BOS GMBH & Co. KG et al v. Macauto USA, Inc. et al

Filing 96

ORDER denying 87 Macuto's Motion for Attorney's Fees. Signed by District Judge Terrence G. Berg. (AChu)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
BOS GMBH & CO. KG, et al.
4:17-CV-10461-TGB
Plaintiff,
ORDER DENYING
MACAUTO’S MOTION FOR
ATTORNEY’S FEES
(ECF NO. 87)

vs.
MACAUTO USA, INC., et al.,
Defendants.

This is a patent infringement case in which Plaintiffs BOS GmbH
& Co. KG and BOS Automotive Products, Inc. (collectively, “BOS”)
alleged that Defendants Macauto USA, Inc. and Macauto Industrial Co.,
Ltd. (collectively, “Macauto”) infringed upon U.S. Patent No. 7,188,659,
titled “Injection-Molded Plastic Guide Rail” (the “’659 Patent”).
This matter is before the Court on Macauto’s post-summary
judgment motion for attorney’s fees. Defs.’ Mot. To Deem This Case
Exceptional & Seek Att’y’s Fees (hereinafter “Motion”), ECF No. 87.
Pursuant to E.D. Mich. LR 7.1(f)(2), the Court will decide the Motion
without a hearing. For the reasons that follow, the Court does not deem
this case an exceptional case warranting an award of attorney’s fees.
Accordingly, Defendants’ Motion is DENIED.

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I.

BACKGROUND

A. Procedural History
BOS filed this patent infringement case against Macauto on
February 13, 2017, alleging that Macauto infringed the ’659 Patent in
connection with making, using, offering for sale, selling, and importing
an automotive rear window shade (the “Accused Product”). Pls.’ Compl.,
ECF No. 1. Macauto answered on January 4, 2018, alleging that the ’659
Patent was invalid and denying that it infringed the ’659 Patent. Defs.’
Answer, ECF No. 22.
On October 18, 2019, the Court issued an opinion and order
construing the disputed claim terms within the ’659 Patent that are
material to the infringement and validity issues in this case, pursuant to
Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996). Op. &
Order Construing Disputed Claim Terms (hereinafter, the “Claim
Construction Ruling”), ECF No. 43.
Following the claim construction stage of this case, on April 3, 2020,
the parties filed cross-motions for summary judgment regarding
infringement and validity of the ’659 Patent. Pls.’ Mot. for Summ. J., ECF
No. 60; Defs.’ Mot. for Summ. J., ECF No. 62. On January 27, 2021, the
Court issued an opinion and order granting Macauto’s motion for
summary judgment and denying BOS’s motion for summary judgment.
The Court held, first, that the asserted claims are invalid for obviousness,
and second, that Macauto does not literally infringe the asserted claims.
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In light of these holdings, the Court dismissed this case with prejudice.
However, the Court held that if the asserted claims were found not
invalid, there remains a triable issue of whether Macauto infringes the
asserted claims under the doctrine of equivalents. Op. & Order Granting
Defs.’ Mot. for Summ. J. & Den. Pls.’ Mot. for Summ. J. (hereinafter, the
“Order”), ECF No. 83.
In the meantime, on August 26, 2020, the parties held a settlement
conference. However, Macauto alleges that “meaningful progress was not
made” because BOS “simply declared victory on infringement” based on
its “mistaken confidence” in its reading of the Claim Construction Ruling.
Defs.’ Mot. Br. 9-10, ECF No. 87 at PageID.4000-01.
Having prevailed on the issues of literal infringement and validity
at the summary judgment stage of this case, Macauto now moves for
attorney’s fees in the amount of $357,757.92.1 Macauto argues that this
is an exceptional case warranting an award of attorney’s fees because of
the strength of its non-infringement and obviousness arguments and the
unreasonableness of BOS’s litigation conduct.

