by the agreement between ABS and ST as well as whether certain conduct was a breach of that agreement. In denying the motion, the court determined that Parks could testify about what information was in the public sphere and therefore not covered by the agreement’s definition of confidential information since his opinion was tied to his expertise in the field of sperm sorting.

Park’s opinions about the agreement were not legal opinions. Instead, he reviewed categories of information that allegedly constituted confidential information and concluded that the information was either known in the field generally or revealed by ST employees in published scientific papers, according to the court. However, Parks would not be allowed to testify about whether the timing of certain behavior violated the agreement or whether ABS’s conduct ultimately breached that agreement.

Motions in limine. The defendants also sought to exclude any evidence or characterizations that ST was "litigious" as irrelevant and prejudicial as well as prohibit any references to per se violations of antitrust laws regarding the defendants’ patent acquisitions. ABS’s antitrust claim asserted that ST had maintained its market position by threatening litigation against potential competitors. The court found that evidence of a defendant’s motivation in filing lawsuits was relevant to proving a plaintiff’s belief that the defendant was entitled to own the market. In this case, ABS sufficiently argued the probative nature of evidence of ST’s litigiousness with respect to asserting the exclusivity of sexing technology under its U.S. patent portfolio.

However, ABS was prohibited from referring to per se violations of antitrust laws or statutes since such statements constituted instructions on the law that the court must provide and could confuse the jury as to ABS’s burden of proof. While ABS could argue that ST’s patent acquisitions constituted anticompetitive conduct, it could not argue that ST’s acquisitions were themselves unlawful, regardless of ST’s intended use or purpose, the court concluded.

The case is No. 3:14-cv-00503-wmc.

Attorneys: David Timothy Pritikin (Sidley Austin LLP) and Michael J. Modl (Axley Brynelson, LLP) for ABS Global, Inc. Sarah Anne Zylstra (Boardman & Clark LLP) and Catherine Fairley Spillman (Akin Gump Strauss Hauer & Feld LLP) for Inguran, LLC.

Companies: ABS Global, Inc.; Inguran, LLC

Cases: Antitrust WisconsinNews