CLO Virtual Fashion Inc. v. Zhejiang Lingdi Digital Technology Co., Ltd.
2:23-cv-00274
E.D. Tex.Jul 7, 2025Background
- CLO Virtual Fashion Inc. (CLO) sued Zhejiang Lingdi Digital Technology Co., Ltd. (Linctex) for infringement of three US patents regarding software.
- CLO moved to exclude opinions from Linctex’s expert, Ron Schnell, whose report focused on the availability and use of 'cracked' versions of CLO’s software.
- CLO initially argued Schnell’s opinions were only relevant to issues of non-infringing alternatives (NIAs) and lost profits, both of which were no longer at issue after plaintiff withdrew its lost profits claim.
- Linctex later argued Schnell’s opinions remained relevant to the issues of copying (as a secondary consideration of non-obviousness) and willfulness.
- The court permitted supplemental briefing from both sides due to developments in the case.
- The court reviewed Schnell’s qualifications, the content of his report, and expert admissibility under Rule 702.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Relevance: Lost Profits/NIAs | Schnell’s opinions not relevant anymore | Initially defended relevance re: lost profits/NIAs | Not relevant since lost profits no longer pursued |
| Timeliness of Arguments | Defendant’s new relevance arguments are late | Should be able to supplement due to case changes | Court allows Defendant’s new arguments due to changes |
| Relevance: Copying | Schnell’s opinions not relevant to copying | Opinions material to copying, non-obviousness | Schnell’s report not relevant to copying |
| Relevance: Willfulness | Cracked versions don’t show willfulness | Schnell’s analysis relevant to willfulness | Schnell’s report admissible on facts relevant to willfulness, if Plaintiff opens the door |
Key Cases Cited
- Kumho Tire Co. v. Carmichael, 526 U.S. 137 (Sup. Ct. 1999) (district courts have broad discretion in determining expert testimony admissibility)
- Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (Sup. Ct. 1993) (sets standard for admitting expert scientific testimony)
- AstraZeneca AB v. Apotex Corp., 782 F.3d 1324 (Fed. Cir. 2015) (an accused instrumentality cannot be a non-infringing alternative)
- Pall Corp. v. Micron Separations, Inc., 66 F.3d 1211 (Fed. Cir. 1995) (same principle regarding non-infringing alternatives)
- Datascope Corp. v. SMEC, Inc., 879 F.2d 820 (Fed. Cir. 1989) (use of accused product as NIA is improper)
- Micro Chem., Inc. v. Lextron, Inc., 317 F.3d 1387 (Fed. Cir. 2003) (court should not resolve factual disputes underlying expert opinions at admissibility stage)
- Pipitone v. Biomatrix, Inc., 288 F.3d 239 (5th Cir. 2002) (role of Daubert is not to replace adversary process with judge as factfinder)