Superior Industries, LLC v. Masaba, Inc.

Filing 260

MEMORANDUM OPINION AND ORDER. Masaba's Renewed Motion for Attorney Fees and Costs (Doc. No. 256 ) is respectfully DENIED. (Written Opinion) Signed by Judge Donovan W. Frank on 9/13/2017. (BJS)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Superior Industries, LLC,

Civil No. 10-764 (DWF/LIB)

Plaintiff,
v.

MEMORANDUM
OPINION AND ORDER

Masaba, Inc.,
Defendant.

John M. Weyrauch, Esq. Paul P. Kempf, Esq., and Peter R. Forrest, Esq., Dicke, Billig &
Czaja, PLLC, counsel for Plaintiff.
Jeffrey Carl Brown, Esq., Sapientia Law Group; and Sander J. Morehead, Esq. and
Tim R. Shattuck, Esq., Woods Fuller Shultz & Smith, P.C., counsel for Defendants.

INTRODUCTION
This matter is before the Court on Defendant Masaba, Inc.’s (“Masaba”) Motion
for Attorneys’ Fees. (Doc. No. 256.) The Court assumes the reader’s familiarity with the
basic facts of this case, which are set out in detail in the Court’s prior orders. In short,
this action involved allegations by Plaintiff Superior Industries, Inc. (“Superior”) that
Masaba infringed claims of U.S. Patent No. 7,424,943 (the ’943 Patent), U.S. Patent
No. 7,607,529 (the ’529 Patent), and U.S. Patent No. 7,845,482 (the ’482 Patent)

(together the “Unloader Patents”) 1 by selling certain truck unloaders, and that Masaba
infringed claims of U.S. Patent No. 7,470,101 (the ’101 Patent) and U.S. Patent
No. 7,618,231 (the ’231 Patent”) (together, the “Support Strut Patents”) 2 by selling
certain telescoping conveyors. (Doc. No. 36 (“Am. Compl.”) ¶¶ 14-32.) Masaba filed
amended counterclaims seeking, in relevant part, declaratory judgment that the patentsin-suit are invalid.
In August 2012, the Court issued a Markman Order construing the disputed
claims. (Doc. No. 118 (the “Markman Order”).) The key constructions included:
• “support frame” – a frame consisting of a pair of side frame members
and an end frame member that provides a barrier for supporting an
earthen ramp that can also provide support for a pivoting ramp when it
is in a lowered position;
• “ramp section” – first/second ramp section including a ramp and a frame
consisting of a pair of side frame members and an end frame member
that provides a barrier for supporting an earthen ramp that can also
provide support for the pivoting ramp when it is in a lowered position;
• “channel beam” – a metal beam having a perimeter wall with three
complete sides and one partial side configured to substantially surround
all four sides of the respective beam it engages with; and

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The Unloader Patents are directed to a truck unloader system with a drive-over
ramp system (with three sections) and a conveyer system to transport material from a
truck to a hopper. The primary disputed terms of the Unloader Patents are “support
frame” and “ramp section.”
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The Support Strut Patents are directed to a telescoping support strut system to hold
up the conveyer system. The support strut is comprised of two sections, and each section
is comprised of a pair of parallel beams that are braced together. The second strut
section’s beams are referred to as “channel beams.” The primary disputed terms of the
Support Strut Patents are “channel beam” and “elongate opening.”
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• “elongate opening” – slot defined by the openings in the partial fourth
sides of the channel beams.
Based on these constructions, Superior conceded that it could not prove infringement and
filed a motion seeking entry of judgment of non-infringement and dismissal of the
invalidity claims. (Doc. Nos. 143 & 144.) The Court granted Superior’s motion for
judgment of non-infringement. (Doc. No. 154.) Superior appealed the Markman Order
to the Federal Circuit Court of Appeals. (Doc. No. 159.)
On January 16, 2014, the Federal Circuit vacated and remanded the case for
clarification, instructing the Court to provide a factual context to the disputed
claim-construction issues so that the Federal Circuit could determine which of the claim
constructions would affect the infringement analysis. Superior Indus., Inc. v. Masaba,
Inc., 553 F. App’x 986, 989-91 (2014) (“Superior I”). Masaba filed a Second Motion for
Summary Judgment of Non-Infringement. (Doc. No. 190.) The Court found that
Masaba’s accused unloaders do not contain a “support frame,” that Masaba’s support
struts do not include a “channel beam,” and therefore that Masaba’s accused unloaders
and support struts do not infringe any of the asserted patent claims. (Doc. No. 226 at
8-17.) The Court granted summary judgment in favor of Masaba. (Id. at 17.) Superior
appealed the decision. On June 2, 2016, the Federal Circuit issued an opinion affirming
the Court’s claim construction and grant of summary judgment. Superior Indus., Inc. v.
Masaba, Inc., 650 F. App’x 994 (2016) (“Superior II”). In particular, the Federal Circuit
found the Court’s construction of “support frame” and “ramp section,” both of which
required the support frame to be capable of supporting an earthen ramp, to be consistent
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with the explicit definitions of those terms in the Unloader Patents. Id. at 998-99. The
Federal Circuit further explained:
The [district] court determined that Masaba’s accused [unloader] designs do
not infringe because they lack an end frame member and use steel ramps,
not earthen ramps. In particular, the [district] court explained that
Masaba’s designs A-C have “no structure between the pivoting ramps and
the portable steel access ramps that comprises a barrier at all,” and
Masaba’s designs D and E “do not have any structure that could be
characterized as a ramp support frame.”
(Id. at 998 (citations omitted).) The Federal Circuit noted that Superior argued that the
court erred in construing “ramp section” to require a “support frame,” that in turn
requires the presence of an earthen ramp, but found that argument unpersuasive in light
of the claim language and specification. (Id. at 998-99.) In addition, the Federal Circuit
found that the construction of “channel beam” was correct because the specification and
claims of the Strut Patents “make clear that a ‘channel beam’ must have four sides, where
the fourth side is a partial side.” (Id. at 999.) The Federal Circuit affirmed the Court’s
grant of summary judgment of non-infringement of the Unloader Patents and the Strut
Patents. (Id. at 1000.)
Masaba now moves for attorney fees under 35 U.S.C. §285. 3 Superior opposes the
motion. The Court considers the parties’ arguments below.

