Thermolife International, LLC v. Myogenix Corp. et al

Filing 282

ORDER (1) Striking Plaintiffs' Late-Filed Declaration And (2) Granting Defendants' 246 , 253 Motion for Attorney Fees. It is ordered that the Court concludes that under the totality of the circumstances defendants have shown that this case is exceptional such that an award of attorney fees is justified. In particular, plaintiffs' pre-filing investigation was severely lacking, thus resulting in frivolous claims and the objective unreasonableness of certain infringement con tentions; plaintiffs' motivation was seemingly to extract nuisance-value settlements from a large number of defendants; and awarding fees here will advance compensation- and deterrence- oriented goals. The Court therefore grants defendants' motions for attorney fees. Signed by Judge Janis L. Sammartino on 4/4/2017. (All non-registered users served via U.S. Mail Service)(dxj)

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1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 SOUTHERN DISTRICT OF CALIFORNIA 8 9 10 THERMOLIFE INTERNATIONAL, LLC, Plaintiff, 11 12 13 Case No.: 13cv651 JLS (MDD) (LEAD CASE) ORDER (1) STRIKING PLAINTIFFS’ LATE-FILED DECLARATION AND (2) GRANTING DEFENDANTS’ MOTION FOR ATTORNEY FEES v. MYOGENIX CORP. et al., Defendants. 14 (ECF Nos. 246, 253) 15 16 17 AND ALL RELATED CASES. 18 19 Presently before the Court is Defendant Vital Pharmaceuticals, Inc.’s Motion for 20 Attorneys’ Fees (“Vital Mot.”), (ECF No. 246, see also ECF No. 257), Defendant Hi-Tech 21 Pharmaceuticals, Inc.’s Motion for Attorneys’ Fees (“Hi-Tech Mot.”), (ECF No. 253), 22 Plaintiffs The Board of Trustees of the Leland Stanford Junior University’s and Thermolife 23 International, LLC’s Opposition to the Motion for Attorneys’ Fees of Defendants Vital 24 Pharmaceuticals, Inc. and Hi-Tech Pharmaceuticals, Inc. (“Pls.’ Opp’n”), (ECF No. 267), 25 Defendant Vital Pharmaceuticals, Inc.’s Reply in Response to Plaintiffs’ Opposition to 26 Motion for Attorneys’ Fees (“Vital Reply”), (ECF No. 270), and Defendant Hi-Tech 27 Pharmaceuticals, Inc.’s Reply in Support of Its Motion for Attorneys’ Fees (“Hi-Tech 28 Reply”), (ECF No. 271). 1 13cv651 JLS (MDD) (LEAD CASE) 1 This matter came before the Court for oral argument on February 9, 2017. (ECF No. 2 278.) At that time, the Court permitted Plaintiffs to file a second, late-filed Declaration in 3 Support of Plaintiffs’ Opposition, and also permitted Defendants the opportunity to file a 4 Response. (See id.) Both parties have now so filed, and therefore also presently before the 5 Court are Plaintiffs’ late-filed Declaration in Support of Plaintiffs’ Opposition to the 6 Motions for Attorneys’ Fees (“Suppl. Decl.”), (ECF No. 280), and Defendants’ Joint 7 Response to the Late Declaration (“Decl. Resp.”), (ECF No. 279). After considering the Parties’ arguments and the law, the Court STRIKES the late- 8 9 filed Declaration and GRANTS Defendants’ Motions for Attorney Fees. 10 BACKGROUND 11 Beginning in March 2013, Plaintiffs filed eighty-one related patent infringement 12 lawsuits in this Court, including the instant case regarding Defendants Vital and Hi-Tech. 13 (Vital Mot. 2:1–2.) The Court bifurcated the proceedings for purposes of invalidity, 14 enforceability, and infringement and, with the consent of the parties, consolidated these 15 actions up to and including trial on the invalidity of the patents in suit. (Mem. Decision and 16 Order 2:14–16, ECF No. 245.) Vital, Hi-Tech, and GNC1 proceeded to the invalidity trial 17 phase, and after a five-day trial in August, the Court concluded that (1) claim 1 of the ’459 18 Patent was invalid as anticipated; (2) claims 1, 4, 5, 7, 8, and 10 of the ’872 Patent were 19 invalid as obvious; (3) claims 1, 2, 3, 4, 5, 8, and 14 of the ’006 Patent were invalid as 20 obvious; and (4) claims 1, 2, and 6 of the ’916 Patent were invalid as obvious. (Id. at 46:10– 21 13.) In short, on September 29, 2016, the Court found that all patents-in-suit were invalid, 22 thereby concluding the litigation. 23 Subsequently, Defendants Vital Pharmaceuticals, Inc. (“Vital”) and Hi-Tech 24 Pharmaceuticals, Inc. (“Hi-Tech”) separately moved for attorney fees against Plaintiffs The 25 Board of Trustees of the Leland Stanford Junior University and ThermoLife International, 26 LLC (collectively “Plaintiffs”). Both Vital and Hi-Tech base their claims on 35 U.S.C. 27 28 1 GNC did not move for attorney fees even though it prevailed at trial. 2 13cv651 JLS (MDD) (LEAD CASE) 1 § 285, which enables the Court to award attorney fees in “exceptional cases.” (See 2 generally Vital Mot.; Hi-Tech Mot.) Although both Vital and Hi-Tech argue that this case 3 should be classified as “exceptional,”—and therefore each defendant should be awarded 4 attorney fees—for generally the same reasons,2 each defendant presents additional 5 arguments based on its own, specific products. 