Macauto timely filed the Motion on February 24, 2021, 28 days after the
January 27, 2021 Order, ECF No. 83, and accompanying Judgment, ECF
No. 85. See Fed. R. Civ. P. 54(d)(2)(A)-(B) (providing for attorney’s fees on
motions filed “no later than 14 days after the entry of judgment”
“[u]nless . . . a court order provides otherwise”); E.D. Mich. LR 54.1.2(a)
(requiring motions for attorney’s fees to be filed “no later than 28 days
after entry of judgment”).
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B. Summary Judgement Ruling
The Court has previously set forth an extensive background of
the ’659 Patent, the asserted claims, the Accused Product, and the prior
art references. See Order, ECF No. 83, PageID.3905-12; see also BOS
GmbH & Co. KG v. Macauto USA, Inc., __ F. Supp. 3d __, 2021 WL
269971 (E.D. Mich. Jan. 27, 2021).
In summary, the asserted claims are drawn to an embodiment of a
two-part injection-molded plastic guide rail for an automotive window
shade. Like previous one-part injection-molded plastic guide rails, the
patented guide rail has an “undercut guide groove” for mounting the
window shade. According to the asserted claims, the patented guide rail
has “first” and “second” interconnectable “parts” with undercut-free
“grooves” that define the undercut guide groove. Using the undercut-free
grooves of the first and second parts to define the undercut guide groove
creates manufacturability and cost advantages compared to previous
guide rails.
On the issue of infringement, the nature of the Accused Product was
not at issue. The Accused Product includes a two-part molded plastic
guide rail for an automotive window shade. Like the patented guide rail,
the accused guide rail has an undercut guide groove for mounting the
window shade. The parties agreed that, in accordance with the asserted
claims, the accused guide rail has “first” and “second” interconnectable
“parts” with undercut-free features that define the undercut guide groove.
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Relevant to the parties’ infringement dispute, the undercut-free features
consist of a closed-bottom feature of the first part and a bottomless
feature of the second part. While Macauto conceded that the closedbottom feature of the first part is a groove, the parties disputed whether
the same is true of the bottomless feature of the second part. After
modifying its original construction of the term “groove” to mean “a long,
narrow cut, channel or depression in a material, but not through the
material,” the Court held that Macauto does not literally infringe the
asserted claims because “it cannot be genuinely disputed that the
bottomless feature of the second part is not a groove.” Id. at PageID.395458.
On the issue of obviousness, the only available sources of evidence,
other than the ’659 Patent itself, were four prior art references: BOS’s
own prior patent reference directed to one-part injection-molded plastic
window shade guide rails (“Schlecht”), a textbook that recommends twopart designs for molded plastic products to avoid undercuts (“Beck”), and
two prior patent references directed to two-part injection-molded plastic
curtain rails (“Nagano” and “Gastmann”). After concluding that the
relevant factual findings under the Graham factors were not at issue or
could not be genuinely disputed, Graham v. John Deere Co., 383 U.S. 1,
17 (1966), the Court held that the asserted claims are obvious in light of
Schlecht, Beck, Nagano, and Gastmann because they do not “involve
more than . . . the mere application of a known technique to a piece of
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prior art ready for the improvement,” KSR Int’l Co. v. Teleflex Inc., 550
U.S. 398, 427 (2007); Order, ECF No. 83, PageID.3928-39.
II.

STANDARD OF REVIEW

Section 285 of the Patent Act provides that district courts have
discretion in “exceptional” cases to award reasonable attorney’s fees to
prevailing parties. 35 U.S.C. 285. An “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., 572 U.S.
545, 554 (2014). “District courts may determine whether a case is
‘exceptional’ in the case-by-case exercise of their discretion, considering
the totality of the circumstances.” Id. Section 285 “imposes no specific
evidentiary burden,” but rather, “demands a simple discretionary
inquiry.” Id. at 557.
III.

ANALYSIS

A. Infringement
Macauto argues that this is an exceptional case because of the
strength of its non-infringement argument and the unreasonableness of
BOS’s litigation conduct. On the issues of infringement and BOS’s
litigation conduct, Macauto cites “the rule that a party cannot assert
baseless infringement claims and must continually assess the soundness