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Masaba moved for attorney fees twice before, but in light of the pending appeals
before the Federal Circuit, the Court found the motions to be premature and denied them
without prejudice to refile. (Doc. Nos. 181 & 234.) Superior suggests that the Court’s
prior denials of attorney fees evidence the reasonableness of its litigation positions and
pre-filing investigation. The Court notes that it denied the motions as premature,
anticipating that the motion would be refiled after the Federal Circuit considered the
(Footnote Continued on Next Page)
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DISCUSSION
I.

Motion for Attorney Fees
Section 285 of the Patent Act provides that in “exceptional cases” the Court may

award reasonable attorney fees to a prevailing party. 35 U.S.C. § 285. The text of § 285
“imposes one and only one constraint on district courts’ discretion to award attorney’s
fees in patent litigation: The power is reserved for ‘exceptional’ cases.” Octane Fitness,
LLC v. Icon Health & Fitness, Inc., 134 S. Ct. 1749, 1755-56 (2014). The Patent Act
does not define “exceptional,” and therefore, it is given its ordinary meaning of
“uncommon, rare, or not ordinary.” Id. at 1756. The Supreme Court has defined an
“exceptional” case as “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.” Id. In
determining whether a case is “exceptional,” district courts are to exercise discretion on a
“case-by-case” basis and to consider the totality of the circumstances, using a
non-exclusive list of factors including: “frivolousness, motivation, objective
unreasonableness . . . and the need in particular circumstances to advance considerations
of compensation and deterrence.” Id. at 1756 n.6. The approach is meant to be flexible

(Footnote Continued From Previous Page)
respective appeals. The Court did not previously reach the merits of Masaba’s fee
request.

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and a patent litigant may establish entitlement to fees by a preponderance of the evidence.
Id. at 1758. 4
Here, Masaba argues that the following factors support an award of attorney
fees: (1) Superior’s claim-construction and infringement positions were exceptionally
weak; (2) Superior failed to perform a meaningful pre-suit investigation; (3) Superior
engaged in repeated litigation misconduct; and (4) Superior’s unreasonable conduct
continued after remand by the Federal Circuit. Masaba argues that the totality of the
circumstances support an award of attorney fees in the amount of roughly $1.2 million.
Masaba also argues that this case is particularly egregious, thus warranting an award of
expert fees totaling just over $145,000. The Court considers the relevant factors below.
A.

