MMI Incorporated v. Rich Godfrey & Associates Incorporated et al

Filing 115

ORDER denying 97 Motion for Attorney Fees. Signed by Judge Steven P Logan on 6/13/2018. (TCA)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Plaintiff,
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vs.
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Rich Godfrey & Associates Incorporated, )
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et al.,
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Defendants.
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MMI Incorporated,

No. CV-15-00449-PHX-SPL
ORDER

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Before the Court is Defendant Rich Godfrey & Associates, Inc.’s Motion for

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Award of Attorneys’ Fees and Related Non-Taxable Costs (the “Motion”) (Doc. 97) The

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Motion is fully briefed, and the Plaintiff requested oral argument. For the reasons that

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follow, the Motion will be denied.

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I.

Background

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On March 12, 2015, the Plaintiff filed this lawsuit against several parties,

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including the Defendant, claiming patent infringement, breach of contract and fraud,

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among other causes of action. (Doc. 52) Multiple defendants moved for partial summary

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judgment on their counterclaim of invalidity, and the Court granted the motion on

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September 29, 2017. (Doc. 91) The Court’s order granting partial summary judgement

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dismissed the Plaintiff’s complaint in its entirety and terminated the case. The Defendant

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timely filed this Motion for attorneys’ fees on October 27, 2017.

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II.

Standard of Review

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Federal Rule of Civil Procedure 54(d) provides “[u]nless a federal statute, these

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rules, or a court order provides otherwise, costs—other than attorney’s fees—should be

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allowed to the prevailing party.” Fed. R. Civ. P. 54. The Defendant brings the Motion for

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an award of attorneys’ fees pursuant to 35 U.S.C. § 285, under which a court may award

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reasonable attorneys’ fees to a prevailing party in “exceptional cases.” 35 U.S.C. § 285

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An “exceptional” case is simply one that stands out from others with respect to the

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substantive strength of a party’s litigating position (considering both the governing law

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and the facts of the case) or the unreasonable manner in which the case was litigated.

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Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 (2014).

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District courts may determine whether a case is “exceptional” in the case-by-case

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exercise of their discretion, considering the totality of the circumstances. Id. Merely

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losing on a motion for summary judgment is not a basis for an exceptional case finding,

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and the movant seeking attorneys’ fees in patent litigation must prove its entitlement to

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fees by a preponderance of evidence. Cambrian Sci. Corp. v. Cox Commcn’s, Inc., 79 F.

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Supp. 3d 1111, 1114–1115 (C.D. Cal. 2015) (quoting Octane Fitness in stating that if so,

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every party prevailing on summary judgment would be entitled to attorneys’ fees—a

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result inconsistent with the Supreme Court’s holding that an exceptional case “stands out

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from others.”)

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III.

Analysis

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Pursuant to 35 U.S.C. § 285, the Defendant requests an award of $91,812.00 for

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attorneys’ fees and non-taxable expenses (not including the fees incurred in preparing the

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Motion, which have also been requested in an undetermined amount). (Doc. 97 at 15)

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The Plaintiff does not contest that the Defendant is a prevailing party as required by 35

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U.S.C. § 285. In fact, the Defendant’s partial motion for summary judgment was granted,

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and the Plaintiff’s complaint was dismissed in its entirety. (Doc. 91) Therefore, the Court

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finds that the Defendant was the prevailing party for the purpose of considering an award
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of attorneys’ fees, and the Court will focus its analysis on whether the Defendant has

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proven that this case is so exceptional as to warrant an award of attorneys’ fees.

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The first prong of the Octane Fitness test requires the Court to review whether this

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case “stands out” from other cases due to the substantive strength of the Plaintiff’s

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litigating position, considering both the governing law and the facts of the case. Octane

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Fitness, 134 S. Ct. at 1756. To this point, the Defendant argues that the Plaintiff’s

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litigating position was meritless due to evidence exchanged between the parties during

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discovery, which the Defendant argues fully demonstrated the invalidity of the Plaintiff’s

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patent. (Doc. 97 at 9) The Plaintiff argues that this case is not exceptional within the

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meaning of 35 U.S.C. § 285. (Doc. 112 at 7)

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The Court finds that the strength of the Plaintiff’s litigating position was not so

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weak as to classify this case as exceptional by the Octane Fitness standard. While the

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Plaintiff argued the validity of its patent in a losing effort, this Court does not find that its

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conduct or position in bringing the claims at issue were meritless or have risen to the

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level of misconduct. It is undisputed that the 2006 DB-30 minibike was based off of the

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Plaintiff’s design. (Doc. 91 at 7) However, the Plaintiff was free to disagree with the

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information exchanged between the parties during discovery and the Defendant’s

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interpretation of the validity of the patent. Furthermore, it is the Plaintiff’s position that

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another court had already identified some merit to the Plaintiff’s argument that the

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asymmetrical components of the ‘203 design distinguished it from the 2006 DB-30

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minibike design. (Doc. 112 at 9) In weighing whether the ‘203 Patent was anticipated by

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the 2006 DB-30 minibike design, the Court necessarily reviewed each party’s depictions

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of the minibikes to compare and contrast their features. (Doc. 91 at 6–11) The Court’s

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finding that the bikes were “nearly identical” was not a foregone conclusion, and the

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Plaintiff’s arguments for the stylistic differences between the minibikes were not

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baseless. (Doc. 91 at 11) Accordingly, the Court finds the Plaintiff’s litigating position

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was not meritless, although not strong enough to survive a motion for summary

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judgment.
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The second prong of the Octane Fitness test requires the Court to consider

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whether the case was litigated in an unreasonable manner. Octane Fitness, 134 S. Ct. at

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1756. On this point, the Defendant argues that the Plaintiff’s decision to file this case,

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the Plaintiff’s opinion of the scope of its ‘203 patent, and the aggressiveness with which

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the Plaintiff litigated its case rises to the level of unreasonable litigation conduct. (Doc.

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97 at 11) The Court disagrees. The Plaintiff’s opposition to the need for a Markman

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hearing did not rise to the level of unreasonableness. Furthermore, there is no evidence

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before the Court that the Plaintiff’s litigation tactics were predatory or that the Plaintiff

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engaged in conduct worthy of sanctions. Again, the Plaintiff was free to disagree with

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the Defendant’s position on the validity of the patent and with the Defendant’s theory of

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the case.

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preponderance of the evidence that the Plaintiff litigated its case in an unreasonable

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manner.

Therefore, the Court finds that the Defendant has not proven by a

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IV.

Conclusion

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For the foregoing reasons, the Court concludes that the Defendant failed to

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establish that this case is one of those “rare case[s]” that should be deemed “exceptional.”

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Octane Fitness, 134 S. Ct. at 1757. This Court finds that the “substantive strength” of the

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Plaintiff’s litigating position and its litigation conduct did not rise to a level that causes

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this case to “stand out” when considered in light of the totality of the circumstances. The

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Court will exercise its considerable discretion not to award attorneys’ fees to the

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Defendant under 35 U.S.C. § 285.

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Accordingly,

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IT IS ORDERED that the Defendant’s Motion is denied.

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Dated this 13th day of June, 2018.

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Honorable Steven P. Logan
United States District Judge

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