JAMES O. BROWNING, District Judge.
General Protecht Group, Inc.
In 2004 and 2005, Leviton Manufacturing asserted claims of patent infringement of U.S. Patent Nos. 6,246,558 ("the '558
In October 2007, Leviton Manufacturing, General Protecht, Harbor Freight, Nicor, Inc., and Central Purchasing entered into a confidential settlement agreement ("CSA") to resolve the patent infringement actions pending in the Court. See Memorandum at 9; Response at 3. The CSA included a covenant not to sue. The covenant stated:
CSA §§ 2.1, 2.2, at 4-5. The CSA also contained a section regarding the District of New Mexico's '766 Markman order.
CSA § 4.1.
The CSA also contained a section entitled "Governing Law/Venue." CSA § 11.2, at 11. This section states: "Any dispute between the Parties relating to or arising out of this [CSA] shall be prosecuted exclusively in the United States District Court for the District of New Mexico. The Parties consent to the venue and jurisdiction of such court for this purpose." CSA § 11.2, at 11.
After executing the CSA, Leviton Manufacturing secured two new patents — U.S. Patent Nos. 7,463,124 ("the '124 patent") and 7,764,151 ("the '151 patent"). On December 9, 2008, the '124 patent issued from application no. 10/977,929 ("the '929 application"), which Leviton filed on October 28, 2004. See Response at 6; Memorandum at 10. The '151 patent issued on July 27, 2010 from application no. 12/176,735 ("the '735 application"), which Leviton Manufacturing filed on July 21, 2008. See Response at 7; Memorandum at 10. The '929 application was filed as a continuation
In September 2010, Leviton Manufacturing filed patent infringement complaints
On October 28, 2010, the Plaintiffs filed their Complaint for Declaratory and Injunctive Relief. See Doc. 1 ("Complaint"). They assert ten Counts against Leviton Manufacturing: (i) Count I is a claim for declaratory judgment and injunctive relief, requesting a ruling from the Court that Leviton Manufacturing violated the CSA's exclusive forum-selection provision; (ii) Count II is a claim for declaratory judgment of non-infringement based on license or estoppel; (iii) Count III is a claim for declaratory judgment of non-infringement of the '124 patent; (iv) Count IV is a claim for declaratory judgment of non-infringement of the '151 patent; (v) Count V is a claim for declaratory judgment of invalidity of the '124 patent; (vi) Count VI is a claim for declaratory judgment of invalidity of the '151 patent; (vii) Count VII is a claim for declaratory judgment of invalidity of the '124 and '151 patents because of prosecution laches; (viii) Count VIII is a claim for declaratory judgment of inequitable conduct with respect to the '124 and '151 patents; (ix) Count IX is a claim for attorneys' fees on the ground that this case is an "exceptional case" under 28 U.S.C. § 285; and (x) Count X is a claim for breach of contract. Complaint ¶¶ 40-116, at 9-23. Leviton Manufacturing asserts three counterclaims against the Plaintiffs: (i) Counterclaim I is for infringement
The Court issued a Memorandum Opinion and Order, 2010 WL 5559750 (Doc. 41)("Nov. 30, 2010 MOO") on the Plaintiffs' Motion for Temporary Restraining Order and Preliminary Injunction, filed November 2, 2010 (Doc. 5), granting the Plaintiffs' request for a preliminary injunction. The Court enjoined Leviton Manufacturing to take all actions necessary to secure dismissal of all claims of patent infringement asserted against the Plaintiffs in the ITC action and the action in the Northern District of California. See Nov. 30, 2010 MOO at 46. The Plaintiffs also requested a temporary restraining order compelling Leviton Manufacturing to stay the ITC action, but the Court denied that requested ruling, finding it unnecessary in light of the Court's granting of the preliminary injunction. See Nov. 30, 2010 MOO at 46. On December 8, 2010, Leviton Manufacturing filed a Notice of Appeal, appealing the Court's grant of the preliminary injunction to the United States Court of Appeals for the Federal Circuit. See Notice of Appeal at 1, filed December 8, 2010 (Doc. 53). On July 8, 2011, the Federal Circuit issued a Judgment affirming the Court's grant of the preliminary injunction. See Judgment at 1, filed October 5, 2011 (Doc. 146).
In early 2011, General Protecht moved to dismiss Leviton Manufacturing's trade-secret claim for lack of subject-matter jurisdiction. See GPG's Motion to Dismiss Leviton's Trade Secret Misappropriation Counterclaim for Lack of Jurisdiction at 1, filed January 10, 2011 (Doc. 73)("GPG's MTD"). General Protecht asserts that there is no common nucleus of fact between the federal causes of action relating to patent infringement, over which the Court has original subject-matter jurisdiction under 28 U.S.C. § 1331, and the trade-secret counterclaim Leviton Manufacturing asserts against General Protecht. See Memorandum in Support of GPG's Motion to Dismiss Leviton's Trade Secret Misappropriation Counterclaim for Lack of Subject Matter Jurisdiction at 1-3, filed January 10, 2011 (Doc. 74)("GPG's MTD Memo."). It notes that the Court has only supplemental jurisdiction over the trade-secret claim. See GPG's MTD Memo. at 3. General Protecht asserts that diversity jurisdiction does not exist in this case, because some Plaintiffs and the Defendant share citizenship, thus destroying complete diversity. See GPG's MTD Memo. at 3. General Protecht asserts that the dispute underlying the trade-secret claim is not so related as to be part of the same case or controversy as the dispute underlying the patent claims. See GPG's MTD Memo. at 3-4. General Protecht argues that, even if supplemental jurisdiction exists over the trade-secret claim, the Court should decline to exercise supplemental jurisdiction over that claim. See GPG's MTD Memo. at 4-6.
On November 3, 2011, Leviton Manufacturing filed its response to General Protecht's motion to dismiss. See Leviton's Memorandum of Law in Opposition to GPG's Motion to Dismiss Leviton's Trade Secret Counterclaim for Lack of Subject Matter Jurisdiction (Doc. 150) ("Response to GPG's MTD"). It asserts that its trade-secret counterclaim arises out of the same common nucleus of operative fact as the patent dispute. See Response to GPG's
In October of 2011, Leviton Manufacturing filed a motion to dismiss. See Defendant Leviton Manufacturing Co., Inc.'s Motion to Dismiss Patent Claims and Counterclaims at 1, filed October 11, 2011 (Doc. 144)("Leviton's MTD"). Leviton Manufacturing asks the Court to enter "an order dismissing its First and Second Counterclaims" for patent infringement with prejudice. Leviton Manufacturing Co., Inc.'s Memorandum of Law in Support of Its Motion to Dismiss Patent Claims and Counterclaims at 1, filed October 11, 2011 (Doc. 145)("Leviton's MTD Memo."). It argues that "[t]he dismissal of its Patent Counterclaims with prejudice by Leviton coupled with the this [sic] Court's decision, as affirmed by the" Federal Circuit's decision, that the "Plaintiffs have an implied license to the '124 and '151 patents for the products currently at issue, render moot both the Patent Counterclaims and Patent Claims." Leviton's MTD Memo. at 1-2 (footnote omitted). It contends that the Court should dismiss Counts II through VIII as moot. See Leviton's MTD Memo. at 2-5. Leviton Manufacturing asserts that, once it dismisses its patent counterclaims, there will "no longer [be] a `substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.'" Leviton's MTD Memo. at 3-4 (quoting MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 126, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007)). It contends that the Federal Circuit has recognized that "a covenant not to sue already exists" in the parties' earlier settlement agreement and that, thus, the case is now moot. Leviton's MTD Memo. at 4.
On November 3, 2011, the Plaintiffs responded to Leviton's MTD. See Plaintiffs' Response to Leviton's Motion to Dismiss Patent Claims and Counterclaims (Doc. 149) ("Response to Leviton's MTD"). The "Plaintiffs agree that Leviton's infringement counterclaims should be dismissed with prejudice," and they also consent to dismissal of Counts III and IV without prejudice. Response to Leviton's MTD at 1. They oppose dismissal of the remaining Counts that they have asserted against Leviton Manufacturing. See Response to Leviton's MTD at 1. They assert that, rather than dismiss Count II as moot, the Court should enter judgment in favor of the Plaintiffs on Count II based on the Federal Circuit's finding that the Plaintiffs have an implied license to the '124 and '151 patents for the products described in the parties' settlement agreement. See
On November 21, 2011, Leviton Manufacturing filed its reply brief to the Response to Leviton's MTD. See Leviton's Reply to Plaintiffs' Opposition to Leviton's Motion to Dismiss Patent Claims and Counterclaims (Doc. 154)("Reply to Response to Leviton's MTD"). It asserts that, even if the Court can exercise jurisdiction over the remaining patent claims in the Plaintiffs' declaratory judgment action, it should decline to do so. See Reply to Response to Leviton's MTD at 7-10. On November 30, 2011, the Plaintiffs filed a surreply brief. See Plaintiffs' Surreply Brief in Opposition to Leviton's Motion to Dismiss Patent Claims and Counterclaims (Doc. 158-1)("Surreply"). The Plaintiffs argue that the Federal Circuit's "finding of implied license renders the infringement issue fully litigated." Surreply at 2.
On January 18, 2012, Harbor Freight and Central Purchasing informed the Court that, in contradiction to their earlier position, they now consent "to the dismissal of Counts III-VIII as they apply to" them, "so long as the dismissal is" without prejudice. Letter to the Court from Mark J. Rosenberg at 1 (dated Jan. 18, 2012), filed January 17, 2012 (Doc. 165). On February 14, 2012, the remaining Plaintiffs, besides Harbor Freight and Central Purchasing, informed the Court that they are "willing to consent to dismissal of Counts III through VIII" if dismissal is without prejudice. Letter to the Court from William F. Long at 1 (dated February 14, 2012), filed February 14, 2012 (Doc. 168).
