Genspera, Inc. v. Mhaka
MEMORANDUM AND ORDER Re: Fees & Costs. Signed by Judge Marvin J. Garbis on 4/18/2016. (bmhs, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
CIVIL ACTION NO. MJG-12-3302
CIVIL ACTION NO. MJG-12-772
MEMORANDUM AND ORDER RE: FEES & COSTS
The Court has before it Counterclaim Defendant GenSpera
Inc.’s Motion for Attorneys’ Fees and Costs1 [ECF No. 152 in MJG12-7722] and the materials submitted relating thereto. The Court
has reviewed the materials submitted by the parties, and finds a
The motion is captioned, as is the instant document, as
referring to both MJG-12-772 and MJG-12-3302. The Court deems
the motion to be effective in regard to both cases.
All ECF Nos. cited herein refer to MJG-12-772 unless
On March 12, 2012, GenSpera, Inc. (“GenSpera”) filed Case
No. MJG-12-772 seeking a declaratory judgment establishing that
John Isaacs (“Isaacs”) and Samuel Denmeade (“Denmeade”) “were
properly named as inventors” on U.S. Patent Nos. 7,468,354 and
7,767,648 (the “Patents”) “in accordance with 35 U.S.C. § 116”
and that Annastasiah Mudiwa Mhaka (“Mhaka”) should not be added
to the Patents “as an additional inventor pursuant to 35 U.S.C.
Compl. ¶¶ 37, 42, ECF No. 1.
On April 26, 2012, Mhaka counterclaimed seeking to be added
as an inventor of the Patents by virtue of 35 U.S.C. § 256.
Answer, ECF No. 16.
On November 1, 2012, Mhaka filed suit against GenSpera,
Isaacs and Denmeade in the Circuit Court for Baltimore, Maryland
asserting state law claims (conversion, constructive fraud and
unjust enrichment) essentially based upon the contention that
she was an inventor of the invention claimed in the Patents.
Compl., ECF No. 2 in MJG-12-3302.
On November 8, 2012, the
defendants removed the case and it became MJG-12-3302.
On November 20, 2012, the parties filed cross motions for
summary judgment, essentially agreeing that even if Mhaka had
been a co-inventor, the Court could not apply § 256 to require
the Patent Office to add her as a named inventor3 [ECF Nos. 42
Mhaka claimed that because Mhaka was no longer seeking
§ 256 relief, GenSpera’s declaratory judgment claim should be
dismissed on jurisdictional grounds due to the absence of any
case or controversy.
On April 30, 2013, in the Memorandum and Order Re:
Procedural Matters [ECF No. 594] the Court granted summary
judgment to GenSpera and against Mhaka in MJG-12-772.
the Court permitted Mhaka to file an amended counterclaim in
MJG-12-772 asserting claims duplicative with those presented in
On October 21, 2013, GenSpera filed a motion [ECF No. 71]
seeking costs and fees pursuant to 35 U.S.C. § 285 related to
Mhaka’s counterclaim in MJG-12-772.
On December 30, 2013, the
Court issued the Memorandum and Order Re: Costs & Fees [ECF No.
82] denying the motion.
On January 2, 2014, Isaacs and Denmeade, joined by
GenSpera, filed a motion in both cases [ECF No. 83] seeking
summary judgment on Mhaka’s tort claims against them.
On September 12, 2014, the Court issued the Memorandum and
Order Re: Summary Judgment [ECF No. 129 in MJG-12-772 and ECF
Such an application would render the patent invalid.
Also filed as ECF No. 40 in MJG-12-3302.
The Court reasoned that the duplicative filing might
effectively eliminate certain jurisdictional issues.
No. 54 in MJG-12-3302] granting the summary judgment motions and
entered Judgments [ECF No. 130 in MJG-12-772 and ECF No. 55 in
MJG-12-3302] dismissing all of Mhaka’s state law claims with
On September 26, 2014, GenSpera filed a timely motion for
attorneys’ fees and costs6 [ECF No. 131 in MJG-12-772], which was
denied without prejudice on December 1, 2014, to be renewed
and/or supplemented within 60 days of the final conclusion of
the then pending appellate proceedings.
