Brilliant Instruments, Inc. v. GuideTech, Inc.
Filing
197
ORDER by Judge Claudia Wilken denying 147 Motion for Attorney Fees and Non-Taxable Costs. (hlkS, COURT STAFF) (Filed on 9/28/2012)
1
IN THE UNITED STATES DISTRICT COURT
2
FOR THE NORTHERN DISTRICT OF CALIFORNIA
3
4
BRILLIANT INSTRUMENTS, INC.,
5
6
7
8
9
United States District Court
For the Northern District of California
10
No. C 09-5517 CW
Plaintiff,
ORDER DENYING
BRILLIANT’S MOTION
FOR ATTORNEYS’
FEES AND NONTAXABLE COSTS
v.
GUIDETECH, INC.,
Defendant.
________________________________
AND ALL RELATED COUNTERCLAIMS
11
/
12
Plaintiff and Counterclaim-Defendant Brilliant Instruments,
13
Inc. moves for an award of attorneys’ fees pursuant to 28 U.S.C.
14
§ 285, and an award of expert witness fees pursuant to the Court’s
15
inherent authority.
16
formerly GuideTech Inc., opposes the motion.
17
forth below, Brilliant’s motion is denied.
For the reasons set
BACKGROUND
18
19
Defendant and Counter-Claimant GuideTech LLC,
In 1998, Shalom Kattan founded Guide Technology, Inc., the
20
predecessor entity to GuideTech.
21
claimed by the patents-in-suit, which he assigned to Guide
22
Technology.
23
Technology, but remained on its board of directors.
24
year, Kattan established Brilliant.
25
position on Guide Technology’s board.
26
Technology sold its assets, which included the patents-in-suit, to
27
Ronen Sigura, who founded GuideTech.
28
Kattan invented the technology
In 2004, Kattan left his employment with Guide
That same
In 2005, Kattan left his
On May 23, 2008, Guide
1
Brilliant filed this declaratory relief action on November
2
20, 2009, alleging that its accused products, such as the BI200
3
and BI220, do not infringe GuideTech’s U.S. Patent Nos. 6,091,671
4
(’671 patent); 6,181,649 (’649 patent); 6,226,231 (’231 patent);
5
6,456,959; 6,621,767; 6,999,382; and 7,203,610.
6
suit concern time interval analyzers, which are testing
7
instruments used in the semiconductor industry to detect timing
8
errors in integrated circuits.
9
filed its answer and counterclaim, asserting that Brilliant’s
The patents-in-
On December 14, 2009, GuideTech
United States District Court
For the Northern District of California
10
products infringe the ’671, ’649 and ’231 patents.
11
filed a motion to strike the background section of GuideTech’s
12
counterclaim, which the Court denied by order entered March 24,
13
2010.
14
counterclaim and a counterclaim for a declaratory judgment of
15
invalidity of the asserted patents.
16
amended its complaint to add GuideTech’s president, Ronen Sigura,
17
as a Defendant, charging him with intentional interference with
18
prospective economic advantage, intentional interference with
19
contractual relations and violation of California’s Unfair
20
Competition Law, Cal. Bus. Code §§ 17200, et seq.
21
Brilliant
On April 7, 2010, Brilliant filed an answer to GuideTech’s
On June 3, 2010, Brilliant
On November 12, 2010, GuideTech filed a complaint in Santa
22
Clara County Superior Court alleging claims for tortious
23
interference with prospective economic advantage and slander
24
against Brilliant and Kattan and breach of contract against
25
Kattan.
26
On December 13, 2010, Brilliant removed the state court action,
27
and it was related to the instant action by order entered January
28
18, 2011.
GuideTech filed an amended complaint on December 8, 2010.
See GuideTech LLC v. Brilliant Instruments, Inc., et
2
1
al., Case No. C10-5669 CW.
2
which the Court granted by order entered March 14, 2011.
3
Court also granted GuideTech’s motion for attorneys’ fees incurred
4
as a result of the improper removal.
5
GuideTech filed a motion to remand,
The
The Court referred the case to a Magistrate Judge for
resolution of all discovery disputes.
7
discovery hearings on January 11, 2011, to resolve Brilliant’s
8
motion to compel production of documents, and on January 13, 2011,
9
to resolve the parties’ dispute over GuideTech’s objections to
10
United States District Court
For the Northern District of California
6
questions posed by Brilliant at the deposition of Oren Rajuan,
11
GuideTech’s president.