At the hearing on February 16, 2012, the Court inquired whether considerations of fairness and efficiency have any bearing on its determination whether it has supplemental jurisdiction over the trade-secret claim. See Transcript of Hearing at 13:11-15 (taken Feb. 16, 2012)(Court)("Feb. 16, 2012 Tr.").
During a discussion of Leviton's MTD Memo., Leviton asserted that the Court should not state whether the dismissal of the claims to which the parties have agreed to dismissal is with or without prejudice, but should state instead that it will dismiss the claims for lack of subject-matter jurisdiction based on the lack of a case or controversy. See Feb. 16, 2012 Tr. at 26:10-22 (Shatzer). The Plaintiffs argued that, rather than agreeing with Leviton that the claims they have asserted in Counts III through VIII are moot, they have chosen not to oppose Leviton's MTD Memo. seeking dismissal of those claims as long as dismissal is without prejudice. See Feb. 16, 2012 Tr. at 28:8-10 (Long). The Plaintiffs argued that, because a dismissal for lack of subject-matter jurisdiction is, under rule 41(b) of the Federal Rules of Civil Procedure, without prejudice, the Court does not need to specify whether the dismissal is with or without prejudice. See Feb. 16, 2012 Tr. at 28:16-20 (Long). The Court inquired whether the parties would find it acceptable for the Court to dismiss the claims asserted in Counts III through VIII for lack of subject-matter jurisdiction without mentioning whether the dismissal is with or without prejudice. See Feb. 16, 2012 Tr. at 30:3-5 (Court). Leviton Manufacturing asserted that it was amenable to this proposal. See Feb. 16, 2012 Tr. at 30:6-7 (Shatzer). The Plaintiffs stated that this proposal was acceptable given that the dismissal would ultimately be without prejudice, but noted that they are having trouble understanding why Leviton Manufacturing would not agree to the order stating the dismissal is without prejudice. See Feb. 16, 2012 Tr. at 30:8-12 (Long); id. at 31:20-32:3 (Long).
Leviton Manufacturing asserted that entering judgment in favor of the Plaintiffs on Count II is not appropriate given that the Federal Circuit's decision was a ruling on an appeal of a preliminary junction as opposed to a dispositive motion. See Feb. 16, 2012 Tr. at 32:13-33:18 (Shatzer). Leviton Manufacturing argued that, instead, dismissal of Count II as moot is appropriate in light of its agreement to dismiss its patent counterclaims with prejudice. See Feb. 16, 2012 Tr. at 32:13-33:18 (Shatzer). The Plaintiffs explained that they had previously believed, based on Leviton Manufacturing's briefing, that it had conceded that entry of judgment in the Plaintiffs' favor was appropriate for Count II. See Feb. 16, 2012 Tr. at 35:9-20 (Long). The Plaintiffs related that, in light of Leviton Manufacturing's clarification of its position at the hearing, they planned to file a motion for summary judgment if the Court denies Leviton's MTD Memo. See Feb. 16, 2012 Tr. at 35:9-20 (Long). The Plaintiffs asserted that they read certain statements in Leviton Manufacturing's briefing as admissions that the Plaintiffs have an implied license regarding the '124 and '151 patents, but noted that those statements may not have been intended as admissions. See Feb. 16, 2012 Tr. at 36:6-25 (Long).
Following the February 16, 2012 hearing, the Plaintiffs filed a separate motion for summary judgment in which they sought summary judgment in their favor on Counts I and II. See Plaintiffs' Motion for Summary Judgment that Leviton Breached its Implied License at 1, filed March 8, 2012 (Doc. 171)("Plaintiffs' MSJ"). Later that month, Leviton Manufacturing filed a cross-motion for summary judgment on Counts I and II. See Leviton's Memorandum of Law in Opposition to Plaintiffs' Motion for Summary Judgment that Leviton Breached its Implied License, filed March 26, 2012 (Doc. 182)("Leviton's MSJ").
On May 12, 2012, 2012 WL 1684573, the Court issued a Memorandum Opinion and Order (Doc. 193)("May 12, 2012 MOO") on several motions: (i) GPG's MTD; (ii) Leviton's MTD; (iii) the Plaintiffs' MSJ; and (iv) Leviton's MSJ. The Court granted GPG's MTD, dismissing Leviton's Counterclaim III. See May 12, 2012 MOO at 2. The Court also partially granted Leviton's MTD, dismissing Counterclaims I and II with prejudice. See May 12, 2012 MOO at 2. With Counterclaims I and II dismissed, the Court dismissed Count II as moot. See May 12, 2012 MOO at 2. The Court declined to exercise supplemental jurisdiction over the remaining state-law claims — Counts I and X. See May 12, 2012 MOO at 2. With Count II moot and the Court declining supplemental jurisdiction over Count I, the Court denied both parties' MSJs as moot. See May 12, 2012 MOO at 2. The Court retained jurisdiction, however, over the question of attorneys' fees under 35 U.S.C. § 285. See May 12, 2012 MOO at 2. The Court entered a final judgment on May 14, 2012. See Final Judgment at 2, filed May 14, 2012 (Doc. 194).
On June 22, 2012, the Plaintiffs filed a Brief in Support of Motion for Finding of Exceptional Case Under 35 U.S.C. § 285 and Award of Attorneys' Fees, filed June 22, 2012 (Doc. 203)("Plaintiffs' Exceptional
The Plaintiffs argue this case is an exceptional one, because Leviton Manufacturing acted in "[b]ad [f]aith" by: (i) filing suits against the Plaintiffs in forums other than the District of New Mexico, in breach of the CSA; and (ii) asserting patent infringement counterclaim for licensed patents. Plaintiffs' Exceptional Case Brief at 8-9. The Plaintiffs contend that "Leviton's bad faith disregard of the terms of the [CSA] effectively forced the Plaintiffs to commence this action for declaratory judgment and move for preliminary injunction." Plaintiffs' Exceptional Case Brief at 9.
The Plaintiffs argue that courts can infer bad faith "[w]hen the patentee is manifestly unreasonable in assessing the infringement, while continuing to assert infringement in court, whether grounded in or denominated wrongful intent, recklessness, or gross negligence." Plaintiffs' Exceptional Case Brief at 10 (quoting Phonometrics, Inc. v. Westin Hotel Co., 350 F.3d 1242, 1246 (Fed.Cir.2003))(internal quotations omitted). Similarly, according to the Plaintiffs, Leviton Manufacturing "was grossly negligent in asserting its infringement claims and counterclaims," because, "[g]iven the well-established law regarding implied licenses, had Leviton conducted any research on the issue before commencing its litigation strategy, it would have known that the Settlement Agreement granted GPG and Habor Freight an implied license." Plaintiffs' Exceptional Case Brief at 11. The Plaintiffs contend that "the question of infringement was not close because, as this court and the Federal Circuit affirmed, the patents-in-suit were covered by an implied license that Leviton granted to the Plaintiffs through the Settlement Agreement." Plaintiffs' Exceptional Case Brief at 10.
The Plaintiffs assert they are the "prevailing party" under 35 U.S.C. § 285 because: (i) the Court granted their requested injunction against Leviton; and (ii) Leviton ultimately dismissed its patent infringement counterclaims against the Plaintiffs "with prejudice and without any agreement that the parties would bear their respective attorneys' fees." Plaintiffs' Exceptional Case Brief at 7.
The Plaintiffs argue that they are entitled to the attorneys' fees they accrued defending Leviton Manufacturing's appeal of the Court's preliminary injunction. See Plaintiffs' Exceptional Case Brief at 12. The Plaintiffs argue that Leviton Manufacturing "conducted a `scorched earth' strategy for [its] appeal, when it should have simply complied with the injunction." Plaintiffs' Exceptional Case Brief at 12. They contend that, instead, Leviton Manufacturing appealed to the Federal Circuit "despite the clear contract provisions and the clear law establishing the implied license," moved both the Court and the Federal Circuit to stay the injunction pending appeal, sought amicus support, and requested en banc rehearing after the Federal Circuit affirmed the injunction. Plaintiffs' Exceptional Case Brief at 12. They further argue that "[e]ach of Leviton's actions required a response from the Plaintiffs; indeed the Federal Circuit ordered the Plaintiffs to respond to Leviton's petition for rehearing en banc." Plaintiffs' Exceptional Case Brief at 12.
General Protecht seeks $1,047,155.95 in attorneys' fees and related expenses. See
Less than a month later, Leviton Manufacturing filed its Memorandum of Law in Opposition to Plaintiffs' Motion for Finding of Exceptional Case Under 35 U.S.C. § 285 and Award of Attorneys' Fees and Motion to Tax Costs, filed July 16, 2012 (Doc. 213)("ECB Response"). It contends that "[n]othing about this case was exceptional... [,][and] every objective factor indicates that this case involved a non-frivolous dispute and that Leviton acted reasonably and with the aim of resolving the dispute as efficiently as possible." ECB Response at 1. Should the Court choose to award attorneys' fees, Leviton Manufacturing contends that the Plaintiffs have requested payment of fees "to which they are not entitled ... [,] includ[ing] fees and costs for time spent on paralegals performing tasks secretarial in nature and for claims not within the scope of 35 U.S.C. § 285." ECB Response at 1.
Leviton Manufacturing asserts that it did not act in bad faith to avoid the Court's jurisdiction. See ECB Response at 3. Leviton Manufacturing represents that it chose the ITC "for the unique relief available from that venue" and filed in the Northern District of California because "it provided the only venue where there was [personal] jurisdiction over all twenty-nine named parties." ECB Response at 3. Moreover, "[i]t was also Leviton's belief at the time that since the patents in issue were excluded from the Settlement Agreement the forum selection clause was not an issue." ECB Response at 3.
