Netlist, Inc v. Smart Modular Technologies, Inc

Filing 513

ORDER by Judge Yvonne Gonzalez Rogers denying 469 Diablo's Motion for Attorney's Fees (fs, COURT STAFF) (Filed on 9/1/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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Northern District of California

United States District Court

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NETLIST, INC.,
Plaintiff,
vs.

Case No.: 13-cv-5962 YGR
ORDER DENYING DIABLO’S MOTION FOR
ATTORNEY’S FEES
(DKT. NO. 469)

DIABLO TECHNOLOGIES, INC.,
Defendant.

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Defendant Diablo Technologies, Inc. (“Diablo”) brings its Motion for Attorney’s Fees

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pursuant to Federal Rule of Civil Procedure 54(d)(2), Civil L.R. 54-5, and 35 U.S.C. § 285. (Dkt.

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No. 469) Specifically, Diablo moves for an award of attorneys’ fees incurred in its defense against

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Plaintiff’s claim for correction of inventorship of a patent, under the “exceptional case” provision.

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Diablo seeks a total of $493,125 for that portion of the case only.

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The Patent Act provides that “[t]he court in exceptional cases may award reasonable attorney

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fees to the prevailing party.” 35 U.S.C. § 285. An “‘exceptional case’ is simply one that stands out

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from others with respect to the substantive strength of a party’s litigating position (considering both

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the governing law and the facts of the case) or the unreasonable manner in which the case was

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litigated.” Octane Fitness, LLC v. ICON Health & Fitness, Inc., __ U.S. __, 134 S. Ct. 1749, 1756

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(2014). The determination of what is “exceptional” is a made in exercise of the court’s discretion

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taking into account the totality of the circumstances. Id. The court considers such factors as

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evidence of bad faith litigation, objectively unreasonable positions, or improper conduct either before

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the Patent and Trademark Office or the court. Id. at 1756-57. In short, attorneys’ fees under 35

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U.S.C. section 285 are awarded “in the rare case in which a party’s unreasonable conduct—while not

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necessarily independently sanctionable—is nonetheless so ‘exceptional’ as to justify an award of

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fees.” Id. at 1757.
Diablo contends that the inventorship claim is such an exceptional case because the record

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herein demonstrates that Plaintiff Netlist, Inc. (“Netlist”) never had an adequate basis for bringing

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the correction of inventorship claim. Netlist brought a claim alleging that Dr. Hyun Lee and Thomas

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Bryan were the inventors of the ‘917 patent. Diablo argues that they never introduced any evidence

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to support Bryan’s inventorship, and the evidence from Dr. Lee indicated that he had not read the

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‘917 patent in detail. Moreover, the standards applicable to a claim for correction of inventorship

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require more evidence than just the alleged inventor’s testimony. Price v. Symsek, 988 F.2d 1187,

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United States District Court
Northern District of California

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1194 (Fed. Cir. 1993); see also Singh v. Brake, 222 F.3d 1362, 1367 (Fed. Cir. 2000). Diablo argues

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that Netlist’s failure to present any corroborating evidence demonstrates that it had no good faith

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basis for the claim.

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Taking into account the totality of the circumstances and evidence presented, the Court does

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not find that attorneys’ fees are warranted under the exceptional case rule. While Netlist’s evidence

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failed to persuade the jury that Dr. Lee was an inventor on the ‘917 patent, both Dr. Lee and Netlist’s

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expert, Ken Jansen, offered testimony about Dr. Lee’s contribution to several of the ‘917 patent’s

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claims. Netlist also presented a February 3, 2009 memo by Dr. Lee. (Trial Exh. 80.) Dr. Lee and

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Mr. Jansen testified that several of the parameters discussed in that memo were subsequently added

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to the patent application and final ‘917 patent. (Trial Tr. 645:7-9 [Lee]; Trial Tr. 1221:1-1225:10

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[Jansen].) Diablo’s own witnesses testified to meetings with Dr. Lee to discuss specifications that

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were ultimately contained in the ‘917 patent. (Trial Tr. 1509:21-1515:15 1579:1-6, 1582:22-25,

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1600:18-1603:21 [Amer].) The jury’s decision indicates that, after being presented with all the

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evidence, they believed that Dr. Lee’s recommendations during those meetings were rejected by

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Diablo’s engineers, and that he made no contributions to the ‘917 patent’s claims. However, an

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adverse determination by the jury, standing alone, is not a basis for finding exceptional

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circumstances.

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The Court therefore finds that Netlist’s position was not objectively unreasonable. The claim

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for correction of inventorship does not present the “rare” case warranting an award of attorneys’ fees.

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II.

CONCLUSION

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For the foregoing reasons, Diablo’s Motion for Attorneys’ Fees is DENIED.

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This Order terminates Dkt. No. 469.

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IT IS SO ORDERED.
Date: September 1, 2015
____________________________________
YVONNE GONZALEZ ROGERS
UNITED STATES DISTRICT COURT JUDGE

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United States District Court
Northern District of California

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