12
January 28, 2011, Brilliant filed a motion to compel concerning
13
the parties’ dispute over GuideTech’s privilege-based objections,
14
then withdrew the motion on February 25, 2011.
15
The Magistrate Judge held
On the last day to file discovery motions,
On December 30, 2010, GuideTech filed a motion for leave to
16
amend its infringement contentions, which the Court granted by
17
order entered January 3, 2011.
18
moved to strike prior art references from Brilliant’s expert
19
report on the ground that they were not disclosed in Brilliant’s
20
invalidity contentions.
21
GuideTech’s motion to strike references from Dr. Kaliski’s report
22
to the extent that they were relied upon as prior art that
23
allegedly anticipated the claims asserted in this action or
24
rendered such claims obvious.
25
On February 10, 2011, GuideTech
On March 15, 2011, the Court granted
Docket no. 85.
On March 16, 2011, Brilliant filed a motion to amend its
26
preliminary invalidity contentions to add a prior art reference.
27
Brilliant also filed a motion for leave to file a Daubert motion
28
to exclude the reports and testimony of GuideTech’s expert
3
1
witness, Dr. West, on April 16, 2011, fifteen days after the
2
deadline adopted by the Court.
3
order entered April 29, 2011.
The Court denied both motions by
The parties sought the Court’s construction of the disputed
4
5
claim terms used in the ’671, ’649 and ’231 patents.
Brilliant
6
also moved for summary judgment of non-infringement of the
7
patents-in-suit.
8
adjudication on the equitable issue of assignor estoppel.
GuideTech filed a motion for summary
By order entered August 11, 2011, the Court construed the
9
United States District Court
For the Northern District of California
10
disputed claim terms, granted Brilliant’s motion for summary
11
judgment of non-infringement, and denied as moot GuideTech’s
12
motion for summary adjudication on the issue of assignor estoppel.
13
Docket no. 137.
On August 16, 2011, the parties stipulated to dismissal of
14
15
Brilliant’s state law claims in this action without prejudice and
16
agreed to consolidate their state law claims in the action in
17
Santa Clara County Superior Court.
Docket no. 139.
On September 20, 2011, Brilliant filed the instant motion for
18
19
attorneys’ fees.
20
briefed and submitted on the papers.
21
GuideTech filed an appeal to the Federal Circuit from the order
22
and judgment entered by the Court in favor of Brilliant.
23
appeal is currently pending.
26
27
On October 4, 2011,
The
DISCUSSION
24
25
GuideTech opposes the motion, which is fully
I.
Brilliant’s Motion for Award of Attorneys’ Fees for
Exceptional Case
In patent infringement actions, courts “may award reasonable
attorney fees to the prevailing party” in “exceptional cases.”
28
4
35
1
U.S.C. § 285.
GuideTech does not dispute that Brilliant was the
2
prevailing party on its non-infringement claims in this action,
3
but contends that Brilliant is not entitled to fees related to
4
claims on which it did not prevail.
5
all attorneys’ fees incurred in this proceeding, not only fees
6
related to non-infringement, in the amount of $834,678.60.
7
Brilliant’s fee request thus includes fees incurred in the removal
8
of GuideTech’s state court action, which the Court remanded, and
9
in litigating its own business interference claims which have been
Brilliant seeks an award of
United States District Court
For the Northern District of California
10
dismissed from this action and consolidated in the state court
11
action.
12
the record does not support an exceptional case finding, it is not
13
necessary to determine whether to award fees incurred for the
14
entire litigation or only for part of it.
15
Instruments, Inc. v. LKB Produkter AB, 892 F.2d 1547, 1553 (Fed.
16
Cir. 1989) (recognizing that the litigation misconduct would not
17
justify an award of attorney fees for the entire litigation and
18
remanding § 285 award of fees to consider extent to which party
19
actually prevailed).
20
Reply at 2-3 and n.1.
Because the Court determines that
Cf. Beckman
To determine whether attorneys’ fees are warranted, a court
21
undertakes a two-step process: (1) the court considers whether
22
clear and convincing evidence supports a finding that a case is
23
exceptional and, if so, (2) the court then decides whether it
24
should exercise its discretion to award attorneys’ fees.