See Order Re: Motion
for Costs and Fees, ECF No. 146.
On April 8, 2015, the mandate of the United States Court of
Appeals for the Fourth Circuit was filed [ECF No. 150],
effecting the dismissal of Mhaka’s appeal to the Fourth Circuit.
And on August 24, 2015, the mandate of the United States Court
of Appeals for the Federal Circuit was filed [ECF No. 151]
effecting the dismissal of Mhaka’s appeal to the Federal
On October 22, 2015, GenSpera filed the instant motion
seeking an award of attorney’s fees and costs pursuant to 35
U.S.C. § 285 and Local Rule 109.2, Rules of the United States
District Court for the District of Maryland (“Local Rules”).
Pursuant to Maryland Rule 1-341, 35 U.S.C. § 285, and 28
U.S.C. § 1927.
“The court in exceptional cases may award reasonable
attorney fees to the prevailing party.” 35 U.S.C. § 285.
“exceptional” case “is simply one that stands out from others
with respect to the substantive strength of a party’s litigating
position (considering both the governing law and the facts of
the case) or the unreasonable manner in which the case was
litigated.” Octane Fitness, LLC v. ICON Health & Fitness, Inc.,
––– U.S. ––––, 134 S. Ct. 1749, 1756 (2014).
may determine whether a case is ‘exceptional’ in the case-bycase exercise of their discretion, considering the totality of
the circumstances.” Id.
Exceptionality must be demonstrated by
a preponderance of the evidence.
Id. at 1758.
The determination of reasonable attorney fees is “a matter
that is committed to the sound discretion” of a district court
judge. Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 558
GenSpera seeks “all costs and attorneys’ fees related to
its defense against [Mhaka’s] claims in the above-captioned
Mot. 1, ECF No. 152.
There are three categories at
Attorneys’ fees related to the § 256 claim that
had been denied under the prior Brooks7 standard,
Attorneys’ fees related to defending against the
tort claims in trial and appellate proceedings,
Costs ($56,403.879 + $114,889.5710).
The Court shall address each in turn.
Attorneys’ Fees Related to § 256 Claim
Less than four months after this Court denied GenSpera’s
Motion for Costs and Fees [ECF No. 71] related to the § 256
inventorship counterclaim, the Supreme Court issued the Octane
Fitness decision, which changed the standard for deciding
motions for attorneys’ fees under 35 U.S.C. § 285.
contends that GenSpera’s request for reconsideration is untimely
because it was filed too late.11
However, since GenSpera filed
its motion within fourteen days of final judgment pursuant to
Referring to Brooks Furniture Mfg., Inc. v. Dutailier
Int’l, Inc., 393 F.3d 1378 (Fed. Cir. 2005), which required
proof, by clear and convincing evidence, of either material
inappropriate litigation conduct, or else “only if both (1) the
litigation is brought in subjective bad faith, and (2) the
litigation is objectively baseless.” Id. at 1381-82.
Amount reported in ECF No. 155 at 5.
The costs related to the § 256 claim as reported in ECF No.
155 at 5.
The costs related to the tort claims as reported in ECF No.
155 at 4.
The Court notes that Mhaka contended that the first motion
for fees, ECF No. 71, was untimely because it was filed too
Fed. R. Civ. P. 54(d)(2) and L.R. 109.2, the Court does not find
the motion untimely.
The Court may exercise its discretion to award fees to a
prevailing party in an “exceptional case.”
There is no doubt
that GenSpera is a prevailing party.
In Octane Fitness, the Supreme Court held that “an
‘exceptional’ case is simply one that stands out from others
with respect to the substantive strength of the party’s
litigating position (considering both the governing law and the
facts of the case) or the unreasonable manner in which the case
134 S. Ct. 1756.
The Court further explained
that there is “no precise rule or formula for making these
determinations,” and district courts must exercise their
discretion in each case, “considering the totality of the
Id. (noting that “under a similar provision in
the Copyright Act, district courts could consider a
‘nonexclusive’ list of ‘factors,’ including ‘frivolousness,
motivation, objective unreasonableness (both in the factual and
legal components of the case) and the need in particular
circumstances to advance considerations of compensation and
In the Memorandum and Order Re: Costs & Fees [ECF No. 82],
the Court denied GenSpera’s motion seeking a fee award pursuant
to § 285.
