Quintara Biosciences, Inc. v. Ruifeng Biztech Inc.

Background

The dispute concerns an alleged takeover of Quintara Biosciences, Inc.’s laboratory equipment and data after a business partnership broke down. Defendants asked the court to exclude testimony from Quintara’s chief financial officer, Tomo Kimura, whom Quintara disclosed as a non-retained damages expert.

Federal Rule of Civil Procedure 26 distinguishes between retained experts, who generally must provide detailed written reports, and non-retained experts. A non-retained expert disclosure ordinarily must identify the subject matter of the expected testimony and summarize the facts and opinions. The opinion states that Kimura’s job duties did not regularly involve giving expert testimony.

Expert testimony ruling

The court held that Rule 26 did not itself require Kimura to provide a written report merely because he was being offered as a non-retained expert. The court also stated that a chief financial officer could, based on work experience, offer helpful opinions about damages.

The court found, however, that Kimura was not qualified to testify about a reasonable royalty. Quintara had disclosed him to address lost profits, unjust enrichment, a reasonable royalty, and injunctive relief. But Kimura had never calculated a reasonable royalty, and his deposition indicated that his understanding came from an article found through Google and, possibly, a cited case. Applying Federal Rule of Evidence 702, the court ruled that he could not testify about reasonable royalties at trial.

Kimura could testify, within reasonable limits and consistent with his actual job duties, about lost profits for sales made by defendants to customers identified in the trade-secret databases, if those sales were proven at trial. The court also found that requiring a written report would promote efficient use of trial time. The report could address lost profits and, to the extent supported by Kimura’s expertise, unjust enrichment and injunctive relief, but it could not address reasonable royalties. The court stated that these limitations did not prevent specific objections to particular testimony at trial.

Documents and deadlines

The court ordered defendants to provide all documents relevant to calculating lost profits by September 9, 2021. It overruled the privacy objection to those documents and ruled that the documents did not have trade-secret value merely because they showed goods sold to particular customers at particular prices when those customers had previously been Quintara customers. Quintara and its counsel could use the documents only to prepare Kimura’s report and not for competitive purposes. The court also overruled the attorney’s-eyes-only designation for the invoices.

Kimura’s report was due September 30, 2021. Defendants’ deposition of Kimura was due by October 14, 2021. Any opposing or rebuttal expert report was due November 1, 2021, and any deposition of that expert was due November 15, 2021.

Effect on the schedule

To allow the parties to meet these obligations, Judge William Alsup postponed the trial from September 27, 2021, to December 6, 2021, and rescheduled the final pretrial conference for December 1, 2021. The opinion does not expressly identify an overall grant or denial of defendants’ motion; it states the specific limits and requirements governing Kimura’s testimony.