Strength of Litigation Position

Masaba argues that both Superior’s claim-construction and infringement
arguments were extraordinarily weak. Masaba submits that it was clear that the Unloader
Patents require a ramp support frame for supporting an earthen ramp and that Masaba’s
unloaders do not employ an earthen ramp or any type of structure for supporting one. In
addition, Masaba argues that the Strut Patents require channel beams with three full sides
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Masaba points out that in the Octane Fitness decision, the Supreme Court used the
preponderance-of-evidence standard instead of the clear-and-convincing standard of
evidence. This distinction was noted in Icon Health & Fitness, Inc. v. Octane Fitness,
LLC, 112 F. Supp. 3d 888, 892 (D. Minn. 2015) (explaining that the Supreme Court
rejected the clear-and-convincing standard and held that “a patent litigant may establish
entitlement to fees by a preponderance of evidence”). Even in an exceptional case, the
Court retains the discretion to decline an award of fees. See Icon Health & Fitness, Inc.
v. Octane Fitness, LLC, 576 F. App’x 1002, 1005 (Fed. Cir. 2014) (explaining that the
Supreme Court’s decision in Octane did not revoke the discretion to deny fee awards
even in exceptional cases).
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and a partial fourth side, and that it is obvious that Masaba’s struts do not have channel
beams.
More particularly, with respect to claim construction, Masaba points out that
Superior’s proposed constructions were rejected by the Court and the Federal Circuit.
For example, with respect to the Unloader Patents, the rejected constructions include the
following: (1) that “support frame” and “ramp support frame” be construed as “a frame
that has a pair of side frame members and an end frame member” without reference to the
support frame functioning as a barrier for supporting an earthen ramp; (2) that “first
frame member [of a ramp support frame] defining a barrier” be construed to mean “a
frame member defines a structure” so as to eliminate the term “barrier”; (3) that “first
portion [of a ramp] configured to support the end of an earthen ramp” be construed to
mean “the first portion has a suitable structure that is able to support an end of an earthen
ramp” without reference to the formation of a barrier; (4) that “first portions [of the ramp
support frames] maintain support of the earthen ramp” be defined as “first portion stays
on the ground and does not move so the earthen ramp does not move” without requiring
that the unloader have a portion of the ramp specifically designed to support an earthen
ramp and that the portion actually maintains the earthen ramp’s position. 5 Masaba

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The above constructions pertain to the ’943 and ’529 Patents. Masaba makes
similar arguments based on allegedly weak proposed constructions with respect to the
claims of the ’482 Patent, and additionally argues that Superior’s infringement claims
with respect to the ’482 Patent lacked merit because that patent had not issued when the
accused designs were sold.
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further argues that Superior’s proposed constructions were unsupported by the intrinsic
record and in some cases directly contrary to the relevant patents.
With respect to the Support Strut Patents, Masaba points out that all of the asserted
claims require a second strut section with parallel channel beams. (Doc. No. 118 at
43-48.) Superior argued that “channel beam” should be construed as a “structure that
forms a C-shaped channel on each side of the second strut section, which is formed by a
perimeter wall that has three wall portions such that there is an elongate opening or slot
along one side of each channel beam that extends the length of each channel beam.”
Masaba asserts that this proposed construction was baseless because Superior knew that
Masaba’s accused strut design did not employ a beam with any channel at all and, despite
that fact, unreasonably proposed a construction that provided for a three-sided structure
instead of a beam with three full sides and a partial fourth side. Masaba points out that
the Federal Circuit affirmed the Court’s construction of “channel beam” while explaining
that the specification and claims make it clear that a “channel beam” must have four
sides, with the fourth side being a partial side. Superior II, 650 F. App’x at 1000.
Masaba submits that no reasonable person skilled in the art could have read the Strut
Patents and concluded that a channel beam means a three-sided structure. Moreover,
Masaba submits that under any reasonable construction of “channel beam,” it is obvious
that Masaba’s accused struts do not infringe the Strut Patents.
In addition, Masaba argues that even if the Court had adopted certain of Superior’s
proposed constructions, Superior still would not have had a viable infringement claim.
First, with respect to the Unloader Patents, Masaba argues that even if the Court
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construed “support frame” as Superior proposed, Superior still would not have had a
viable infringement claim because (1) the Court concluded that none of the accused
unloaders has a “support frame” with an “end frame member” and (2) even if Superior
could have established that Masaba’s allegedly infringing unloader products had a
structure that constituted a “support frame,” Masaba’s accused unloaders do not utilize an
earthen ramp and therefore have no frame member or other structure intended, designed,
or configured to support an earthen ramp. 6 Second, as to the Strut Patents, Masaba
argues that under any reasonable construction of the term “channel beam,” Masaba’s
struts do not infringe because Masaba’s strut design does not include a second strut
section with “channel beams” of any configuration.
Superior responds that simply because the Court and the Federal Circuit did not
adopt its proposed claim construction and Superior failed to win its patent-infringement
suit does not make this an exceptional case. In particular, Superior points out that a
concurring opinion in the Federal Circuit’s decision in the first appeal commented that
the district court “read a great deal into the claims in the process of construing them,” see
Superior I , 553 F. App’x at 991 (Rader, C.J. concurring), but that the panel that heard the
second appeal affirmed the district court’s claim constructions and judgment of
non-infringement. Superior maintains that its claim construction and infringement
positions were reasonably based on established legal standards, and asserts that the
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Masaba also argues that Superior did not have a reasonable infringement argument
with respect to the term “first frame member [of a ramp support frame] defining a
barrier” because the accused unloaders do not have a support frame with an end-frame
member that defines a barrier.
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outcome of this case rested on the claim construction of one term from each of the
asserted patent families. Superior also asserts that claim construction is complex, both
factually and legally, with a high reversal rate and leading to uncertainty for litigants.
Here, the Court did not adopt Superior’s proposed claim constructions, and the
Federal Circuit affirmed the Court’s constructions. Despite this, the Court does not find
Superior’s proposed constructions to be so weak or unreasonable so as to “stand out”
with respect to “substantive strength.” The same is true for Superior’s infringement
arguments, many of which were rendered weak after Superior failed to prevail on its
proposed claim constructions. The Court notes that fee awards are not to be used as a
penalty for failure to win a patent infringement suit. Octane Fitness, 134 S. Ct. at 1753.
Here, despite the weaknesses of Superior’s claim construction and infringement
arguments, the Court does not consider them to be sufficiently weak so as to warrant a
finding of an “exceptional case” that could, in turn, justify a fee award.
B.