25
Wedgetail Ltd. v. Huddleston Deluxe, Inc., 576 F.3d 1302, 1304
26
(Fed. Cir. 2009).
27
court must consider “the totality of the circumstances.”
In evaluating whether a case is exceptional, a
28
5
1
Yamanouchi Pharm. Co. Ltd. v. Danbury Pharmacal, Inc., 231 F.3d
2
1339, 1347 (Fed. Cir. 2000).
3
A.
Exceptionality
4
“A case may be deemed exceptional when there has been some
5
material inappropriate conduct related to the matter in
6
litigation, such as willful infringement, fraud or inequitable
7
conduct in procuring the patent, misconduct during litigation,
8
vexatious or unjustified litigation, conduct that violates Fed. R.
9
Civ. P. 11, or like infractions.”
Brooks Furniture Mfg., Inc. v.
United States District Court
For the Northern District of California
10
Dutailier Int’l, Inc., 393 F.3d 1378, 1381 (Fed. Cir. 2005).
11
“Absent misconduct in conduct of the litigation or in securing the
12
patent, sanctions may be imposed against the patentee only if both
13
(1) the litigation is brought in subjective bad faith, and (2) the
14
litigation is objectively baseless.”
15
Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc.,
16
508 U.S. 49, 60-61 (1993); Forest Labs., Inc. v. Abbott Labs., 339
17
F.3d 1324, 1329-31 (Fed. Cir. 2003)).
18
Id. (citing Professional
There is a presumption that the assertion of infringement of
19
a duly granted patent is made in good faith.
Id. (citing Springs
20
Window Fashions LP v. Novo Industries, L.P., 323 F.3d 989, 999
21
(Fed. Cir. 2003)).
22
unreasonable in terms of § 285 if the infringement can reasonably
23
be disputed.
24
patentee’s ultimately incorrect view of how a court will find does
25
not of itself establish bad faith.’”
26
631 F.3d 1372, 1377 (Fed. Cir. 2011) (quoting Brooks Furniture,
27
393 F.3d at 1384).
28
[patentee’s] case must have no objective foundation, and the
6
“An infringement action ‘does not become
Infringement is often difficult to determine, and a
iLOR, LLC v. Google, Inc.,
“Under this exacting standard, the
1
[patentee] must actually know this.
Both the objective and
2
subjective prongs of Brooks Furniture ‘must be established by
3
clear and convincing evidence.’”
4
at 1304).
Id. (citing Wedgetail, 576 F.3d
5
Here, Brilliant seeks an award of attorneys’ fees for an
6
exceptional case on the grounds that GuideTech failed to perform a
7
reasonable pre-filing investigation before filing its infringement
8
counterclaim and engaged in other litigation misconduct.
9
discussed below, the Court finds that Brilliant has not
As
United States District Court
For the Northern District of California
10
established by clear and convincing evidence that this case is
11
exceptional under § 285 so as to warrant an award of attorneys’
12
fees.
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
B.
Objective Baselessness and Subjective Bad Faith
Requirements
Before making a discretionary determination whether to award
fees pursuant to § 285, the Court must find subjective bad faith
and objective baselessness to find this case exceptional.
Furniture, 393 F.3d at 1381.
Brooks
The Federal Circuit has articulated
that “[t]he objective baselessness standard for enhanced damages
and attorneys’ fees against a non-prevailing plaintiff under
Brooks Furniture is identical to the objective recklessness
standard for enhanced damages and attorneys’ fees against an
accused infringer for § 284 willful infringement actions under In
re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en
banc).”
iLOR, 631 F.3d at 1377.
In Seagate, the court held that
“‘to establish willful infringement, a patentee must show by clear
and convincing evidence that the infringer acted despite an
objectively high likelihood that its actions constituted
28
7
1
infringement of a valid patent. . . .
2
accused infringer is not relevant to this objective inquiry.’”
3
Id. (quoting Seagate, 497 F.3d at 1371) (emphasis added in
4
original)).
5
The court in iLOR stated,
Under both Brooks Furniture and Seagate, objective
baselessness “does not depend on the plaintiff's
state of mind at the time the action was commenced,
but rather requires an objective assessment of the
merits.” [Citation omitted.] State of mind is
irrelevant to the objective baselessness inquiry.
[Citations omitted.]