6 Initially, the Court vacated the hearing and took the Fee Motions under submission 7 without oral argument pursuant to Civil Local Rule 7.1(d). (ECF No. 274.) However, three 8 days later, Hi-Tech filed a Motion for Oral Argument; Vital consented to the Motion and 9 Plaintiffs opposed. (See ECF No. 275.) The Court granted Hi-Tech’s Motion and held oral 10 argument on the pending Fee Motions on February 9, 2017 at 2:30 p.m. (See ECF No. 276.) 11 At the end of oral argument, Plaintiffs argued that Defendants presented—both in their 12 Reply briefing and at oral argument—new lines of argument regarding their Motions for 13 Attorney fees such that Plaintiffs should have a chance to submit a formal declaration in 14 Response. (See ECF No. 278.) Defendants strongly objected; however, the Court 15 tentatively permitted (1) Plaintiffs to file a supplemental declaration, and (2) Defendants 16 to file a response both explaining more fully their position as to why the late-filed 17 declaration should not be considered and responding to the substance of the declaration. 18 Given these circumstances, the Court first addresses the late-filed Supplemental 19 Declaration, and then moves to the substance of Defendants’ Motions for Attorney Fees. 20 THE LATE-FILED SUPPLEMENTAL DECLARATION 21 At the February 9, 2017, oral argument—after the Court had made its tentative ruling 22 and after Plaintiffs, Defendant Vital, and Defendant Hi-Tech had each orally argued the 23 points they thought relevant to the dispute—Plaintiffs requested permission to file a 24 supplemental declaration setting forth additional information about Plaintiffs’ Counsel’s 25 26 27 28 Hi-Tech states in Section I of its Motion that “[t]he arguments and authorities contained in [Vital’s] Memorandum of Points and Authorities in Support of its Motion for Attorney Fees . . . are equally applicable to Hi-Tech.” (Hi-Tech Mot. 1:14–16.) Further, Hi-Tech “adopts all statements of fact and evidence cited in Vital’s Brief, except those pertaining to Vital’s accused products.” (Id. at 1:19–20.) 2 3 13cv651 JLS (MDD) (LEAD CASE) 1 pre-filing investigation. In particular, Defendant Hi-Tech during its forty-five-page 2 presentation at oral argument several times specifically pointed to Plaintiffs’ Counsel’s 3 inadequate pre-filing investigation, and thus Plaintiffs sought leave to file a supplemental 4 declaration addressing that discrete issue. Defendants objected to the request, arguing that 5 any supplemental declaration would be untimely and unduly prejudicial. To allow all 6 parties to be fully heard on the request, the Court tentatively permitted Plaintiffs to file the 7 Supplemental Declaration, but also allowed Defendants to file a Response in part more 8 fully setting forth their arguments as to why the Court should not consider the 9 Supplemental Declaration. Defendants’ arguments in the subsequently filed Declaration 10 Response now convince the Court that Plaintiffs’ Supplemental Declaration should be 11 stricken. 12 As an initial matter, Plaintiffs at the time of their Opposition filing were 13 unquestionably on notice that the adequacy of their pre-filing investigation was a central 14 issue. (E.g., Vital Mot. 1 (entire factual section entitled “ThermoLife’s Lack of Pre-Filling 15 Investigation and Its Deficient Allegations”), 10 (entire analytical section entitled, in part, 16 “ThermoLife’s Failure to Conduct a Diligent Pre-Filing Investigation”).) And the adequacy 17 of any pre-filing investigation necessarily implicates a plaintiff’s counsel; an attorney may 18 not blindly accept her client’s statements or contentions but instead must conduct an 19 independent investigation of the same. See generally, e.g., Federal Rule of Civil Procedure 20 11(b); (see also, e.g., Vital Mot. 12 (explicitly citing and discussing a case where “[t]he 21 Federal Circuit found that the inquiry into [the defendant’s] infringement performed by 22 [the plaintiff’s] counsel was not reasonable under Rule 11” (emphasis added))). Therefore, 23 Plaintiffs should have responded in their Opposition to any deficiencies in Plaintiffs’ 24 Counsel’s pre-filing investigation, especially given that Plaintiffs did, in fact, respond to 25 the pre-filing–investigation argument generally. (Pls.’ Opp’n 3 (entire section entitled, in 26 part, “Plaintiffs’ Pre-Filing Infringement Investigation Was More Than Adequate”)); 27 Ultra-Temp Corp. v. Advanced Vacuum Sys., Inc., 194 F.R.D. 378, 383 (D. Mass. 2000) 28 (“A litigant is under an obligation to present all relevant, material, non-cumulative 4 13cv651 JLS (MDD) (LEAD CASE) 1 evidence on point when opposing a motion.”). But Plaintiffs did not produce in their 2 Opposition any evidence of their Counsel’s pre-filing investigation. Nor did Plaintiffs after 3 Defendants filed their Replies move the Court to file a Sur-Reply or a Supplemental 4 Declaration. Then, when Defendant Hi-Tech requested oral argument on the Fee Motions 5 Plaintiffs objected to the request. (Mot. for Oral Arg. On Hi-Tech Pharmaceuticals, Inc.’s 6 Mot. for Att’y’s Fees and Expenses 2, ECF No. 275.) It was only at oral argument, after 7 all parties had already been given an opportunity to present any arguments they wished, 8 that Plaintiffs requested permission to file the Supplemental Declaration here at issue. And 9 to now consider the extensive Declaration when Plaintiffs “failed to present this evidence 10 to the district court in opposition to the motion for summary judgment, either in [their] 11 written briefs and affidavits or at the . . . hearing,” United States v. Kitsap Physicians Serv., 12 314 F.3d 995, 999 (9th Cir. 2002), is simultaneously inappropriate and “unfair” both “to 13 the movant” and “[o]ther litigants [who] could have that judicial time,” Carmen v. S.F. 14 Unified School Dist., 237 F.3d 1026, 1030–31 (9th Cir. 2001). See S.D. Cal. L.R. 15 7.1(f)(3)(b) (explaining that a party’s “opposition must contain a brief and complete 16 statement of all reasons in opposition to the position taken by the movant” (emphases 17 added)). 18 Further, Plaintiffs’ Supplemental Declaration includes far more information (and 19 even argument) than simply facts regarding Plaintiffs’ Counsel’s pre-filing investigation. 20 For instance, the Supplemental Declaration has a Section devoted to addressing “Counsel’s 21 Involvement in ThermoLife’s Licensing the Patents” at issue in this case. (Suppl. Decl. 22 ¶¶ 7–8.) This information perhaps addresses Defendants’ characterization of Plaintiff 23 ThermoLife as a “patent troll”—another aspect of Defendants’ Fee Motions—but does not 24 speak at all to Counsel’s pre-filing investigation. The Supplemental Declaration also 25 exceeds the Court-permitted scope by addressing post-filing conduct. (Id. ¶¶ 14 (explaining 26 infringement “analyses were revised, added to, and modified over time, including after the 27 claim construction hearing in this matter”), 15 (discussing process of offering sublicenses 28 after “product analyses were complete,” including to parties who “were contacted only 5 13cv651 JLS (MDD) (LEAD CASE) 1 after litigations were filed but before they were served with the Complaint”).) And the 2 Supplemental Declaration also exceeds the Court-permitted scope by arguing—for the first 3 time—that in pre-filing Counsel “and ThermoLife” focused on the supposedly “key 4 aspect[]” of “whether the advertising and labels disclosed the requisite intent of ‘improving 5 vascular NO activity of the vascular system of a human host by enhancing endothelial 6 NO[,]’ ” and that therefore “[p]roduct testing would not have been of assistance in finding 7 such intent.” (Id. ¶ 16 (emphases added).) 8 Defendants correctly respond that these additional statements and arguments will be 9 unfairly prejudicial because they are “incompetent and incomplete.” (Decl. Resp. 9.) 10 Specifically, Defendants have had no discovery regarding these recently added statements 11 and arguments, some of which appear to directly conflict with the evidence previously 12 before the Court. (Compare Suppl. Decl. ¶ 11, with Kramer Dep. 133:4–134:24, ECF No. 13 246.) And the Supplemental Declaration seems to selectively waive attorney-client 14 privilege, (e.g., Suppl. Decl. ¶¶ 7, 11–14), thus likely making Counsel’s general 15 investigation “including any statements made by witnesses to that attorney . . . 16 discoverable.” Grochocinski v. Mayer Brown Rowe & Maw LLP, 251 F.R.D. 316, 325 17 (N.D. Ill. 2008). 18 Given the foregoing, the Court agrees with Defendants that Plaintiffs’ Supplemental 19 Declaration is inexcusably untimely, addresses issues and advances arguments well beyond 20 the scope of Counsel’s pre-filing investigation, and unduly prejudices Defendants for many 21 unjustifiable reasons. The Court therefore STRIKES Plaintiffs’ Supplemental Declaration. 