Leviton Manufacturing contends that it did not engage in any misconduct or vexatious litigation; rather, it "advanced [only] non-frivolous arguments and acted professionally and ethically at every step." ECB Response at 9. Leviton Manufacturing notes that "[s]imply losing ... does not mean that engaging in the litigation was unreasonable." ECB Response at 10. Contrary to the Plaintiffs' assertion that the law regarding implied licenses is so well-established that Leviton should have anticipated the case's outcome, Leviton Manufacturing contends that "judicially implied licenses are rare under any doctrine." ECB Response at 10 (quoting Wang Labs., Inc. v. Mitsubishi Elecs. Am., Inc., 103 F.3d 1571, 1581 (Fed.Cir. 1997)). Furthermore, Leviton Manufacturing asserts that "[i]nfringement is often difficult to determine, and a patentee's ultimately incorrect view of how a court will find does not of itself establish bad faith." ECB Response at 10 (quoting Brooks Furniture Mfg., Inc. v. Dutailier Int'l, Inc., 393 F.3d 1378, 1381 (Fed.Cir.2005))(internal quotation marks omitted). Leviton Manufacturing contends that "the question of infringement was close because there was substantial and reasonable disagreement as to whether an implied license existed." ECB Response at 12. Leviton
Leviton Manufacturing also contends that it "acted carefully and with a goal of resolving this dispute as efficiently as possible," promptly complying with the preliminary injunction and dismissing its patent counterclaims once the Federal Circuit's decision was final. ECB Response at 11. Leviton Manufacturing contends it also cooperated with the Plaintiffs to create a Joint Status Report and Provisional Discovery Plan, and "[t]he only discovery dispute that needed to be brought to the Court's attention ... was resolved in Leviton's favor." ECB Response at 11. Leviton Manufacturing asserts that "[n]othing suggests [it] tried to impose unnecessary cost or burdens on Plaintiffs [or] engage in fraud or material misrepresentations." ECB Response at 11.
Leviton Manufacturing notes that not all Plaintiffs could assert a defense based on an implied license. See ECB Response at 11. Leviton Manufacturing argues that "the fact that the crux of Plaintiffs' arguments, the existence of an implied license, did not extend to all [of Leviton's] infringement allegations before this Court further undermines any suggestion that Leviton's position was objectively baseless." ECB Response at 12.
Leviton argues that the Court has already indicated it does not consider the litigation baseless. See ECB Response at 14. For instance, Leviton Manufacturing notes that the Court wrote that "[n]o New Mexico Court or Tenth Circuit court has addressed whether a forum selection clause applies to actions where the contract containing the forum selection clause is raised only as a defense." ECB Response at 14 (quoting Nov. 30, 2010 MOO at 34)(internal quotation marks omitted). Additionally, Leviton Manufacturing argues that, when the Court found that "the best construction" of the Settlement Agreement is that it establishes an implied license to the '124 and '151 patents, the Court implicitly acknowledged that the Settlement Agreement may allow for other constructions. ECB Response at 14 (quoting Nov. 30, 2010 MOO)(internal quotation marks omitted). Finally, Leviton Manufacturing argues that the "Court's lengthy opinion[,] followed by oral argument and a precedential opinion at the Federal Circuit[,] suggest that this case is far from frivolous, i.e., objectively baseless." ECB Response at 14.
Leviton Manufacturing argues that it did not act with subjective bad faith, because "Leviton understood [the] [Settlement Agreement's] language to apply only to the '558 and '766 patents [and not] to any other patents existing at the time or that might issue in the future." ECB Response at 15 (quoting Declaration of Meir Y. Blonder in Support of Defendant Leviton Manufacturing Co., Inc.'s Opposition to Plaintiff's Motion for Temporary Restraining Order and Preliminary Injunction (executed Nov. 5, 2010), filed on Nov. 12, 2012 (Doc. 20)("Blonder Decl.")).
Leviton Manufacturing contends that, even if the Court rules that this case is exceptional, an award of attorneys' fees is not warranted, because "none of the relevant factors, such as `the closeness of the case, the tactics of counsel, the flagrant or
The Plaintiffs replied to the ECB Response two weeks later. See Reply in Support of Motion for Finding of Exceptional Case Under 35 U.S.C. § 285 and Award of Attorneys' Fees and Motion to Tax Costs, filed August 2, 2012 (Doc. 220)("Plaintiffs' Reply ECB"). The Plaintiffs argue that "[t]his case is exceptional for two reasons: (1) Leviton's frivolous assertion that this Court did not have jurisdiction over its patent infringement claims, and (2) Leviton's insistence on continuing the litigation once it had lost at both the District Court and Federal Circuit." Plaintiffs' Reply ECB at 1. The Plaintiffs argue that, "[e]ven if Leviton had a good faith belief that the Settlement Agreement did not cover the '124 and '151 patents, it knew, or should have known, that Plaintiffs would assert the Settlement Agreement as a defense, thereby necessitating that Leviton's action be filed in this
Additionally, the Plaintiffs argue that "Leviton prolonged these proceedings unnecessarily at every stage, thereby increasing Plaintiff's [sic] fees and expenses" by seeking a stay in the injunction, appealing to the Federal Circuit, seeking another stay, and attempting to recruit several amici. Plaintiffs' Reply ECB at 3. The Plaintiffs assert that "[e]very effort by Leviton to prolong these proceedings necessitated a response from Plaintiffs, thereby increasing Plaintiffs' fees and costs." Plaintiffs' Reply ECB at 3.
The Plaintiffs contend that, "although Leviton's counterclaims may not have been frivolous when originally asserted, [they] became frivolous, at the very least, after the Federal Circuit affirmed this Court's decision.... Leviton should have dropped its appeal and its counterclaims at that point rather than seeking an en banc review." Plaintiffs' Reply ECB at 3. The Plaintiffs contend that, "[w]hen viewed in isolation, it might appear that Leviton was merely exercising the options available to it under the governing rules[,] ... [b]ut this court should ... evaluate the overall pattern of Leviton's conduct in which it failed to heed the numerous road signs warning it to `STOP.'" Plaintiffs' Reply ECB at 4.
The Plaintiffs argue that an award of attorneys' fees is necessary to avoid gross injustice, because Leviton Manufacturing acted in bad faith. See Plaintiffs' Reply ECB at 5. The Plaintiffs contend that "[t]here can be no real dispute about the fact [that Leviton Manufacturing] was in possession of objective evidence — the Settlement Agreement — at the outset of the case establishing that its infringement claims ... had to be brought in this District." Plaintiffs' Reply ECB at 6. Additionally, the Plaintiffs contend that Leviton Manufacturing was "aware of the legal basis for the Plaintiffs' implied license argument," not only because of TransCore, but because "Plaintiffs' counsel certainly notified Leviton of their implied license position." Plaintiffs' Reply ECB at 6. The Plaintiffs conclude: "That is proof enough of both objective baselessness, and subjective bad faith." Plaintiffs' Reply ECB at 6 (emphasis in original).
The Plaintiffs contend that their fee requests are appropriate and reasonable. See Plaintiffs Reply ECB at 7. They explain that they requested expenses relating to the ITC proceedings, because "such legal time was incurred in order to obtain information necessary to proceed with their motion for a preliminary injunction, to ensure Leviton's compliance with the Court's order granting that injunction and to obtain information requested by the Court...." Plaintiffs' Reply ECB at 7. The Plaintiffs also assert that their requested legal fees are reasonable, because the "Plaintiffs achieved an excellent result from the litigation, defeating Leviton at every stage, despite Leviton's scorched earth tactics." Plaintiffs' Reply ECB at 7.
The Plaintiffs contend that the Federal Circuit allows parties to collect paralegal fees, even for work that attorneys do not traditionally do. See Plaintiffs' Reply ECB at 9. The Plaintiffs contend that Leviton Manufacturing's arguments to the contrary rely on "uncontrolling and inapposite case law from the Fifth and Eleventh Circuits." Plaintiffs' Reply ECB at 9. The Plaintiffs further argue that they seek to recover costs for work that is "not merely clerical in nature[, such as] charges relating to the creation and maintenance of sophisticated computer databases by highly skilled information technology specialists." Plaintiffs' Reply ECB at 10.
At the hearing on March 6, 2013, Leviton Manufacturing argued that the Federal Circuit, in publishing an opinion and requesting the Plaintiffs respond to Leviton Manufacturing's motion for en banc rehearing, demonstrated that Leviton Manufacturing's case had precedential value. See Transcript of Hearing at 25:1-7 (taken March 6, 2013)(Shatzer)("March 6, 2013 Tr."). Leviton Manufacturing also noted that a law professor included the Federal Circuit's opinion in an intellectual property class syllabus.
March 6, 2013 Tr. at 28:19-25 (Fort). Ms. Fort also stated that "the only place where I think it might be fair to say that... Leviton's conduct was not exceptional was in opposing the preliminary injunction." Mar. 6, 2013 Tr. at 36:15-18 (Fort). Mark J. Rosenberg, another Plaintiffs' counsel, disagreed, however, stating: "I believe that the preliminary injunction motion should not have ever had to be [sic] filed[,] ... [because,] before we filed this case[,] we put Leviton on notice of TransCore[,] and they proceeded anyway." March 6, 2013 Tr. at 37:14-19 (Rosenberg). Ms. Fort also questioned Leviton Manufacturing's evidence of its subjective
Section 285 of Title 35 of the United States Code provides: "The court in exceptional cases may award reasonable attorney fees to the prevailing party." 35 U.S.C. § 285. The test for determining whether a case is exceptional under § 285 formerly came from Brooks Furniture Manufacturing, Inc. v. Dutailier International, Inc., 393 F.3d 1378 (Fed.Cir.2005) ("Brooks"). Brooks outlined two scenarios that can render a case "exceptional." First, "[a] case may be deemed exceptional when there has been some material inappropriate conduct related to the matter in litigation, such as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Fed.R.Civ.P. 11, or like infractions." Brooks, 393 F.3d at 1381. Second, a case may be exceptional "if both (1) the litigation is brought in subjective bad faith, and (2) the litigation is objectively baseless." Brooks, 393 F.3d at 1381.