6
7
8
9
The state of mind of the
iLOR, 631 F.3d at 1377-78 (citing Brooks Furniture, 393 F.3d at
United States District Court
For the Northern District of California
10
1382; Seagate, 497 F.3d at 1371).
11
baselessness is to be determined by the record made in the
12
infringement proceedings.
13
A finding of objective
Id. at 1380.
Applying the objective baselessness test to GuideTech’s
14
unsuccessful infringement claims, the Court determines that
15
GuideTech’s position on claim construction was not “so
16
unreasonable that no reasonable litigant could believe it would
17
succeed.”
18
Sdn. Bhd. v. OSRAM GmbH, 524 F.3d 1254, 1260 (Fed. Cir. 2008)).
19
Having construed the disputed claim terms and decided Brilliant’s
20
motion for summary judgment of non-infringement, after holding a
21
hearing on the matters, and being familiar with the record, the
22
Court finds that this action presented a “routine question of
23
claim construction in which the issues are often complex and the
24
resolutions not always predictable.”
25
undertook construction of five disputed claim terms and phrases,
26
in particular, the phrase “defined within a signal channel” from
27
the abstract of the ’231 patent.
28
Construction, Granting Brilliant’s Motion for Summary Judgment at
8
iLOR, 631 F.3d at 1378 (citing Dominant Semiconductors
Id. at 1379.
The Court
See Aug. 11, 2011 Order on Claim
1
6-8.
The Court found that Brilliant’s proposed construction was
2
more accurate because it captured the notion that measurement
3
circuits are contained within a particular signal channel, whereas
4
GuideTech’s proposed construction was too broad and would capture
5
an embodiment that has a measurement circuit that was present in
6
more than one channel, which the Court determined was not
7
supported by the claim language or specification.
8
The Court therefore construed the phrase to mean “contained within
9
a signal channel.”
Id. at 8.
Id. at 7-8.
Having so construed the disputed
United States District Court
For the Northern District of California
10
phrase, the Court found that the accused products did not infringe
11
the ’231 patent.
12
terms of the ’671 and ’649 patents and granted Brilliant’s motion
13
for summary judgment of non-infringement as to those patents.
14
Id. at 15-17.
The Court also construed claim
Although the Court rejected GuideTech’s proposed
15
construction, GuideTech’s infringement claims were grounded in a
16
reasonable interpretation of the patents and are not deemed
17
baseless in hindsight.
18
where patent disputes present difficult issues of claim
19
construction, “simply being wrong about claim construction should
20
not subject a party to sanctions where the construction is not
21
objectively baseless.”
22
23
24
25
26
27
The Federal Circuit has recognized that
iLOR, 631 F.3d at 1380.
Claim interpretation is not always an exact
science, and it is not unusual for parties to offer
competing definitions of even the simplest claim
language. In this case, however, it is not for us
to determine whether [plaintiff's] pre-filing
interpretation of the asserted claims was correct,
but only whether it was frivolous. We conclude that
it was not, for [plaintiff's] claim interpretation,
while broad, followed the standard canons of claim
construction and was reasonably supported by the
intrinsic record.
28
9
1
Q–Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295, 1301 (Fed.
2
Cir. 2004) (affirming denial of Rule 11 sanctions where pre-filing
3
infringement analysis was supported by a sufficient evidentiary
4
basis).
5
claims were not objectively baseless, it is not necessary to reach
6
the issue of subjective bad faith.
7
Because the Court concludes that GuideTech’s infringement
See iLOR, 631 F.3d at 1378.
Brilliant does not address the question of whether
8
GuideTech’s infringement claims were objectively baseless, based
9
on the record made in the infringement proceedings.
Rather,
United States District Court
For the Northern District of California
10
Brilliant’s exceptional case motion focuses on the reasonableness
11
of GuideTech investigation before filing its infringement claims.
12
“A claim is brought in subjective bad faith if the objective
13
unreasonableness of the claim ‘was either known or so obvious that
14
it should have been known’ by the patentee.”
15
Allcare Health Mgmt. Sys., Inc., 687 F.3d 1300, 1312 (Fed. Cir.
16
2012) (citing Seagate, 497 F.3d at 1371).
17
against an attorney may form a basis for an exceptional case
18
finding[, b]ut the absence of Rule 11 sanctions does not mandate
19
the opposite conclusion.”
20
393 F.3d at 1381).
Highmark, Inc. v.