22 THE MOTIONS FOR ATTORNEY FEES 23 I. Legal Standard 24 Under 35 U.S.C. § 285, the court “in exceptional cases may award reasonable 25 attorneys’ fees to the prevailing party” in a patent infringement lawsuit. The Supreme Court 26 recently construed this language in Octane Fitness, LLC v. ICO Health & Fitness, Inc., 134 27 S.Ct. 1749, 1756 (2014). Specifically, the Octane Court rejected the Federal Circuit’s prior 28 interpretation of the “exceptional case” language, that a case was “exceptional” only “when 6 13cv651 JLS (MDD) (LEAD CASE) 1 there has been some material inappropriate conduct related to the matter in litigation, such 2 as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct 3 during litigation, vexatious or unjustified litigation.” Id. at 1754 (citing Brooks Furniture 4 Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378, 1381 (Fed. Cir. 2005)). According to the 5 Federal Circuit’s pre-Octane, Brooks Furniture articulation, fees could “be imposed 6 against the patentee only if both (1) the litigation [wa]s brought in subjective bad faith, and 7 (2) the litigation [wa]s objectively baseless.” Id. (emphasis added). However, the Octane 8 Court rejected this “rigid and mechanical formulation” because the Brooks Furniture 9 method “impermissibly encumber[ed] the statutory grant of discretion to district courts.” 10 Id. at 1754, 1755. Octane established a more flexible approach: “a district court may award 11 fees in the rare case in which a party’s unreasonable conduct—while not necessarily 12 independently sanctionable—is nonetheless so ‘exceptional’ as to justify an award of fees.” 13 Id. at 1757. 14 Under the new analysis, a case may warrant a fee award if the litigation is brought 15 in subjective bad faith, or if the litigation is objectively baseless—both are no longer 16 required. Id. In particular, a case is “exceptional” when it “stands out from others with 17 respect to the substantive strength of a party’s litigating position (considering both the 18 governing law and the facts of the case) or the unreasonable manner in which the case was 19 litigated.” Id. at 1756. District courts “may determine whether a case is ‘exceptional’ in the 20 case-by-case exercise of their discretion, considering the totality of the circumstances.” Id. 21 To guide its discretion, a court may consider a non-exclusive list of factors, including: 22 “frivolousness, motivation, objective unreasonableness (both in the factual and legal 23 components of the case) and the need in particular circumstances to advance considerations 24 of compensation and deterrence.” Id. at n.6 (citing Fogerty v. Fantasy, Inc., 510 U.S. 517, 25 534 n.19 (1994)). 26 Additionally, Octane rejected the former requirement that patent litigants establish 27 their entitlements to attorney fees by “clear and convincing evidence” in favor of a lower, 28 preponderance of the evidence standard. Id. at 1758. 7 13cv651 JLS (MDD) (LEAD CASE) 1 Finally, Octane does not mandate attorney-fee awards in all exceptional cases; i.e., 2 even if a court determines that a case is “exceptional,” the court still has discretion to deny 3 attorneys’ fees. See Ion Health & Fitness, Inc. v. Octane Fitness, LLC, Nos. 2011–1521, 4 2011–1636, 2014 WL 4194609, at *3 (Fed. Cir. 2014) (“The Supreme Court’s decision in 5 Octane did not, however, revoke the discretion of a district court to deny fee awards even 6 in exceptional cases.”); see also S.C. Johnson & Son, Inc. v. Carter-Wallace, Inc., 781 F.2d 7 198, 201 (Fed. Cir. 1986) (“Even an exceptional case does not require in all circumstances 8 the award of attorney fees.”). 9 II. Analysis 10 Defendants both generally argue that this case is “exceptional” due to the fact that 11 Plaintiffs (1) lacked a reasonable basis to allege infringement; and (2) pursued a file-and- 12 settle strategy typical of “patent trolls” while simultaneously engaging in “questionable 13 litigation conduct.” (Vital Mot. 10–18; see also Hi-Tech Mot. 2–12.) Plaintiffs respond that 14 their pre-filing investigation “was more than adequate” and that Defendants’ Motions 15 effectively ask the Court to impermissibly make a post-trial non-infringement 16 determination. The Court discusses each of Defendants’ arguments in turn, addressing 17 Plaintiffs’ counterarguments where relevant. 18 A. Whether Plaintiffs Lacked a Reasonable Basis to Allege Infringement 19 Vital’s most extensive argument in support of this case qualifying as “exceptional” 20 is that Plaintiffs failed to sufficiently investigate before filing their claims against 21 Defendants, and therefore Plaintiffs lacked a reasonable basis to assert infringement against 22 Vital. However, this argument requires the Court to (at least cursorily) engage in 23 infringement analysis, something Defendants argue is a “premature and purely speculative 24 approach [that] should be rejected outright . . . .” (Pls.’ Opp’n 4–5.) Accordingly, the Court 25 first addresses this threshold issue. 