Just because an expert says something is so doesn’t mean that it is. That’s the lesson of Judge Gale’s ruling last week in Carter v. Clements Walker, 2014 NCBC 1. He rejected the evidentiary value of an expert’s report stating that Plaintiff’s damages were $33 million, saying that it was insufficient to create a genuine issue of material fact on whether Plaintiff had suffered any damages at all.
Some background will help. The case is for legal malpractice. Plaintiff, an inventor, alleged that the Defendant law firm committed malpractice by allowing a domestic patent application to be published before it filed an application for international patent rights. Since some foreign countries require "absolute patent novelty" before granting a patent, Plaintiff couldn’t obtain a patent in those countries given the filing of the U.S. application.
So now that the COA had breathed new life into the case, how was Plaintiff damaged by the alleged malpractice? By the loss of the opportunity to sell or license his invention in those foreign countries in which he couldn’t secure a patent. What was the value of those potential revenues? If Plaintiff had had revenues in the U.S. from his invention, those might have served as a benchmark, but the invention had never been manufactured or licensed in this country.
Plaintiff relied on the report of an expert witness, which concluded that he had "lost total gross profits of approximately $33 million between the years of 2010 and 2020" as a result of not obtaining foreign patent rights.
Think that was enough to get to a jury as evidence of damages? it wasn’t. Judge Gale ruled that:
In light of the overwhelming evidence that [the Plaintiff] had [not], at the time of [the expert’s] opinion, ever realized or reasonably projected any commercial value from the invention (even though it had domestic patent protection), [the expert’s] speculative, bare-bones conclusion is insufficient to create a genuine issue of material fact on whether [Plaintiff] suffered damages.
Op. ¶22 (emphasis added).
This isn’t the first time in the Business Court that an expert’s inadequate report has resulted in the dismissal of a case. Judge Tennille dismissed a malpractice claim in Inland American Winston Hotels, Inc. v. Winston, 2010 NCBC 19 because the expert wasn’t qualified to testify.
And in Blythe v. Bell, 2013 NCBC 8, Judge Gale said in refusing to consider an expert’s report, saying that:
[w]hile the courts do not demand mathematical certitude in calculating lost profits, they do not countenance conjecture or speculation, and conjecture or speculation does not become admissible simply because it is presented by an expert.
Op. ¶19 (emphasis added).
The Plaintiff didn’t rely solely on the expert’s report. He also offered documents from the internet which he said showed that other products similar to the invention were being offered in foreign markets. That didn’t provide admissible evidence in opposition to the motion for summary judgment. Relying on an opinion from the COA, Judge Gale held that:
Unauthenticated “internet printouts . . . do not constitute admissible evidence for purpose of the analysis required in connection with . . . [a] summary judgment motion[.]”
Op. ¶25 (quoting Rankin v. Food Lion, 706 S.E.2d 310, 316 (N.C. App. 2011).