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of pending infringement claims, especially after an adverse claim
construction.” Taurus IP, LLC v. DaimlerChrysler Corp., 726 F.3d 1306,
1328 (Fed. Cir. 2013). Macauto argues that BOS should have known that
Macauto does not infringe the asserted claims because the bottomless
feature of the second part is not a groove. Macauto argues that based on
the ’659 Patent, this should have been “clear” at the outset, and should
have become “crystal clear” after the “essentially adverse” Claim
Construction Ruling. Defs.’ Mot. Br., ECF No. 87 at PageID.3999-4000.
Macauto argues that against this background, BOS unjustifiably filed
this case and unreasonably refused to settle this case.
In terms of clarity on the issue of infringement, Macauto’s reading
of the ’659 Patent and the Claim Construction Ruling contradicts the
Court’s analysis. At the summary judgment stage, the parties disputed
whether the bottomless feature of the second part is, in accordance with
the asserted claims, a “groove.” The Court found that “[b]ecause the
nature of the Accused Product is not at issue, the dispute between the
parties represents an issue of claim construction, not infringement.”
Order, ECF No. 83, PageID.3954-55 (citing Athletic Alternatives, Inc. v.
Prince Mfg., Inc., 73 F.3d 1573, 1578 (Fed. Cir. 1996)).
As set forth in the Court’s Order, however, neither the ’659 Patent
nor the Claim Construction Ruling resolved the disputed issue of claim
construction. With respect to the ’659 Patent, the Court reiterated its
finding at the claim construction stage that “the intrinsic evidence of
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record does not define the term” or “express intent to limit the claimed
grooves to the embodiments shown in the figures of the ’659 Patent.” Id.
at PageID.3947. Moreover, the Court explained that despite the Claim
Construction Ruling, “the dispute between the parties turns on an
unresolved ambiguity in the scope of the term ‘groove’ concerning
whether a long and narrow something (i.e., a cut, channel or depression)
is a groove regardless of whether it is bottomless.” Id. at PageID.3955
(emphasis added). Likewise, the Court found that “[n]ow that the
infringement issues are known, . . . its construction of the term ‘groove’
requires modification to resolve the above ambiguity in the scope of the
term.” Id. (emphasis added).
Accordingly, BOS’s infringement argument was not baseless either
at the outset of this case or after the Claim Construction Ruling.
Therefore, it cannot be said that BOS unjustifiably filed this case or
unreasonably refused to settle this case. On the issue of infringement,
the Court had to resolve the dispute between the parties at the summary
judgment stage for the very reason that neither the ’659 Patent nor the
Claim Construction Ruling resolved the underlying disputed issue of
claim construction. Moreover, even having resolved the disputed issue of
claim construction, the Court held that there remains a triable issue as
to whether Macauto infringes the asserted claims under the doctrine of
equivalents. For these reasons, Macauto’s non-infringement argument
was not so strong, nor was BOS’s infringement argument so weak, as to
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make this case exceptional. Likewise, in filing this case and refusing to
settle this case, BOS’s litigation conduct was not unreasonable, much less
so unreasonable as to make this case exceptional.
Given the emphasis Macauto places on its argument that BOS
unreasonably refused to settle this case, the Court notes several other
reasons why Macauto’s argument is unpersuasive. Initially, Macauto
contradicts its allegations that BOS “refus[ed] to settle” this case and did
“not engag[e] in settlement negotiations” by acknowledging not only that
the parties held a “settlement conference,” but also that BOS made a
“settlement demand.” ECF No. 87, PageID.4000-01. Macauto also
incorrectly faults BOS for the fact that “meaningful progress was not
made” because BOS “simply declared victory on infringement” based on
its “mistaken confidence” in its reading of the Claim Construction Ruling.
Id. As set forth above, in terms of clarity on the issue of infringement, it
was Macauto who misread the Claim Construction Ruling. In any event,
Macauto places undue reliance on the Federal Circuit’s SiOnyx decision
for the principle that “refusal to settle to [sic, a] case may be a factor in a
district court’s analysis.” Id. (citing SiOnyx LLC v. Hamamatsu
Photonics K.K., 981 F.3d 1339, 1355 (Fed. Cir. 2020)). In SiOnyx, the
Federal Circuit merely noted the non-prevailing party’s “refusal to settle”
in the context of its discussion regarding the district court’s abuse of
discretion in denying attorney’s fees. SiOnyx, 981 F.3d at 1355.

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Ultimately, the Federal Circuit rejected the prevailing party’s argument
because the non-prevailing party “was not obligated to settle.” Id.
B. Validity
Macauto also argues that this is an exceptional case because of the
strength of its obviousness argument as related to the issue of validity.
Macauto argues that the prior art references that made up its
obviousness defense “certainly existed prior to the filing of this case” and
were “disclosed to BOS during the case.” ECF No. 87, PageID.3999-4000.
Moreover, Macauto argues that at the summary judgment stage, BOS
“ignored Macauto’s invalidity arguments” and “had no substantive
response to Macauto’s invalidity contentions.” Id. at PageID.4004.
Macauto’s account of BOS’s treatment of the prior art references,
while not incorrect, is not the whole story. A patent enjoys a statutory
presumption of validity, and the party asserting invalidity must prove
invalidity by clear and convincing evidence. 35 U.S.C. § 282(a); Microsoft
Corp. v. i4i Ltd. P’ship, 564 U.S. 91, 95 (2011). At the summary judgment
stage, BOS, relying on an “absence of evidence” theory under Celotex,
argued that Macauto did not support its affirmative defense of
obviousness with clear and convincing evidence. Celotex Corp. v. Catrett,
477 U.S. 317, 325 (1986)). BOS argued that Macauto’s obviousness
argument failed not only for lack of expert testimony comparing the prior
art references to the asserted claims, but also for lack of clarity.