In 2014, however, the Supreme Court of the United States expressly rejected the Brooks framework as being "overly rigid" and "superimpos[ing] an inflexible framework onto statutory text that is inherently flexible." Octane Fitness, LLC v. ICON Health & Fitness, Inc., ___ U.S. ___, 134 S.Ct. 1749, 1756, 188 L.Ed.2d 816 (2014) ("Octane"). The Supreme Court also took issue with Brooks' imposition of a "clear and convincing" standard, noting that patent-infringement cases typically require only a showing of a "preponderance of the evidence." Octane, 134 S.Ct. at 1758.
Octane overruled Brooks and held that an "exceptional" case is merely one that "stands out from others with respect to the substantive strength of a party's litigating position ... or the unreasonable manner in which the case was litigated." Octane, 134 S.Ct. at 1752. To determine whether a case is exceptional, district courts may "consider[] the totality of the circumstances" on a case-by-case basis. Octane, 134 S.Ct. at 1752. While not providing a precise rule to apply, the Supreme Court suggested that district courts consider a "nonexclusive list of factors, including frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence." 134 S.Ct. at 1756 n. 6 (2014) (quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 534, 114 S.Ct. 1023, 127 L.Ed.2d 455(1994)) (internal quotation marks omitted). "Because § 285 commits the determination whether a case is `exceptional' to the discretion of the district court, that decision is to be reviewed on appeal for abuse of discretion." Highmark Inc. v. AllCare Health Mgmt. Sys. Inc., ___ U.S. ___, 134 S.Ct. 1744, 1748, 188 L.Ed.2d 829 (2014) ("Highmark"). "Although the award of fees is clearly within the discretion of the district court, when ... a court
Section 285 also requires that a party must be the "prevailing party" in the litigation to receive attorneys' fees. 35 U.S.C. § 285. A party is the prevailing party so long as "`they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.'" Hensley, 461 U.S. at 433, 103 S.Ct. 1933 (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir.1978)). A party prevails "when actual relief on the merits of his claim materially alters the legal relationship between the parties by modifying the [non-movant's] behavior in a way that directly benefits the [movant]." Farrar v. Hobby, 506 U.S. 103, 111-12, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992).
"Allowance of fees only in exceptional cases is based on the premise that courts should attempt to strike a balance between the interest of the patentee in protecting his statutory rights and the interest of the public in confining such rights to their legal limits." Mach. Corp. of Am. v. Gullfiber AB, 774 F.2d 467, 471 (Fed. Cir.1985). A court may award attorney's fees under this statute to either a plaintiff or a defendant. See Phonometrics, Inc. v. ITT Sheraton Corp., 64 Fed.Appx. 219, 221 (Fed.Cir.2003) (unpublished)
"As a general matter, ... a claim for attorney's fees is not part of the merits of the action to which the fees pertain." Budinich v. Becton Dickinson & Co., 486 U.S. 196, 200, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988). "Such an award does not remedy the injury giving rise to the action, and indeed is often available to the party defending against the action." Budinich v. Becton Dickinson & Co., 486 U.S. at 200, 108 S.Ct. 1717. "At common law, attorney's fees were regarded as an element of `costs' awarded to the prevailing party." Budinich v. Becton Dickinson & Co., 486 U.S. at 200, 108 S.Ct. 1717. Additionally, "[m]any federal statutes providing for attorney's fees continue to specify that they are to be taxed and collected as `costs.'" Budinich v. Becton Dickinson & Co., 486 U.S. at 201, 108 S.Ct. 1717. Even when a lower court has not yet decided the issue of attorneys' fees, and the attorneys' fees are "part of the merits of judgment," the merits of a case are still final for appellate purposes:
Budinich v. Becton Dickinson & Co., 486 U.S. at 202, 108 S.Ct. 1717. It is irrelevant for purposes of determining whether the merits of an action are final — and thus appealable — whether the plaintiff requested attorney's fees as part of the prayer in his or her complaint, or in a separate
To determine the amount of reasonable attorneys' fees, the Federal Circuit calls for district courts to calculate a "lodestar" amount, determined "by multiplying the number of hours reasonably expended by a reasonable hourly rate." Bywaters v. United States, 670 F.3d at 1225-26. This lodestar figure "provides an objective basis on which to make an initial estimate of the value" of an attorney's services. Hensley, 461 U.S. at 433, 103 S.Ct. 1933. The party requesting attorneys' fees must submit evidence to support its representations of time spent and rates sought. See Hensley, 461 U.S. at 434, 103 S.Ct. 1933. If the evidence is inadequate, the district court may reduce the fee award accordingly. See Hensley, 461 U.S. at 434, 103 S.Ct. 1933.
A district court may also make adjustments to the lodestar figure to reflect a plaintiff's overall success level. See Bywaters v. United States, 670 F.3d at 1229 (citing Hensley, 461 U.S. at 435-36, 103 S.Ct. 1933). "There is no precise rule or formula" for making such determinations. Hensley, 461 U.S. at 436, 103 S.Ct. 1933. In Hensley, the Supreme Court explained the rationale behind this approach:
461 U.S. at 435, 103 S.Ct. 1933.
While discrete acts of litigation misconduct can, on their own, render an entire case exceptional, "the amount of the award must bear some relation to the extent of the misconduct." Read Corp. v. Portec, Inc., 970 F.2d 816, 831 (Fed.Cir. 1992). Thus, district courts may, in those cases, award attorneys' fees under § 285 relating only to the litigation misconduct. See, e.g., Digital Reg of Tex., LLC v. Adobe Sys., Inc., No. CIV 12-1971 CW, 2015 WL 1026226, at *5 (N.D.Cal.2015) ("Adobe's motion for attorneys' fees ... is GRANTED to the extent that it is entitled to fees, in an amount to be determined, incurred in relation to Mr. Patterson's and Mr. Venters' deposition and testimony.")
Furthermore, when a plaintiff brings related claims, failure on some claims should not preclude full recovery if the plaintiff achieves success on a significant interrelated claim. See Hensley, 461 U.S. at 440, 103 S.Ct. 1933 ("Where a lawsuit consists of related claims, a plaintiff who has won substantial relief should not have his attorney's fee reduced simply because the district court did not adopt each contention raised."). Claims are interrelated when they are either based on "a common core of facts" or based on "related legal theories." Hensley, 461 U.S. at 435, 103 S.Ct. 1933. The Supreme Court explained: "Litigants in good faith may raise alternative legal grounds for a desired outcome, and the court's rejection of or failure to reach certain grounds is not a sufficient reason for reducing a fee." Hensley, 461 U.S. at 435, 103 S.Ct. 1933.
The Court will deny the Plaintiffs' motion for attorneys' fees, because Leviton Manufacturing neither pursued objectively
Attorneys' fees under § 285 are available only to the prevailing party. A prevailing party is one that "succeed[s] on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.'" Hensley, 461 U.S. at 433, 103 S.Ct. 1933 (quoting Nadeau v. Helgemoe, 581 F.2d at 278-279 (1st Cir.1978)). A party prevails "when actual relief on the merits of his claim materially alters the legal relationship between the parties by modifying the [nonmovant's] behavior in a way that directly benefits the [movant]." Farrar v. Hobby, 506 U.S. at 111-12, 113 S.Ct. 566.
The Court agrees with the Plaintiffs that they are the "prevailing party" under 35 U.S.C. § 285, because: (i) the Court granted their requested injunction against Leviton Manufacturing, see Nov. 30, 2010 MOO at 2, which the Federal Circuit upheld on appeal, see Gen. Protecht Grp., Inc. v. Leviton Mfg. Co., Inc., 651 F.3d 1355, 1366 (Fed.Cir.2011); and (ii) Leviton Manufacturing ultimately dismissed its patent infringement counterclaims against the Plaintiffs with prejudice, see May 12, 2012 MOO at 32. The injunction ordered Leviton Manufacturing to "dismiss its patent-infringement claims against the Plaintiffs in the pending ITC action and in the pending action in the United States District Court for the Northern District of California," Nov. 30, 2010 MOO at 2, which "alter[ed] the legal relationship between the parties by modifying [Leviton Manufacturing's] behavior in a way that directly benefit[ed]" the Plaintiffs, Farrar v. Hobby, 506 U.S. at 111-12, 113 S.Ct. 566, because the Plaintiffs no longer had to defend themselves in forums other than the forum upon which the parties had previously agreed.
Furthermore, that the Court dismissed all of the Plaintiffs' counts requesting declaratory judgments of non-infringement and invalidity of Leviton Manufacturing's '124 and '151 patents, see May 12, 2012 MOO at 32, does not suggest that the Plaintiffs could not prevail on those counts. Rather, the Plaintiffs requested that the Court dismiss those claims pursuant to an agreement with Leviton Manufacturing following the Federal Circuit's ruling; Leviton Manufacturing, in turn, agreed to ask the Court to dismiss its infringement counterclaims against the Plaintiffs with prejudice, to which the Court agreed. See May 12, 2012 MOO at 32. Thus, the Plaintiffs effectively beat Leviton Manufacturing's infringement claims.