26 Plaintiffs cite two cases in support their argument, (1) Computer Software 27 Protection, LLC v. Adobe Systems Inc., No. CV 12-451-SLR, 2015 WL 1517402 (D. Del. 28 Mar. 31, 2015), and (2) EON Corp. IP Holdings, LLC v. FLO TV Inc., No. CV 10-8128 13cv651 JLS (MDD) (LEAD CASE) 1 RGA, 2014 WL 2196418 (D. Del. May 27, 2014). However, the Court does not find these 2 cases persuasive. As an initial matter, the Computer Software Court did, at least in part, 3 consider issues particular to the litigation that were never-before resolved by the Court, 4 ultimately holding that “to characterize these circumstances as exceptional is exceptionally 5 presumptuous . . . .” 2015 WL 1517402, at *2. Further, the Computer Software Court in 6 part noted that “frankly, the court is not inclined to address the merits of these defenses as 7 though the cases had not been dismissed, a monumental waste of judicial resources in the 8 context of a discretionary paradigm.” Id. at *2 n.5. But here, on the facts of this particular 9 case, the Court cannot agree that it would be a waste of time to analyze an issue that might 10 prove useful to the Court’s exercise of discretion. And Plaintiffs citation to Eon Corp. fares 11 no better. Although in Eon Corp. the Court determined that because of the case’s prior 12 bifurcation the “[a]rguments by both sides regarding the size of the potential recovery are 13 speculative and cannot form the basis for an award of attorney’s fees,” the question 14 presented in the instant case is instead a purely non-speculative legal one—whether 15 Plaintiffs conducted any reasonable pre-filing inquiry whatsoever regarding infringement. 16 Accordingly, the Court does not find Computer Software or Eon Corp. sufficiently 17 persuasive to constrain the Court’s discretion in the present case. See Lumen View Tech., 18 LLC v., Inc., 24 F. Supp. 3d 329, 336 (S.D.N.Y. 2014) (awarding fees 19 despite the plaintiff’s arguments that “the abbreviated nature of this litigation provides an 20 inadequate record to find that the case is exceptional[;]” specifically, that a “lack of a claim 21 construction opinion by the Court” signaled “there [wa]s not sufficient evidence to find . . . 22 [the relevant] infringement claim . . . unreasonable”), aff’d, 811 F.3d 479 (Fed. Cir. 2016); 23 Gust, Inc. v. AlphaCap Ventures, LLC, No. 15cv6192 (DLC), 2016 WL 7165983, at *9 24 (S.D.N.Y. Dec. 8, 2016). (“That [the plaintiff] was able to thwart [the defendants’] efforts 25 to obtain a formal declaration of invalidity does not prove the potential validity of the 26 Patents, nor does it disprove the exceptionality of this case under § 285.”). The Court thus 27 turns to Defendants’ arguments regarding Plaintiffs’ inadequate pre-filing investigation. 28 /// 9 13cv651 JLS (MDD) (LEAD CASE) 1 Defendants argue that (1) Plaintiffs accused certain Defendants’ products of 2 infringing despite the fact that those products’ labels explicitly reveal an absence of the 3 ingredient required for the products to infringe;3 (2) with respect to the Defendants’ 4 products that did contain the infringing ingredient, Plaintiffs should have conducted a 5 “simple test” to reveal that the products have “far less than the [required] amount” for 6 infringement; and (3) with respect to the Defendants’ products accused of infringing the 7 ’459 patent, Plaintiffs should have discovered by viewing the products’ labels that those 8 products contained an additional ingredient rendering the product incapable of 9 infringement.4 (Vital Mot. 10–14; see Hi-Tech Mot. 3–8.) Plaintiffs respond that “testing 10 is not required” and that they “compared the asserted claims with the accused products 11 . . . .” (Pls.’ Opp’n 3–18 (emphasis removed).) 12 Defendants are correct that Federal Circuit “case law makes clear that the key factor 13 in determining whether a patentee performed a reasonable pre-filing inquiry is the presence 14 of an infringement analysis.” Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295, 1302 15 (Fed. Cir. 2004). And while Plaintiffs in turn are correct that Q-Pharma indicates testing 16 is not necessarily required, see id., the Q-Pharma Court so held in part because in that case 17 “Q-Pharma acquired a sample of the [allegedly infringing product] and reviewed its 18 advertising and labeling[,]” id. See also id. (“In Judin, we concluded that the district court 19 abused its discretion in not awarding sanctions because the patentee had not attempted to 20 obtain a sample of the accused product and had not compared the accused device with the 21 patent claims prior to filing suit. . . . . Here, in contrast, Q-Pharma did obtain a sample of 22 the Curél® CoQ10 lotion and compared that product with the asserted claims of the ’373 23 24 25 26 27 28 3 Under this theory, both Defendants suggest that Plaintiffs would have known these certain products were non-infringing if Plaintiffs had simply read the products’ labels. (Vital Mot. 12; Hi-Tech Mot. 3–7.) Specifically, Vital argues that although Claim 1 of the ’459 patent requires administration of L-arginine or L-arginine hydrochloride “in the absence of other amino acids and polypeptides as other than dietary supplements,” two of its accused products’ (NO Shotgun and NO Synthesize) labels clearly list a number of amino acids as ingredients. Accordingly, Vital argues that had Plaintiffs simply viewed the ingredient list they would have discovered that these products cannot infringe. (Vital Mot. 13; see also Hi-Tech Mot. 6–8.) 