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As set forth in the Order, BOS’s absence of evidence theory was not
baseless. BOS correctly pointed out that Macauto did not offer any expert
report on obviousness. Instead, Macauto submitted foreign decisions that
assessed the cited prior art references and subsequently invalidated
foreign counterparts of the asserted claims, as well as an accompanying
affidavit from an employee. However, the Court agreed with BOS that it
could not defer to the foreign decisions and that it could not consider the
employee’s affidavit because his testimony was inadmissible. The Court
also agreed with BOS that Macauto’s obviousness argument suffered
from lack of clarity. “To be clear,” the Court explained, “for an accused
infringer who asks the Court to resolve the question of obviousness in its
favor, the Court would have expected a more thorough presentation of
Macauto’s obviousness argument through the use of textual argument,
claim charts, and the like.” Order, ECF No. 83, PageID.3926.
Accordingly, Macauto’s obviousness argument was not so strong as
to make this case exceptional. In fact, Macauto prevailed on the issue of
obviousness despite the evidentiary and clarity shortcomings of its
obviousness argument. While finding that Macauto’s obviousness
argument was “sufficiently supported,” the Court emphasized that its
finding arose from “the specific context of the ’659 Patent and the prior
art references.” Id. (emphasis added). “At bottom,” the Court explained,
“this is a case where the prior art references are not only easily
understandable, but also clear and convincing, lending significant
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support to Macauto’s obviousness argument in their own right.” Id. at
PageID.3926-27.
Likewise, BOS’s absence of evidence theory was not so weak as to
make this case exceptional. In fact, BOS could have prevailed on the issue
of obviousness absent either the specific context of the ’659 Patent and
the prior art references or the Court’s willingness to consider the prior
art references despite the evidentiary and clarity shortcomings of
Macauto’s

obviousness

argument.

See

Biotec

Biologische

Naturverpackungen GmbH & Co. KG v. Biocorp, Inc., 249 F.3d 1341,
1353 (Fed. Cir. 2001) (rejecting the accused infringers’ argument that
“the district court should have read the cited references and determined
for itself whether they could invalidate the Biotec patents” because “[i]t
is not the trial judge’s burden to search through lengthy technologic
documents for possible evidence”).
C. Other Litigation Conduct
Macauto also argues that BOS used this case “as an economic tool
to gain an advantage in the marketplace,” which it contends is
unreasonable litigation conduct, thereby rendering this is an exceptional
case. ECF No. 87, PageID.4003. Macauto argues that as opposed to
attempting to make itself whole, BOS used this case to force Macauto, a
smaller marketplace competitor, to incur litigation expenses. Macauto
alleges that BOS learned through discovery that sales of the Accused
Product were limited. Alleging that its own litigation expenses have
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exceeded profits on sales of the Accused Product, Macauto speculates that
BOS’s litigation expenses are as much or more than the damages at issue.
At the outset, Macauto does not allege that BOS forced it to incur
any litigation expenses beyond those attendant to ordinary patent cases.
For instance, Macauto does not allege that BOS prolonged this case,
complicated the issues, or created extraneous disputes. Moreover, having
presided over this case, the Court sees no reason to suspect that BOS
used this case to force Macauto to incur litigation expenses above and
beyond a typical case. Upon a review of the docket, BOS’s litigation
conduct appears to conform to the standard in such cases and was
exemplary in the sense that BOS did no more than necessary to advance
this case to summary judgment. Beyond the complaint, BOS’s only
original filings are a Markman brief, a motion for summary judgment,
and Daubert motions. For the sake of comparison, in addition to the
instant Motion for attorney’s fees, Macauto’s original filings include an
unsuccessful motion to dismiss, an unsuccessful motion to stay, and an
unsuccessful motion to extend expert discovery and disclosure dates.
While Macauto speculates that BOS’s litigation expenses are
comparable to the damages at issue, Macauto only accounts for what
“could be recoverable as either reasonable royalty or lost profit damages.”
Id. at PageID.3995. Had BOS prevailed on its willful infringement claims,
however, Macauto could have been held liable for enhanced damages “up
to three times the amount found or assessed.” 35 U.S.C. § 284; Halo Elecs.,
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Inc. v. Pulse Elecs., Inc., 136 S.Ct. 1923, 1934 (2016). In any event,
Macauto does not cite any authority for the principle that a case should
be deemed exceptional on the ground of unreasonable litigation conduct
when the non-prevailing patentee’s expenses are comparable to the
damages at issue. Absent contrary authority, and having found
Macauto’s other arguments unpersuasive, the Court declines to make
this the sole factor in deeming this case exceptional.
CONCLUSION
For the reasons stated above, having considered the totality of the
circumstances, this case does not stand out from others with respect to
the respective strengths and weaknesses of Macauto’s and BOS’s
arguments on the issues of infringement and obviousness, or the
unreasonableness of BOS’s litigation conduct, so as to be deemed an
exceptional case warranting an award of attorney’s fees. Octane Fitness,
572 U.S. at 554. Accordingly, the Motion is DENIED.

DATED this 19th day of April, 2021.
BY THE COURT:

/s/Terrence G. Berg
TERRENCE G. BERG
United States District Judge

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