There is no question that the rules from Octane make it easier for district courts to award attorneys' fees in patent cases than was the case under Brooks. Likewise, Highmark means district courts' decisions to award or not award attorneys' fees are now far more likely to be upheld on appeal. For one, the standard for exceptionality is now more relaxed. Under Brooks, a case was exceptional only when the district court found either: (i) "some material inappropriate conduct related to the matter in litigation, such as willful infringement, fraud or inequitable
The second reason why district courts can award attorneys' fees more easily in patent cases now is that the standard of proof has been eased considerably. Under Brooks, a party seeking attorneys' fees awards under § 285 could do so by "clear and convincing evidence." Brooks, 393 F.3d at 1382. The Supreme Court noted, however, that, in the past, it has "not interpreted comparable fee-shifting statutes to require ... clear and convincing evidence." Octane, 134 S.Ct. at 1758. Moreover, "nothing in § 285 justifies such a high standard of proof[;][it] imposes no specific evidentiary burden, much less such a high one." Octane, 134 S.Ct. at 1758. Instead, the Supreme Court found the "preponderance of evidence" standard appropriate, particularly in light of that standard's traditional role in patent cases in particular and in civil actions in general. Octane, 134 S.Ct. at 1758.
Third, the standard of review is now more deferential to district court decisions. Before Highmark, the Federal Circuit would review appeals to § 285 rulings de novo (for questions of law) or for clear error (for questions of fact). See Highmark, 134 S.Ct. at 1748. In Highmark, issued the same day as Octane, the Supreme Court stated that, because determining whether a case is exceptional is now, under Octane, a matter of the court's discretion, the standard of review on appeal can be only for abuse of that discretion. See Highmark, 134 S.Ct. at 1748.
While the new guidelines clearly make the prevailing party's job easier in getting attorneys' fees under § 285, the few articles published evaluating Octane's actual impact reflect some uncertainty regarding how much Octane will truly change the game. For instance, one study of § 285 cases in district courts from the release of Octane, on April 29, 2014, through September 7, 2014, found no dramatic change from the Brooks era. The study noted that "[t]he analysis necessary to decide whether to assert an infringement claim or assert a defense to an infringement claim should not change," and predicted that "[t]he impact of Octane Fitness and Highmark
Darin Jones, A Shifting Landscape for Shifting Fees: Attorney-Fee Awards in Patent Suits After Octane and Highmark, 90 Wash. L.Rev. 505, 532 (2015).
Here, the Court has the task of not only applying the new Octane standards to this case, but also rendering judgment based on the parties' arguments formulated under the outdated Brooks framework. Doing so in this case is acceptable, not only because the parties had over a year to file supplemental briefs to the Court offering new arguments and chose not to do so, but because their original arguments are still relevant. For instance, the Plaintiffs' contention that "Leviton conducted its appeal in a vexatious manner," Plaintiffs' Reply ECB at 8, is far from obsolete even though Octane made no mention of the "vexatious litigation" path to exceptionality which Brooks expressly mentioned, 393 F.3d at 1381, because such arguments can be neatly tucked into Octane's "unreasonable manner in which the case was litigated" standard, Octane, 134 S.Ct. at 1752. Likewise, the Plaintiffs' allegations that Leviton Manufacturing knew its position was baseless, but pursued it anyway, fits nicely within Octane's "substantive strength of a party's litigating position." Octane, 134 S.Ct. at 1752. Additionally, the non-exclusive factors that the Supreme Court suggested — "frivolousness, motivation, objective unreasonableness ... and the need in particular circumstances to advance considerations of compensation and deterrence," Octane, 134 S.Ct. at 1756 n. 6 — indicate that the Court has all the information and discretion it needs to settle this question using the language and arguments that the parties' put in their original briefs. As the Plaintiffs' argument for Leviton Manufacturing's litigation misconduct is almost entirely premised on Leviton Manufacturing's alleged bad faith pursuit of an objectively baseless claim, see, e.g., Plaintiffs' Reply ECB at 6, and the Plaintiffs have made no specific allegations of otherwise sanctionable misconduct, the Court will first consider the strength — or lack thereof — of Leviton Manufacturing's litigation position by asking whether its position was objectively baseless. Next, the Court will consider the unreasonableness of Leviton Manufacturing's litigation strategy in light of the strength of its position. Ultimately, the Court finds that the Plaintiffs have not proved by a preponderance of evidence that Leviton Manufacturing's position was objectively baseless, and, consequently, the Court does not find Leviton Manufacturing's position to be so weak as to support a finding of exceptionality on that basis alone. The Court also finds that, while Leviton Manufacturing's position was fatally weak, it was reasonable enough that pursuing it in this forum and in the Federal Circuit does not render this case exceptional.
The Court finds Leviton Manufacturing's position regarding the CSA's
The Plaintiffs make several arguments why Leviton Manufacturing's claims were objectively baseless. First, the Plaintiffs argue that this case is like Interspiro USA, Inc. v. Figgie International Inc., 18 F.3d 927 (Fed.Cir.1994) ("Interspiro"), which upheld a district court's holding, inter alia, that the case was "exceptional" and the prevailing party deserved attorneys' fees under 35 U.S.C. § 285, because "the question of infringement `was not close' and ... [the Defendant] demonstrated bad faith." 18 F.3d at 934. A closer look at that case reveals why this comparison is inapt. In Interspiro, the plaintiff manufactured a Self Contained Breathing Apparatus ("SCBA") designed to protect firefighters from inhaling toxic fumes. See Interspiro USA, Inc. v. Figgie Int'l, Inc., 815 F.Supp. 1488, 1498 (D.Del.1993). The SCBAs relied on a patented regulator which automatically pressurizes the mask — preventing toxic fumes from entering — when the firefighter inhales. See 815 F.Supp. at 1495. When the firefighter exhales, the force pushes a diaphragm of rubber disks upward, closing a valve and cutting off oxygen inflow to the mask; once the firefighter inhales, the force pulls the disks back down, uncovering the valve and allowing oxygen to flow again. See 815 F.Supp. at 1496. When the SCBA is not in use, firefighters can manually set a "detent mechanism" to secure the diaphragm against the valve opening, blocking oxygen flow; when a user puts on the mask and inhales, the force automatically releases the detent mechanism. 815 F.Supp. at 1496-97. The plaintiffs discovered that the defendants were producing SCBA units that used a similar regulator device. See 815 F.Supp. at 1497. The parties eventually reached a settlement under which the defendant would pay royalties to the plaintiff for each SCBA unit sold. See 815 F.Supp. at 1497. The defendants soon began producing a new SCBA model, called the E-Z Flo, featuring an automatic regulator seemingly designed to circumvent the plaintiff's patent. See 815 F.Supp. at 1497-98. The plaintiff sued the defendant, arguing, among other things, that the defendants owed royalties on the E-Z Flo under the original settlement, because the E-Z Flo was not a "new product." 815 F.Supp. at 1500. The court found that the E-Z Flo was not a new product, because the differences between the patented regulator and the E-Z Flo regulator were superficial. See 815 F.Supp. at 1521. The court concluded:
815 F.Supp. at 1521 (emphasis added).
The Court does not find that Interspiro proves the Plaintiffs' point. There is, of course, a fundamental difference complicating the comparison: Interspiro concerns a question of engineering — should
The Plaintiffs also argue, more generally, that Leviton Manufacturing's position was objectively baseless in part because Leviton Manufacturing should have known its case was flawed given the "well-established law regarding implied licenses." Plaintiffs' Exceptional Case Brief at 11. In response, Leviton Manufacturing contends that "judicially implied licenses are rare under any doctrine," ECB Response at 10 (quoting Wang Labs., Inc. v. Mitsubishi Elecs. Am., Inc., 103 F.3d 1571, 1581 (Fed.Cir.1997)), and that "[i]nfringement is often difficult to determine, and a patentee's ultimately incorrect view of how a court will find does not of itself establish bad faith," ECB Response at 10 (quoting Brooks, 393 F.3d at 1381).
The Court concludes that the question was not frivolous, and the Federal Circuit proceedings support this conclusion. Leviton Manufacturing argues that the "Court's lengthy opinion and the precedential Federal Circuit Opinion [demonstrate that] this case was subject to reasonable dispute." ECB Response at 10. Leviton Manufacturing also argues that, when the Court concluded that "the best construction" of the Settlement Agreement is that it established an implied license to the '124 and '151 patents, the Court implicitly acknowledged that the Agreement may allow for other constructions. ECB Response at 14 (quoting Nov. 30, 2010 MOO at 34)(internal quotation marks omitted). While the Court ultimately agrees with Leviton Manufacturing's conclusion, it hastens to add that Leviton Manufacturing may have read too much into the Court's MOO. As a general matter, the Court cautions against presumptions that the lengths of its opinions are necessarily proportional to the closeness of the question at hand. Additionally, referring to the "best construction" does not necessarily signal that it regards other interpretations as completely unreasonable. The Court, however, as mentioned above, did not include language — and finds no reason to conjure any now — indicating it found the very premise of Leviton Manufacturing's argument to be frivolous or objectively baseless. E.g., Intex Recreation Corp. v. Team Worldwide Corp., 2015 WL 135532, at *3 (finding a case exceptional in part because the defendant "filed a conclusory expert report and advanced flawed, non-sensical, and baseless arguments, which
Moreover, the Federal Circuit published its opinion. See Gen. Protecht Grp., Inc. v. Leviton Mfg. Co., Inc., 651 F.3d 1355. While the Plaintiffs argued, in the hearing on March 6, 2013, that there may be a number of reasons besides that it found merit in the question why a Federal Circuit court may publish an opinion, it is sensible to infer that the court did so because it saw an interesting legal question whose resolution could provide precedential value. Indeed, subsequent jurisprudence demonstrates that the Federal Circuit's ruling in General Protecht Group, Inc. v. Leviton Mfg. Co. Inc. has contributed to implied patent common law, helping to further define the doctrine beyond what can be gleaned from TransCore. In Universal Electronics, Inc. v. Universal Remote Control, Inc., for instance, published three years after General Protecht Group, Inc. v. Leviton Manufacturing Co. Inc., the court not only details the doctrinal contributions of the case, but calls them into question:
Universal Electronics, Inc. v. Universal Remote Control, Inc., 34 F.Supp.3d 1061, 1073-75 (C.D.Cal.2014) (Guilford, J.)(emphases added).