4 10 13cv651 JLS (MDD) (LEAD CASE) 1 patent.”). However, Plaintiffs in the present case nowhere indicate that they relied on 2 anything other than advertisements before bringing suit. (See generally Pls.’ Opp’n.) And 3 to the extent they stand behind Thermolife Executive Ron Kramer’s earlier statement that 4 to determine whether a product infringed they would look at advertisements and whether 5 “the [product] label had certain doses of arginine in the product,” (Kramer Dep. 133:15– 6 16, ECF No. 246-6), Defendants correctly point out that either the statement is incorrect, 7 or, “[a]lternatively, Kramer’s testimony was accurate; ThermoLife determined that various 8 . . . products did not meet the 1-gram threshold by reviewing the labels, and it filed suit 9 anyway[,]” (Hi-Tech Mot. 4). Further, all the relevant products were publicly available, 10 (see id. at 2), and it would have been extremely easy for Plaintiffs to examine their labels. 11 Accordingly, if Defendants are correct that the relevant product labels disclose necessarily 12 non-infringing amounts of ingredients, then this weighs strongly in favor of this case being 13 exceptional. 14 However, Plaintiffs argue that it is a “false assertion that claim 1 of patent ’459 15 specifically requires a dose of 1 gram of arginine.” (Pls.’ Opp’n 7.) Specifically, Plaintiffs 16 contend that Plaintiffs’ expert’s statement at trial regarding arginine dosage was “never 17 about what was required for infringement” but instead “was discussing what was learned 18 after the issuance of the patent.” (Id. (emphases removed).) And to analyze Defendants’ 19 infringement contentions would require “extensive discovery . . . to be taken, as the non- 20 infringement positions Defendants assert, without any expert testimony, are wholly 21 unsupported.” (Id. at 9.) The Court is unconvinced by Plaintiffs’ arguments. 22 Plaintiffs’ own expert, both prior to and at trial, noted that less than gram of arginine 23 would not enhance NO production as required by the ’459 patent (Vital Mot. Ex. I (“Trial 24 Tr.”), 459:14–461:5, ECF No. 246-11; Vital Mot. Ex. H (“Boger Dep.”), 252:3–253:25, 25 ECF No. 246-10 (“Q: You said . . . 1 gram was ineffective; is that correct? A: 1 gram and 26 below was ineffective; Q: According to studies?; A: Yes.”). That the claim language does 27 not explicitly embrace the one-gram metric does not obviate that the claim explicitly 28 requires administration of L-arginine in an amount sufficient to enhance nitric oxide 11 13cv651 JLS (MDD) (LEAD CASE) 1 production, and that—at least as early as 1993—studies showed that one gram was 2 insufficient to enhance such production. (See Trial Tr. 460:11–461:7.) Accordingly, 3 Plaintiffs should have been aware of this limitation. See Rohm & Haas Co. v. Brotech 4 Corp., 127 F.3d 1089, 1093 (Fed. Cir. 1997) (noting in Rule-11 context that reasonableness 5 may be judged “in light of the available information at the time of filing”). 6 Plaintiffs continue onward to discuss several of Defendants’ allegedly infringing 7 products, but nowhere indicate any further information regarding any prefiling 8 investigation. This weighs against Plaintiffs. See Calloway v. Marvel Entm’t Grp., 854 F.2d 9 1452, 1471 (2d Cir. 1988) (noting that the plaintiffs’ failure to describe a pre-filing inquiry 10 “alone strongly suggests that no inquiry was made”), rev’d in part on other grounds sub 11 nom. Pavelic & LeFlore v. Marvel Entm’t Grp., 493 U.S. 120 (1989); Enpat, Inc. v. 12 Microsoft Corp., 26 F. Supp. 2d 811, 813 (E.D. Va. 1998) (noting that where “plaintiffs 13 have presented no evidence that Enpat, its counsel, or its expert performed any prefiling 14 investigation of these products” it weighed in favor of an exceptional case determination). 15 However, Plaintiffs do at least partially neutralize Defendants’ contentions, noting that 16 many of Hi-Tech’s product labels contain “bombastic” statements claiming, e.g., 17 “significantly more nitric oxide production than any other nitric oxide supplement[,]” 18 supplement combinations that “leave[] an abundance of L-arginine uncompromised in the 19 muscle pool to create a wealth of NO,” and supplementation approaches that “blast[] high 20 dosages of L-arginine into the bloodstream . . . .” (Pls.’ Opp’n 10–12.) However this 21 advertising information in no way refutes the basic fact that many of the product labels 22 disclose far less than the amount of l-arginine required to infringe; that Plaintiffs may have 23 just recently discovered arguably misleading advertising does not sanction their prior 24 complete failure to examine the actual ingredients contained in Defendants’ products. At 25 best, the advertising’s juxtaposition to the ingredient amounts listed on the labels should 26 have made the Plaintiffs even more inquisitive regarding the actual substance of the 27 products against which they intended to assert infringement. (See also Pls.’ Opp’n 12–13 28 (noting that “Hi-Tech and Mr. Wheat, on whose declaration Hi-Tech relies, have a history 12 13cv651 JLS (MDD) (LEAD CASE) 1 of being the subjects of activities by federal regulators pertaining to statements made in Hi- 2 Tech’s supplement fact panels” and cataloging FDA actions).)5 3 Plaintiffs’ remaining arguments hinge on the fact that some of Vital’s products 4 contain “much more L-Arginine . . . than V[ital] makes it seem[,]” be it due to inferential 5 reasoning from ingredient-list ordering or because certain compounds dissociate into L- 6 arginine “when the powder product is mixed with liquid as instructed on the label . . . .” 7 (Id. at 15–16.) Notably, however, Plaintiffs nowhere argue that Vital’s products actually 8 contain amounts of L-arginine sufficient to make them infringing, instead arguing that 9 “[t]here is more than enough on the labels and advertising for V[ital] to reflect the presence 10 of at least 500 milligrams of L-arginine in its products[,]” and that Vital’s marketing claims 11 make “it reasonable to assume that [certain Vital] products contain more than a sufficient 12 amount of arginine to enhance nitric oxide production . . . .” (Id. at 17.) And Vital quickly 13 dispatches with the dissociation argument, noting that the quantity of the dissociation 14 compound “is less than 5 miligrams—far less than what is required to meet the ‘amount 15 sufficient to enhance endogenous endothelial NO’ claim limitation.” (Vital Reply 6 (citing 16 Kesten Decl. ¶ 2, ECF No. 270-2); see also id. at 7 (noting that dissociation amount for 17 second product was also insufficient to infringe), 7–8 (refuting Plaintiffs arguments about 18 a product “that was not even part of the case”).) 19 Given the foregoing, Defendants have submitted strong evidence that had Plaintiffs 20 conducted any reasonable pre-filing investigation, they would have been on notice that at 21 least some of the products in this litigation could not have infringed. Plaintiffs have failed 22 to compellingly rebut this showing. Accordingly, this weighs in favor of a finding of this 23 case being “exceptional” for purposes of awarding attorney fees. 24 /// 25 26 27 28 5 Plaintiffs also attempt to discredit Mr. Wheat, arguing that any statement in his declaration should have “the benefit of rigorous cross-examination” due to his past criminal record and other indiscretions. (Pls’ Opp’n 13–14.) However, as just mentioned, prior indiscretions by Hi-Tech or its associates does not somehow obviate the necessity of Plaintiffs performing a reasonable pre-filing inquiry. 13 13cv651 JLS (MDD) (LEAD CASE) 1 B. Whether Plaintiffs Pursued a File-and-Settle Strategy 2 Defendants further argue that this case is “exceptional” because of Plaintiffs’ 3 aggressive litigation tactics; namely that Plaintiffs sued many defendants in order to extract 4 nuisance-value settlements, typical behavior for a “patent troll.” (Vital Mot. 14–16; Hi- 5 Tech Mot. 8–11.) Defendants attach various settlement documents and licensing 6 agreements in support of these allegations. (See generally ECF No. 257.) Plaintiffs respond 7 by first objecting to Defendants’ use of the term “patent troll,”—“whatever [Defendants] 8 mean by it”—and “respectfully request[ing] the Court to not acknowledge Defendants’ use 9 of this term, as it is clearly intended to be derogatory and pejorative.” (Pls.’ Opp’n 18.) 10 Turning to substance, Plaintiffs argue that Defendants do not address enough details about 11 the settlements (e.g., “what ThermoLife’s costs were” or what “the sales at issue were for 12 each settling defendant”); argue that “the number of defendants in a consolidated case is 13 irrelevant” to analysis; and note that “Plaintiffs have always been interested in testing the 14 merits of their claims” as evidenced by “the fact that Plaintiffs took their validity case all 15 the way to trial.” (Id. at 18–20.) Ultimately, the Court agrees with Defendants. 