In particular, the Court found that GenSpera
proceeded with unnecessary discovery regarding Mhaka’s § 256based claims.
The Court does not find the change in definition
provided by Octane Fitness to warrant a change in result.
true that the defect in Mhaka’s § 256 claim should have been
apparent to her counsel.
However, that defect should also have
been apparent to GenSpera’s counsel who unnecessarily proceeded
beyond the pleading stage.
Hence, even considering the case as
exceptional, the Court concludes that it should not – and shall
not - exercise its discretion to award GenSpera attorneys’ fees
pursuant to § 285.
Attorneys’ Fees Related to Tort Claims
35 U.S.C. § 285
Generally, attorneys’ fees for non-patent claims are not
authorized under § 285. See Gjerlov v. Schuyler Lab., Inc., 131
F.3d 1016, 1025 (Fed. Cir. 1997) (“When an action embraces both
patent and non-patent claims, no fees under section 285 can be
awarded for time incurred in litigation of the non-patent
issues.” (quotation omitted)). However, § 285 can be considered
applicable to non-patent claims if they are sufficiently
“intertwined with the patent issues.”
Interspiro USA, Inc. v.
Figgie Int’l Inc., 18 F.3d 927, 933 (Fed. Cir. 1994).
determine whether the non-patent issues are sufficiently
intertwined with the patent issues, the court must consider
whether “the evidence would, in large part, be material to both
types of issues.” Stickle v. Heublein, Inc., 716 F.2d 1550, 1564
(Fed. Cir. 1983).
In Stickle, the court found that that an
anticipatory breach claim was sufficiently intertwined with a
patent claim because it “was also asserted as giving rise to an
implied license to obtain infringing machines.”
Similarly, in Interspiro, the breach of the settlement
agreement was dependent upon finding infringement of the patent,
and the Federal Circuit affirmed the district court’s award of
attorney fees under § 285.
18 F.3d at 933.
But the Gjerlov
court held that “attorney fees and costs could not be based upon
the patent statute [§ 285] because violation of the [contract]
did not mean infringement of the patent, and the court below did
not independently find infringement, but only breach of
131 F.3d at 1025.
In regard to Mhaka’s state law claims, the Court granted
The Court made no finding with regard to
Mhaka’s patent law (§ 256) claim.
The Court, assuming that
Mhaka was a co-inventor, held that she would have no claim for
conversion under Maryland law and that her equitable claims were
Accordingly, the state law claims were not sufficiently
intertwined with the patent issues so as to make § 285
applicable to them.
Maryland Rule 1-341
Defendants seek attorneys’ fees under Maryland Rule 1-341.12
Mot. Mem. 2, ECF No. 152-1; Reply 6, n.5, ECF No. 161.
“the scope of Rule 1–341 does not encompass proceedings in
Major v. First Virginia Bank-Cent. Maryland,
631 A.2d 127, 135 (Md. Ct. Spec. App. 1993).
Therefore, to the
extent that attorneys’ fees were incurred in federal court, they
cannot be reimbursed by virtue of Maryland Rule 1–341.
On September 12, 2014, the Court entered judgment [ECF No.
130] against Mhaka, dismissing all claims and awarded Defendants
their respective costs.
However, GenSpera did not timely file a
Bill of Costs with the Clerk.13
Local Rule 109.1, which governs
filings for costs other than fees, requires a Bill of Costs to
be filed within 14 days of the entry of judgment (or in the case
As requested in ECF No. 131-1 at 5-7, which was
incorporated by reference in the instant motion.
To date, there has been no filing in conformance with the
of costs on appeal, within 14 days after issuance of the mandate
by the Court of Appeals). L.R. 109.1.a. See also Fed. R. Civ. P.
“Non-compliance with these time limits shall be deemed a
waiver of costs.”
For the foregoing reasons, Counterclaim Defendant GenSpera
Inc.’s Motion for Attorneys’ Fees and Costs [ECF No. 152 in MJG12-772] is DENIED.
SO ORDERED, on Monday, April 18, 2016.
Marvin J. Garbis
United States District Judge
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