Additionally, several law journals have discussed the Federal Circuit's ruling in General Protecht Group, Inc. v. Leviton Mfg. Co. Inc. The American University Law Review, for instance, wrote that the Federal Circuit, in its ruling, demonstrated how settlement agreements creating implied licenses represent "[a]nother potential pitfall for patentees seeking to enforce their rights." Robert A. Pollock, et al.,
Brian Brunsvold & John C. Paul,
The Plaintiffs argue in the alternative that, if the Court does not find Leviton Manufacturing's position to be frivolous from the start, "Leviton's appeal became frivolous after ... the Federal Circuit affirmed the preliminary injunction." Plaintiffs' Reply ECB at 8. The Court disagrees as a matter of principle. In the Court's view, if a position is reasonable at the onset, it cannot simply transform into frivolity once asserted past some arbitrary junction along the path of rightful appeals.
Octane holds that a case can be "exceptional" under § 285 if it "stands out from others with respect to ... the unreasonable manner in which the case was litigated." Octane, 134 S.Ct. at 1752. District courts may consider a "nonexclusive list of factors, including frivolousness, motivation, objective unreasonableness ... and the need in particular circumstances to advance considerations of compensation and deterrence." Octane, 134 S.Ct. at 1756 n. 6 (internal quotations omitted)(quoting Fogerty v. Fantasy, Inc., 510 U.S. at 534, 114 S.Ct. 1023). Since the Octane ruling, "[a]mong the most commonly cited ways to establish exceptionality are ... showing the party proceeded in bad faith[,] and ... litigation misconduct." Bayer CropScience AG v. Dow AgroSciences LLC, No. CIV 12-0256 RMB/JS, 2015 WL 108415, at *3 (D.Del. Jan. 5, 2015) (citations omitted)(noting that other common bases for exceptionality include failing to conduct adequate pre-filing investigation or exercise due diligence before filing suit, a party knowing that its position was meritless, and bringing suit only to extract a settlement), report and recommendation adopted in part by 2015 WL 1197436 (D.Del. March 13, 2015).
The Plaintiffs argue Leviton Manufacturing acted in bad faith by: (i) filing suits against the plaintiffs in forums other
Leviton Manufacturing asserts that it did not act in bad faith, because "[i]nfringement is often difficult to determine, and a patentee's ultimately incorrect view of how a court will find does not of itself establish bad faith." ECB Response at 10 (quoting Brooks, 393 F.3d at 1381). Consequently, Leviton Manufacturing asserts that it did not act in bad faith to avoid the Court's jurisdiction because it believed "that since the patents in issue were excluded from the Settlement Agreement[,] the forum selection clause was not an issue." ECB Response at 3. Leviton Manufacturing asserts that it chose the Northern District of California, because it provided jurisdiction over all named parties, and filed in the ITC "for the unique relief available from that venue." ECB Response at 3.
Leviton Manufacturing did not act in bad faith, because it merely asserted a position based on legal interpretations that proved to be incorrect. The Plaintiffs contend that Leviton Manufacturing proceeded with its litigation while possessing documents which contradicted its position — namely, TransCore and the CSA. See Plaintiffs' Reply ECB at 6. The Plaintiffs compare this case to MarcTec, LLC v. Johnson & Johnson, 664 F.3d 907 (Fed. Cir.2012) ("MarcTec"), arguing that the Federal Circuit found the case to be exceptional, because there was "objective proof [showing] that the plaintiff was in possession of certain information that should have notified it that its case was baseless, but went forward with the case anyway." Plaintiffs' Reply ECB at 5-6.
This case is not that case. In MarcTec, the plaintiff alleged that the defendant infringed on a patent for a "surgical device for implantation in a body" which relied on the application of heat to render the device's polymeric material "flowable, tacky, and adherent." MarcTec, 664 F.3d at 911. The district court also found that the plaintiff's original patent application asserted that it was not a stent. See 664 F.3d at 912. The district court granted summary judgment in favor of the defendant, because, unlike the plaintiff's patent, the defendant's device was a stent and, moreover, did not require heat to bond its polymeric material — important differences that precluded infringement. See 664 F.3d at 913-14. The plaintiff appealed the summary
664 F.3d at 915 (quoting MarcTec, LLC v. Johnson & Johnson, No. CIV. 07-825 DRH, 2010 WL 680490, at *10 (S.D.Ill. Feb. 23, 2010)). The district court had excluded the plaintiff's expert testimony — which posited that the defendant's device actually relied on heat to bond — for being "unreliable and ... inadmissible," MarcTec, 664 F.3d at 913, stating:
MarcTec, LLC v. Johnson & Johnson, 638 F.Supp.2d 987, 1004 (S.D.Ill.2009). The district court also rejected the defendant's argument "that the use of heat at an earlier stage of the [defendant's] manufacturing process could satisfy the heat bonding limitations," because "the court found that use of heat at other stages of the process has no `bearing on whether the polymers are bonded to the device by the application of heat.'" MarcTec, 664 F.3d at 913 (quoting MarcTec, LLC v. Johnson & Johnson, 638 F.Supp.2d at 1006). Moreover, the district court noted that, because the inventor "represented to the [Patent and Trademark Office] that the claims exclude stents in order to obtain allowance, [the plaintiff] cannot turn around in litigation and assert the patents-in-suit against the [defendant's] stent." MarcTec, LLC v. Johnson & Johnson, 2010 WL 680490, at *9.
The Plaintiffs' contention that, like the plaintiff in MarcTec, Leviton Manufacturing possessed proof the argument it was furthering was baseless is unavailing. Leviton Manufacturing's fault was a matter of legal interpretation of the CSA and case precedent; the fact that Leviton Manufacturing possessed the documents that the Plaintiffs asserted, and the Court ultimately agreed, contradicted Leviton Manufacturing's position, is hardly a smoking gun that Leviton Manufacturing acted in bad faith by continuing to assert it. The question in MarcTec, after all, is clearer than the question in this case. What the Court sees in MarcTec is a plaintiff (i) insisting that a stent is not actually a stent, despite simple and clear proof to the contrary; and (ii) positing that the defendant's device employs heat to become bondable, either under improbable usage conditions or during the manufacturing stage, long before the device is actually used. See MarcTec, 664 F.3d at 913-14. The Court finds the MarcTec plaintiff's faulty arguments, which basic plain-language evidence and logistical common sense contradicted, to be far more baffling than Leviton Manufacturing's failure to
The Plaintiffs also argue for Leviton Manufacturing's bad faith in their comparisons to Interspiro, contending that "Leviton's assertion of infringement claims and counterclaims and its choice of forums were all unjustified and constituted the exercise of bad faith in implementing the Settlement Agreement. In Interspiro, similar bad faith led to a finding of exceptional case under section 285...." Plaintiffs' Exceptional Case Brief at 10. This comparison does not, however, tell the whole story of Interspiro. While it is true that, in Interspiro, as the Federal Circuit observed, the district court found that "the question of infringement was not close and that [the defendant] demonstrated bad faith in implementing the [settlement] agreement," Plaintiffs' Exceptional Case Brief at 10 (quoting Interspiro, 18 F.3d at 934) (internal quotation marks omitted), the Plaintiffs gloss over the additional facts that led the Interspiro court to make a finding of bad faith — namely, in ways other than merely positing a deficient argument regarding infringement. The district court wrote:
Interspiro, 815 F.Supp. at 1521 (emphasis added). In other words, when the Plaintiffs argue that Leviton Manufacturing's claims, counterclaims, and choice of forums "constituted an exercise of bad faith in implementing the Settlement Agreement," Exceptional Case Brief at 10, they attempt to draw a parallel with the Interspiro defendant's "bad faith in implementing the [settlement] agreement," when in fact the Interspiro defendant, unlike Leviton Manufacturing, undertook a slew of actions to impede or ignore the agreement beyond simply asserting an unsuccessful legal position regarding its meaning.
The Plaintiffs also assert that Leviton Manufacturing acted unreasonably — if not with bad faith — by "conduct[ing] its appeal in a vexatious manner, including an excessively aggressive strategy of seeking amici and culminating in seeking en banc review of the Federal Circuit's opinion," Plaintiffs' Reply ECB at 8, which "prolonged these proceedings unnecessarily at every stage, thereby increasing Plaintiff's fees and expenses," Plaintiffs' Reply ECB at 5. The Plaintiffs assert that, "[e]ven if Leviton had a good faith belief that the [CSA] did not cover the '124 and '151 patents, it knew, or should have known, that Plaintiffs would assert the [CSA] as a defense, thereby necessitating that Leviton's action be filed in this Court." Plaintiffs' Reply ECB at 2. The Plaintiffs argue that, "[w]hen viewed in isolation, it might appear that Leviton was merely exercising the options available to it under the governing rules ... [,][b]ut this court should... evaluate the overall pattern of Leviton's conduct in which it failed to heed the
Although the Court finds this case unexceptional, and thus an award of attorneys' fees inappropriate, it nonetheless addresses the reasonableness of the Plaintiffs' requested fees. The Court finds that: (i) the Plaintiffs' paralegal fees would have been recoverable under § 285 — at least insofar as the paralegals were performing non-clerical work; (ii) fees accrued by "litigation database analysts" would not be recoverable; (iii) fees relating to the trade-secret dispute would not have been recoverable; (iv) fees relating to an attorney's trip to China were excessive and would not have been recoverable; (v) having three attorneys attend depositions of one witness was excessive, and fees accrued by two of the attorneys would not have been recoverable; (vi) conversations about an interpreter were not excessive and would have been recoverable; (vii) attorneys' fees incurred, not only fees paid, would be recoverable; (viii) the Plaintiffs' attorneys' rates were reasonable; and (ix) the Court would not have adjusted the lodestar.