16 As an initial matter, whether or not the Court labels Plaintiffs “patent trolls”—i.e., 17 “in the patois of the patent community, . . . entities that hold patents for the primary purpose 18 of enforcing them against alleged infringers, often exacting outsized licensing fees on 19 threat of litigation[,]” Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1935 (2016)— 20 is irrelevant to the underlying conduct at issue in these Motions. Under any label, Plaintiffs 21 in the present case (1) only list one marketed product, sales of which never amounted to 22 more than 300 units, (see Kramer Dep. 29:18–34:20; 141:24–142:4; 145:12–146:11; 23 147:1–15); (2) brought suit under three patents that expired several months after 24 ThermoLife agreed to purchase the licenses, (compare ECF No. 83-4 (exclusive equity 25 agreement dated 02/05/2013), with ECF No. 253-10 at 36:20–24 (June 11, 1993 priority 26 date); 150:17–151:1 (same); 217:15–19 (same)); (3) settled early with many of the 27 defendants in this lawsuit for seemingly small dollar amounts, (e.g., ECF Nos. 257-1–6); 28 and (4) have filed numerous infringement suits, e.g., Lex Machina, 2013 Patent Litigation 14 13cv651 JLS (MDD) (LEAD CASE) 1 Year in Review, 8 (2013) (listing, with 117 cases, “ThermoLife International” as third- 2 highest “Plaintiff[] Filing Most New Cases”). Although Plaintiffs are correct that “[a] party 3 seeking protection of constitutionally granted patent rights is not automatically the villain 4 simply because it brings infringement allegations against multiple defendants,” Digitech 5 Image Techs., LLC v. Newegg, Inc., No. 8:12-CV-01688-ODW, 2013 WL 5604283, at *5 6 (C.D. Cal. Oct. 11, 2013), that does not therefore mean that the Court must turn a blind eye 7 to the pattern of action here. See id. (making above statement in case “without any evidence 8 of malfeasance”). And the pattern of action here is indeed one that strongly suggests 9 Plaintiffs brought suit against many defendants without carefully reviewing their claims as 10 a calculated risk that might yield nuisance-value settlements. Accordingly, this evidence 11 weighs in favor of finding this case to be exceptional.6 See, e.g., Eon-Net LP v. Flagstar 12 Bancorp, 653 F.3d 1314, 1327–28 (Fed. Cir. 2011) (“The record supports the district 13 court’s finding that Eon–Net acted in bad faith by exploiting the high cost to defend 14 complex litigation to extract a nuisance value settlement from Flagstar. At the time that the 15 district court made its exceptional case finding, Eon–Net and its related entities, 16 Millennium and Glory, had filed over 100 lawsuits against a number of diverse defendants 17 alleging infringement of one or more patents from the Patent Portfolio”); Lumen View 18 Tech., 63 F. Supp. 3d at 326–27 (concluding that “the number of similar lawsuits filed 19 within a short time frame all indicate[d] that [the plaintiff’s] instigation of baseless 20 litigation [was] not isolated to this instance, but [was] instead part of a predatory strategy 21 aimed at reaping financial advantage from the inability or unwillingness of defendants to 22 engage in litigation against even frivolous patent lawsuits”). 23 /// 24 25 26 27 28 6 Although Defendants do not directly address Plaintiffs point that good faith is exhibited by the fact that the case proceeded all the way to trial, Hi-Tech argues that “it is evident that ThermoLife took a lesson from earlier patent trolls, taking one of its many cases through trial so that it could make this very argument.” (Hi-Tech Reply 9.) While there is no evidence to support this statement, the Court does not conclude that this is fatal to Defendants’ attorney-fee argument given the surrounding totality of the circumstances. 15 13cv651 JLS (MDD) (LEAD CASE) 1 CONCLUSION 2 Given the foregoing, the Court CONCLUDES that under the totality of the 3 circumstances Defendants have shown that this case is exceptional such that an award of 4 attorney fees is justified. In particular, Plaintiffs’ pre-filing investigation was severely 5 lacking, thus resulting in frivolous claims and the objective unreasonableness of certain 6 infringement contentions; Plaintiffs’ motivation was seemingly to extract nuisance-value 7 settlements from a large number of defendants; and awarding fees here will advance 8 compensation- and deterrence-oriented goals. The Court therefore GRANTS Defendants’ 9 Motions for Attorney Fees. 10 11 IT IS SO ORDERED. Dated: April 4, 2017 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 13cv651 JLS (MDD) (LEAD CASE)

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