“Rule 11 sanctions
Id. at 1313 (citing Brooks Furniture,
21
Although Brilliant has not brought a Rule 11 motion, it
22
contends that the Court should determine whether GuideTech’s pre-
23
filing infringement investigation was inadequate under Rule 11
24
standards to find this to be an exceptional case.
25
citing Judin v. United States, 110 F.3d 780, 784-85 (Fed. Cir.
26
1997) (Rule 11 requires a patentee and its attorney to compare the
27
accused devices with the patent claim prior to filing the
28
infringement claims).
Mot. at 5-6,
As the Federal Circuit has made clear,
10
1
however, where the Court has determined that the infringement
2
claims were not objectively baseless, the Court need not reach the
3
subjective question whether GuideTech acted in bad faith.
4
Highmark, 687 F.3d at 1315.
5
C.
Litigation Misconduct
6
As a separate ground for seeking an award of fees pursuant to
7
§ 285, Brilliant contends that this case is exceptional because
8
GuideTech engaged in litigation efforts to complicate the case
9
through motion practice and discovery tactics.
“Litigation
United States District Court
For the Northern District of California
10
misconduct and unprofessional behavior are relevant to the award
11
of attorney fees, and may suffice to make a case exceptional.”
12
Taltech Ltd. v. Esquel Enters. Ltd., 604 F.3d 1324, 1329 (Fed.
13
Cir. 2010) (citation and internal quotation marks omitted).
14
Having reviewed the litigation history of this action, including
15
the discovery disputes raised before the Magistrate Judge, the
16
Court concludes that both parties aggressively litigated this
17
patent dispute.
18
convincing evidence that GuideTech engaged in abusive litigation
19
tactics.
Brilliant has not demonstrated by clear and
20
Brilliant further contends that GuideTech intimidated
21
Brilliant’s customers into refusing to buy Brilliant’s competing
22
products, and that this misconduct supports an award of fees
23
pursuant to § 285.
24
these allegations are the subject of business tort claims being
25
litigated in state court.
26
allegations of tortious interference are properly before the state
27
court and are not relevant to a finding of misconduct in this
28
proceeding.
Mot. at 20-21.
As Brilliant acknowledges,
Reply at 14.
11
The merits of Brilliant’s
1
On this record, Brilliant has not met its burden to show by
2
clear and convincing evidence that GuideTech pursued objectively
3
baseless infringement counterclaims against Brilliant or engaged
4
in abusive litigation tactics.
5
attorneys’ fees pursuant to § 285 is therefore denied.
6
II.
Brilliant’s motion for an award of
Motion for Expert Fees
Brilliant also seeks an award of its expert witness fees in
7
8
the amount of $69,552.86, pursuant to the Court’s inherent
9
sanction authority.
Because § 285 does not authorize an award of
United States District Court
For the Northern District of California
10
expert witness fees, reimbursement of expert witness fees is
11
governed by the general cost statute, 28 U.S.C. § 1920, and is
12
limited by § 1821(b) governing witness attendance fees.
13
Industries Inc. v. Buckeye Steel Castings Co., 23 F.3d 374, 376–77
14
(Fed. Cir. 1994).
15
impose sanctions in the form of a reasonable expert fee award when
16
a party has “acted in bad faith, vexatiously, wantonly, or for
17
oppressive reasons.”
18
501 U.S. 32, 45–46 (1991)).
19
trial court must make a finding of fraud or abuse of the judicial
20
process before invoking its inherent sanctioning power to impose
21
expert witness fees in excess of the § 1821(b) cap.
22
F.3d at 378.
23
GuideTech has engaged in fraud or abusive litigation conduct,
24
sanctions are not warranted against GuideTech.
25
for award of expert fees is therefore denied.
26
\\
27
\\
Amsted
Federal courts have the inherent power to
Id. at 378 (citing Chambers v. NASCO, Inc.,
See also iLOR, 631 F.3d at 1380.
A
Amsted, 23
Because Brilliant has not demonstrated that
28
12
Brilliant’s motion
CONCLUSION
1
2
For the foregoing reasons, the Court DENIES Brilliant’s
3
motion for an award of attorneys’ fees and expert fees, Docket No.
4
147.
5
IT IS SO ORDERED.
6
7
8
Dated: September 28, 2012
CLAUDIA WILKEN
United States District Judge
9
United States District Court
For the Northern District of California
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
13
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?