Fees that paralegals accrue are recoverable under § 285 to the extent they do not include clerical or secretarial work. As the Plaintiffs point out, see Plaintiffs' Reply ECB at 9, the Federal Circuit has ruled:
Cent. Soya Co. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1578 (Fed.Cir.1983) (emphases added) (citations omitted). This passage, read too literally, may appear to allow a prevailing party to recover all paralegal fees incurred while working on a patent case, regardless of the work that the paralegal performed. Most courts have not taken such a broad approach. For one, as a general matter, clerical work is not recoverable as attorneys' fees, even when an attorney performs the work. See Ysasi v. Brown, 2015 WL 403930, at *16 (D.N.M. Jan. 7, 2015) (Browning, J.)(citing
Eli Lilly & Co. v. Zenith Goldline Pharm., Inc., 264 F.Supp.2d at 776 (emphasis added) (quoting Spegon v. Catholic Bishop of Chi., 175 F.3d 544, 553 (7th Cir.1999)).
Leviton Manufacturing argues, however, that paralegal fees are recoverable only when the work is the kind that attorneys typically perform. See ECB Response at 20 (citing Allen v. U.S. Steel Corp. 665 F.2d 689, 697 (5th Cir.1982) ("Allen")(finding that paralegal expenses "are ... recoverable... only to the extent that the paralegal performs work traditionally done by an attorney"); Jean v. Nelson, 863 F.2d 759, 778 (11th Cir.1988)). While neither case Leviton Manufacturing cites are patent disputes — Allen concerned Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2, and Jean v. Nelson considered attorneys' fees under the Equal Access to Justice Act, 28 U.S.C. § 2412 — the distinction is of little consequence, as the phrase "work traditionally done by an attorney" contemplates much the same standard as found in Soya and Zenith. In any case, Allen and Jean are 1982 and 1988 cases, respectively. The Court does not agree that a paralegal has to do work an attorney does to be compensated. The whole point of hiring good paralegals is so that attorneys can handle the more complicated aspects of litigation — legal thinking, briefing, writing, and strategizing — rather than managing document control, organization, production, and privilege logs. Attorneys do not handle documents as they once did, because they no longer can handle the volume that cases today involve. Once upon a time — in a less technologically advanced atmosphere — attorneys could organize their own documents in getting a case through discovery and ready for trial, but most cases in federal courts — particularly patent cases — are too document-intensive and complex for a lawyer to manage his or her documents and get anything else done on the case. Moreover, when the Allen court invokes the "work traditionally done by an attorney" rule, it does so by citing a case from the United States District Court for the Eastern District of New York, which envisioned such work to include "digesting depositions, collating, marking and indexing exhibits, preparing and arranging for service of subpoenas, etc." Selzer v. Berkowitz, 477 F.Supp. 686, 691 n. 3 (E.D.N.Y.1979). If "collating ... exhibits" is work an attorney traditionally performs, then the Court finds it difficult to imagine a paralegal task too simplistic to negate a paralegal's expense. In any case, the specific tasks whose fees Leviton Manufacturing argues are unrecoverable — "creating databases, indexing documents and creating
As the Court is not awarding attorneys' fees in this case, it declines to sort through the hundreds of pages of the Plaintiffs' timesheets to test how many of the paralegal entries that Leviton Manufacturing identified as unrecoverable are "sufficiently complex to justify the efforts of a paralegal." Spegon v. Catholic Bishop of Chi., 175 F.3d at 553. Some tasks, of course, can more easily be classified as clerical rather than work requiring a paralegal's skills, such as printing court documents, see Ysasi v. Brown, 2015 WL 403930, at *41, or distributing documents around an office, Clawson v. Mountain Coal Co., No. CIV 01-02199 MSK-MEH, 2007 WL 4225578, at *8 (D.Colo. Nov. 28, 2007). The Court would have, for example, allowed recovery on fees accrued for "Drafting Notice of Briefing Complete; editing/cite check [plaintiffs'] reply and response brief," Annotated Time Entries #6 at 4, filed July 17, 2012 (Doc. 217-6); see Declaration of Shaun Snader ¶ 9, at 2 (executed July 16, 2012), filed July 16, 2012 (Doc. 216), and "Labeling product samples and preparing them for production and adding their images to production database," Annotated Time Entries #2 at 15, filed July 17, 2012 (Doc. 217-2). For vague entries, e.g., "Transcript for WFL," Annotated Time Entries #6 at 2, the Court might reduce those amounts, which would encourage parties to carefully consider — and clearly present — their fee requests.
The Court would also award attorneys' fees for work done by Litigation Database Analysts. The Plaintiffs argue these fees are recoverable for the same reason that the paralegal fees are recoverable: Soya provides that attorneys' fees include "those sums that the prevailing party incurs in the preparation for and performance of legal services related to the suit." Soya, 723 F.2d at 1578. While this principle may cover some costs that would not be otherwise recoverable as taxable costs under 28 U.S.C. § 1920, the law is less clear to what extent it covers wages that technical specialists accrue doing non-legal work. The only case the Court can find addressing this question comes from the United States District Court for the District of Maryland, and, coincidentally, involves a familiar face. In Leviton Manufacturing Co. v. Shanghai Meihao Electric, Inc., 613 F.Supp.2d 670 (D.Md.2009), vacated and remanded on other grounds sub nom. Leviton Manufacturing Co. v. Universal Security Instruments, Inc., 606 F.3d 1353 (Fed.Cir.2010), the district court considered whether to award attorneys' fees for work performed by a "litigation technology specialist[]" who "[p]roduce[d] client documents in electronic and paper format [and][c]reate[d] production database to track the history of the production." 613 F.Supp.2d at 737 (internal quotation marks omitted). The prevailing party argued doing so would be appropriate, because the specialist was "employed in order to ...
The Court is inclined, however, to go the other way: while technology specialists' duties are not strictly legal in the traditional sense, the Court believes that these technicians provide meaningful value to law firms and, ultimately, clients during litigation; those contributions should not go overlooked. In time past, young attorneys would select documents that paralegals would incorporate into specially created databases — e.g., "hot docs," "Top 100 documents," or documents specific to a particular witness or witnesses — and maintain them for the senior lawyers' review. As technology developed, however, paralegals began uploading documents into databases which could then be searched and sorted using queries. Now so much is on ESI; the technology specialist helps produce documents and keep documents produced by other parties. These technology specialists now do some of the specialized work that paralegals used to do. As Law Practice magazine noted:
Cynthia Thomas, The Changing Role of Legal Support Staff Technological Advancements Have Helped to Redefine Responsibilities for Legal Assistants/Paralegals & Legal Secretaries, Law Prac., January/February 2014, at 52, 53, available at: http://www.americanbar.org/publications/law_practice_magazine/2014/january-february/the-changing-role-of-legal-support-staff.html. There is no sound reason to pay paralegals for document work in the 1980s and 1990s, but not technology specialists doing similar work in 2015 just because their job titles are different. The specialist is improving the quality of work
The attorneys' fees that the Plaintiffs accrued relating to the trade-secret claim would not have been recoverable under § 285. "[F]ees are only awarded [under § 285] for work on non-patent issues if those issues are so intertwined with the patent issues that the evidence would be material to both types of issues." F.B. Leopold Co. v. Roberts Filter Mfg. Co., 119 F.3d 15, 1997 WL 378004 at *7 (Fed.Cir.1997). In dismissing Leviton Manufacturing's trade-secret dispute claim, see May 12, 2012 MOO at 32, the Court already determined that Leviton Manufacturing failed to "demonstrate[] that there is a common nucleus of operate fact between the patent dispute ... and the trade-secret dispute," May 12, 2012 MOO at 26. The Court added that, "[w]hile there may be an overarching dispute involving GPG's efforts to sell its products in competition with Leviton Manufacturing that relate to the products underlying the patent claims," Leviton Manufacturing failed to make that argument. May 12, 2012 MOO at 26. Here, the Plaintiffs appear to concede the issue as well, as their briefs make no mention of the trade-secret dispute. See Plaintiffs' Reply ECB passim. Accordingly, the Court would not have awarded the Plaintiffs attorneys' fees accrued for legal work relating to the trade-dispute claim, which Leviton Manufacturing calculates to be $30,929.00. See ECB Response at 20.
Leviton Manufacturing argues that much of the Plaintiffs' hours are excessive. See ECB Response at 21. Specifically, Leviton Manufacturing notes that the Plaintiffs request attorneys' fees for: (i) "having three attorneys present at single depositions"; (ii) sending "their lead counsel to travel to China and participate in a press conference"; and (iii) "extensive discussions between attorneys about selecting an appropriate interpreter." ECB Response at 21.
Leviton Manufacturing argues that requesting attorneys' fees for three attorneys to attend depositions of single witnesses is excessive. See ECB Response at 21. "Employing multiple attorneys or firms is per se not unreasonable. `Indeed, division of responsibility may make it necessary for more than one attorney to attend activities such as depositions and hearings.'" PSM Holding Corp. v. Nat'l Farm Fin. Corp., 743 F.Supp.2d 1136, 1157 (C.D.Cal.2010) (quoting Williamsburg Fair Housing Committee v. Ross-Rodney Housing Corp., 599 F.Supp. 509, 518 (S.D.N.Y.1984)). As a general matter, however, parties requesting fees must "make a good faith effort to exclude... hours that are excessive, redundant, or otherwise unnecessary." Hensley, 461 U.S. at 434, 103 S.Ct. 1933 (1983). Moreover, the United States Court of Appeals for the Eleventh Circuit wrote:
Am. Civil Liberties Union of Ga. v. Barnes, 168 F.3d 423, 432 (11th Cir.1999). The Plaintiffs' use of three attorneys at three different depositions may have been warranted, but here the Plaintiffs have made no argument for why three attorneys were necessary. While there may be good reason justifying the presence of three attorneys in a patent case such as this one, the Court should not have to make the argument for the Plaintiffs. Consequently, the Court would have found only fees for one of the three attorneys to be recoverable.