Unreasonable Manner of Litigation

Masaba also argues that this lawsuit is exceptional because Masaba failed to
conduct a meaningful pre-trial investigation and engaged in repeated misconduct.
First, Masaba argues that neither Superior nor its counsel performed a meaningful
pre-suit investigation. Masaba points out that Superior’s Complaint did not reference
particular claims of the asserted patents or provide an explanation of its infringement
allegations. Masaba also contends that shortly after Superior filed suit, Masaba asked
Superior to provide more information about its infringement allegations, but Superior
never responded to that request, and Superior’s CEO acknowledged the lack of an
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infringement investigation. Masaba also points to an August 2011 letter from Superior’s
counsel, wherein counsel acknowledged that due to a lack of information, Superior could
not set forth its infringement position on the Strut Patents and as to the Unloader Patents,
simply asserted that they do not require an earthen ramp. Masaba submits that discovery
confirmed the lack of pre-suit inquiry.
Superior argues that Masaba’s argument that Superior did not conduct a pre-suit
investigation is without merit, based on speculation, and lacks evidence. Superior
submits that a reasonable pre-filing inquiry of infringement “can simply consist of a good
faith, informed comparison of the claims of a patent against the accused subject matter.”
See Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295, 1302 (Fed. Cir. 2004).
Superior further submits that it made the necessary disclosures under Rule 26(a),
produced documents, identified persons with knowledge of Superior’s pre-suit
investigation, and provided detailed claim charts, all in accordance with the Federal Rules
of Civil Procedure and the Court’s pretrial schedule. Superior points out that Masaba did
not depose witnesses identified as having knowledge of the pre-suit investigation. In
addition, Superior points out that Masaba never challenged the pre-suit investigation via
Rule 11 or a motion to dismiss under Rule 12. Superior details the pre-suit investigation
in its opposition. (Doc. No. 252 at 7-14.)
Second, Masaba argues that Superior engaged in repeated litigation misconduct.
For example, Masaba asserts that Superior engaged in pervasive discovery misconduct by
wrongly asserting boilerplate objections, refusing to produce discoverable information
and documents, ignoring discovery orders, and misrepresenting that it did not have
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additional relevant financial documents, as well as documents related to the sale of
patented products. In addition, Masaba contends that Superior’s conduct continued after
the case was remanded by the Federal Circuit by objecting to Masaba refiling its motion
for summary judgment and moving to vacate the Court’s claim construction of “channel
beam” and “elongate opening.”
Superior argues that Masaba’s arguments with respect to alleged litigation
misconduct simply rehash discovery and litigation disputes in which the parties have
already engaged. Superior points out that Masaba sought attorney fees in connection to
its previous discovery motions and that the magistrate judge found no bad faith or
misconduct and repeatedly denied the fee requests. Finally, Superior argues that prior
discovery orders contradict Masaba’s claim that Superior engaged in litigation
misconduct.
After carefully reviewing the record, the Court concludes that Masaba has not put
forth sufficient evidence that Superior failed to conduct an adequate pre-suit investigation
or that Superior engaged in litigation misconduct, such that it would render this case
exceptional. After roughly six years of litigation, this case was determined largely (if not
completely) by the construction of a limited number of claim terms. Because the Court
has concluded that Superior’s positions on claim construction were not so unreasonable
so as to “stand apart,” and based on the totality of the circumstances, the Court concludes
that this case is not exceptional and, therefore, does not warrant an award of attorney
fees.

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ORDER
Based upon the foregoing, and all of the files, records and proceedings herein, IT
IS HEREBY ORDERED that Masaba’s Renewed Motion for Attorney Fees and Costs
(Doc. No. [256]) is respectfully DENIED.
Dated: September 13, 2017

s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge

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