THOMAS W. THRASH, Jr., District Judge.
This is a patent infringement action. It is before the Court on the Defendants' Motion for Attorneys' Fees and Expenses [Doc. 299]. For the reasons set forth below, the Court DENIES the Defendants' motion.
The Plaintiff, CBT Flint Partners, LLC ("CBT"), owns United States Patent No. 6,192,114 ("the `114 Patent") and United States Patent No. 6,587,550 ("the `550 Patent"). (Compl. at 4-5.) The patents are directed to a method for filtering unsolicited and unwanted email, or "spam." The patented method requires e-mail senders who are not on an "authorization list" to pay a fee to have their email messages delivered.
On August 1, 2007, CBT sued Return Path, Inc. and Cisco IronPort Systems LLC, alleging that the Defendants' Bonded Sender Program infringed CBT's `114 and `550 Patents. The litigation turned on two central issues. First, the parties disputed the construction of certain terms in the `114 Patent. On July 10, 2008, the Court entered an order construing the term "authorization list" and the phrase "a list of authorized sending parties associated with the intended receiving party" as "a list of authorized sending parties that have been selected by an intended receiving party" [Doc. 202]. Similarly, the Court construed the phrase "unauthorized sending party" as "a sending party who is not on the authorization list" [
The parties also disputed whether a typographical error in the `550 Patent affected the validity of the patent. In relevant part, claim 13 of the `550 Patent reads: "the computer [is] programmed to detect analyze the electronic mail communication sent by the sending party . . ." [Doc. 280-3, Ex. B]. The issue before the Court was whether the intended meaning of "detect analyze" was "subject to reasonable debate." On July 10, 2008, the Court held that the phrase was subject to at least three interpretations and granted summary judgment to the Defendants on the grounds that claim 13 was invalid for indefiniteness [Doc. 203]. The Plaintiff appealed this ruling.
On October 16, 2008, the Defendants moved for attorney fees and expenses under 35 U.S.C. § 285 and 28 U.S.C. § 1927 [Docs. 217 & 218]. On December 30, 2009, the Court denied the Defendants' motions, finding that although the litigation was objectively baseless, there was insufficient evidence of CBT's bad faith [Doc. 258] (the "December 30th Order"). The Plaintiff appealed this ruling.
On August 12, 2011, the Federal Circuit reversed this Court's July 10th ruling, finding that the term "detect analyze" was not susceptible to multiple meanings and thus not void for vagueness.
Finally, on May 14, 2012, the Defendants filed this Motion for Attorneys' Fees and Expenses [Doc. 299]. The Defendants claim that in the December 30th Order, the Court applied an overly stringent standard for attorney's fees and expenses under 35 U.S.C. § 285. Specifically, the Defendants contend that they need not provide direct evidence of subjective bad faith.
The Patent Act provides that: "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." 35 U.S.C. § 285. The determination of whether a case is eligible for an award of attorney fees is a two-step process.
"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."
The court may also award reasonable attorney fees pursuant to 28 U.S.C. § 1927, which provides that "[a]ny attorney . . . who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct." 28 U.S.C. § 1927. "[B]ad faith is the touchstone" for an award of attorney fees under § 1927.
Likewise, the court may award attorney fees pursuant to its inherent power where a party has "acted in bad faith, vexatiously, wantonly, or for oppressive reasons."
The Defendants claim they are entitled to attorney fees under 35 U.S.C. § 285. As discussed above, on December 30, 2009, the Court denied the Defendants' Motion for Attorney Fees, finding insufficient evidence bad faith [
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Thus, contrary to the Defendants' assertions, MarcTec does not eliminate the subjective bad requirement under § 285. Indeed, "[r]egardless of the district court's description of the law," the
The Defendants also argue that the Plaintiff's claims with respect to the `550 Patent justify finding an exceptional case. As discussed above, on August 12, 2011, the Federal Circuit reversed this Court's July 11, 2008 ruling, finding that claim 13 of the `550 Patent was not invalid for vagueness. Thus, CBT's original argument that the `550 Patent is valid was not objectively baseless. On remand, however, the Defendants again moved for summary judgment, arguing that the allegedly infringing computers did not designate "authorized sending parties" as defined by the `550 Patent. The Plaintiff contended that "authorized sending parties" included any parties paying a fee that would allow, but might not guarantee, email delivery. The Defendants now assert that the Plaintiff's argument was objectively baseless.
Although ultimately unpersuasive, CBT's interpretation of claim 13 of the `550 Patent was not objectively baseless. As discussed in the Court's April 27th Order [Doc. 296], the `550 Patent claims only those computers that guarantee email delivery in exchange for an advertising fee. Specifically, the `550 Patent states that the advertising fee is paid "in return for allowing an electronic mail communication" to be forwarded [
In patent litigation, the correct claim construction "is often difficult to determine" because "the issues are often complex and the resolutions not always predictable."
The Defendants also seek attorney fees under 28 U.S.C. § 1927. That statute provides that "[a]ny attorney who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct." 28 U.S.C. § 1927. "[B]ad faith is the touchstone" for an award of attorney fees under § 1927.
In the December 30th Order, the Court noted that the lack of bad faith did not justify attorney fees with respect to CBT's litigation conduct up to that point [see Doc. 258, at 9]. As discussed above, the Defendants have not provided evidence that CBT knew its claims were frivolous.
With respect to CBT's litigation conduct after the December 30th Order, the Court likewise finds no bad faith sufficient to justify an award under § 1927. After the December 30th Order, CBT successfully appealed this Court's ruling with respect to claim 13 of the `550 Patent. CBT then agreed to an expedited briefing schedule [
For the reasons set forth above, the Court DENIES the Defendants' Motion for Attorneys' Fees and Expenses [Doc. 299].
SO ORDERED.