Leviton Manufacturing also questions the Plaintiffs' fee request for "their lead counsel to travel to China and participate in a press conference." ECB Response at 21. Leviton Manufacturing is apparently referring to the $1778.35 in travel expenses for "WFLONG" — presumably William F. Long, the Plaintiffs' lead counsel — for "9/11-15-2010 BEIJING, CHINA-ATTEND PRESS CONF. W/ GEN. PROTECHT GROUP, INC." Time Entries # 1 at 4, filed June 22, 2012 (Doc. 207-1) at 17; see Fort Decl. ¶ 11. The Court does not see why such a trip should be included within a calculation of reasonable attorneys' fees and indeed the Plaintiffs do not make a case for its inclusion. It may be that Mr. Long gave advice to his Chinese clients, intended to speak privately with them, or had to discuss legal issues at a press conference, but the Plaintiffs do not make that case. Consequently, the Court cannot presume to do the work of justifying the expense on behalf of the Plaintiffs. This request for $1,778.35 is
The Court would not find fees for interpreter-related discussion excessive. For one, the six entries that the Court identified on the pages cited by Leviton Manufacturing do not account for the Plaintiffs discussing the selection of an interpreter; rather, they appear to merely account for communications with the interpreter or logistical discussions regarding the interpreter. More importantly, discussions with or about the interpreter are, in each entry that the Court identified, listed among many other topics, and all of these entries are within the range of 1.5 to 3.8 hours. See Time Entries # 3 at 20-22, 24, 27, filed June 22, 2012 (Doc. 207-3).
While it is impossible to know how much time was devoted to translator discussions, it is not a stretch to presume they only took up a modest portion of it,
The Plaintiffs also argue they are entitled to fees incurred, not just fees they have already paid. This claim defies easy analysis not only because the Plaintiffs, in their briefs, do not specify which fees, if any, remained unpaid, but because, given the time between the brief and this opinion, whatever that figure used to be, it has presumably changed. Moreover, the Plaintiffs support this proposition by citing cases that are not perfectly on point. For instance, the Plaintiffs offer a quote from Automated Business Companies, Inc. v. NEC America, Inc., 202 F.3d 1353 (Fed. Cir.2000), which held that "courts should not be, and have not been, limited to reimbursement of only those amounts actually paid by the injured named party." 202 F.3d at 1356. This quote has been taken out of context somewhat, as it contemplates a situation in which an entity other than the actual party in the case covers some of the party's attorneys' fees, finding that the actual party is, nonetheless, entitled to all attorneys' fees. 202 F.3d at 1356-57. Next, the Plaintiffs cite Phillips v. General Services Administration, 924 F.2d 1577 (Fed.Cir.1991), which held that, under the fee-shifting provision of the Equal Access to Justice Act, 28 U.S.C. § 2412 (2011), the prevailing party is entitled to attorneys' fees it has not yet paid and only owed the attorney in the event they prevailed in the case. 924 F.2d at 1578. While not perfectly analogous, these cases point towards a general proposition that a prevailing party entitled to attorneys' fees is entitled to all attorneys' fees incurred, irrespective of whether it has paid them. Indeed, many § 285 cases refer to attorneys' fees incurred and not merely paid. See, e.g., Highmark, Inc. v. Allcare Health Mgmt. Sys., Inc., 687 F.3d 1300, 1310 (Fed.Cir.2012) ("The purpose of
The Court determines the "lodestar" figure by multiplying the hours that a party's attorneys reasonably spent on litigation by a reasonable rate. Bywaters v. United States, 670 F.3d at 1225-26. This lodestar figure "provides an objective basis on which to make an initial estimate of the value" of an attorney's services. Hensley, 461 U.S. at 433, 103 S.Ct. 1933. The party requesting attorneys' fees must submit evidence to support its representations of time spent and rates sought. See Hensley, 461 U.S. at 434, 103 S.Ct. 1933. If the evidence is inadequate, the district court may reduce the fee award. See Hensley, 461 U.S. at 434, 103 S.Ct. 1933. A district court may also make adjustments to the lodestar figure — up or down — to reflect a plaintiff's overall success level. See Bywaters v. United States, 670 F.3d at 1229 (citing Hensley, 461 U.S. at 435-36, 103 S.Ct. 1933). Leviton Manufacturing does not dispute the reasonableness of the Plaintiffs' rates,
The Court would have accepted the Plaintiffs' rates as reasonable. Courts commonly consider the "prevailing market rates in the relevant community" to determine a reasonable fee. Blum v. Stenson, 465 U.S. 886, 895, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984).
While hiring attorneys primarily in Atlanta, Georgia, may have been reasonable, evaluating the rate's reasonableness in light of the market in which the attorneys work is, however, not without its challenges, as the Court is not personally familiar with typical legal rates in the Atlanta market. The Court nevertheless is comfortable accepting these rates as reasonable, because: (i) the Plaintiffs agreed to these rates; and (ii) Leviton Manufacturing does not urge the Court to question them. See, e.g., Ysasi v. Brown, 2015 WL 403930, at *44 ("[B]ecause the Defendants do not object to Mr. Proctor's rate, and because Mr. Proctor used $267.03 per hour in his requested fee amount, the Court will apply $267.03 per hour in calculating Mr. Proctor's fees."). The Court is compelled to add, however, that the biographic information and work history of the Plaintiffs' attorneys provides, at best, incomplete assistance to determining the reasonableness of their rates. As the Supreme Court noted in Blum,
465 U.S. at 896 n. 11, 104 S.Ct. 1541. While the background information the Plaintiffs provided no doubt speaks to the attorneys' accomplishments and accolades, and leaves
The Plaintiffs' time sheets are sufficiently detailed. Parties requesting attorneys' fees must submit evidence to support their representations of time spent and rates sought. See Hensley, 461 U.S. at 434, 103 S.Ct. 1933. If the evidence is inadequate, the district court may reduce the fee award accordingly. See Hensley, 461 U.S. at 434, 103 S.Ct. 1933. The Plaintiffs have submitted extensive time sheets proving the name, rate, subject, and duration of each discrete instance of work. While these time sheets employ block billing, listing multiple activities within a discrete timeframe and making it difficult — if not impossible — to determine precisely how much time was spent on each specific activity, these records are nonetheless sufficiently detailed. See, e.g., United States ex rel. Belt Con Const., Inc. v. Metric Const., Inc., No. CIV 02-1398 JB/LAM, 2007 WL 5685140, at *10 (D.N.M.2007) (Browning, J.)(finding block billing time sheets adequately detailed to support an award of attorneys' fees).
The Court would not adjust the lodestar amount based solely on the Plaintiffs' degree of success. A district court may adjust the lodestar figure to reflect a plaintiff's overall success level. See Bywaters v. United States, 670 F.3d at 1229 (citing Hensley, 461 U.S. at 435-36, 103 S.Ct. 1933). Failure on some claims should not preclude full recovery if the plaintiff achieves success on a significant interrelated claim. See Hensley, 461 U.S. at 440, 103 S.Ct. 1933.
As mentioned above, the Court finds that the Plaintiffs are the "prevailing party" under 35 U.S.C. § 285, because: (i) the Court granted their requested injunction against Leviton Manufacturing, see Nov. 30, 2010 MOO at 2, which the Federal Circuit upheld on appeal, see General Protecht Group, 651 F.3d at 1366; and (ii) Leviton Manufacturing ultimately dismissed its patent infringement counterclaims against the Plaintiffs with prejudice, see May 12, 2012 MOO at 32. The Plaintiffs did not win on every count, but those counts on which they did not prevail do not support adjusting the lodestar downward. The Court dismissed the Plaintiffs' requests for declaratory judgment of non-infringement and invalidity of Leviton Manufacturing's '124 and '151 patents, but only at the Plaintiffs' request, pursuant to an agreement with Leviton Manufacturing following the Federal Circuit's ruling; Leviton Manufacturing, in turn, agreed to request that the Court dismiss its infringement
While courts can adjust the lodestar amount upwards for a party's overall success, see Bywaters v. United States, 670 F.3d at 1229 (citing Hensley, 461 U.S. at 435-36, 103 S.Ct. 1933), the Court would have declined to do so in this case. First, enhancements are to be awarded only in rare or exceptional circumstances, Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 554, 130 S.Ct. 1662, 176 L.Ed.2d 494 (2010), and "the burden of proving that an enhancement is necessary must be borne by the fee applicant," 559 U.S. at 543, 130 S.Ct. 1662. Here, the Plaintiffs merely assert that they "achieved an excellent result from the litigation, defeating Leviton at every stage, despite Leviton's scorched earth tactics." Plaintiffs' Reply ECB at 7. While the Plaintiffs unquestionably performed ably during this litigation, the Court does not believe prevailing at every stage is sufficient basis, on its own, for an upward adjustment of the lodestar.
J. Mills, D. Reiley & R. Highley, 3 Patent Law Fundamentals § 15:8 (2d ed.2004).
Harper v. Va. Dep't of Taxation, 509 U.S. 86, 97, 113 S.Ct. 2510, 125 L.Ed.2d 74 (1993).
Precision Links Inc. v. USA Prods. Grp., Inc., 2014 WL 2861759, at *3 n. 1.
Clawson v. Mountain Coal Co., 2007 WL 4225578, at *9 (citations omitted).
Time Entries at 21 (emphasis added).
Blum, 465 U.S. at 896 n. 11, 104 S.Ct. 1541.
