Travel Sentry, Inc. v. Tropp

Filing 254

MEMORANDUM AND ORDER, For the foregoing reasons, Travel Sentry's motion for attorney's fees is denied. The Clerk of Court shall otherwise tax costs in the ordinary course. (Ordered by Judge Eric N. Vitaliano on 8/19/2016) c/m (Galeano, Sonia)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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TRAVEL SENTRY, INC.,

Plaintiff,
-against-

06-cv-6415 (ENV) (RLM)

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DAVID A. TROPP,
Defendant.

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VITALIANO, D.J.,
On June 19, 2016, this Court issued a Memorandum & Order (1) granting plaintiffTraY"el
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Sentry's motion for summary judgment on its declaratory claim ofnoninfringement of the
patents in suit owned by defendant David Tropp; (2) denying Tropp's cross-motion for summ~
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judgment finding infringement; and (3) denying a motion to strike. ECF Dkt. No. 246; Trove{
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Sentry, Inc. v. Tropp, No. 06-CV-6415 (ENV) (RLM), --- F. Supp. 3d ----, 2016 WL 3640645~ at
*l (E.D.N.Y. June 29, 2016). Travel Sentry has now moved, in yet another redux, for

attorne~'s
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fees and costs, pursuant to 35 U.S.C. § 285 and 28 U.S.C. § 1927. Though technically not the::
renewal of a prior motion, it is the second time Travel Sentry has prevailed at the trial level,

ahct
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the second time it has sought attorney's fees. See ECF Dkt. No. 164. For the reasons that
follow, the motion for attorney's fees is once again denied, and, in principal part, for the samd

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reasons as before.
Discussion
At the conclusion of a patent case, "(t]he court in exceptional cases may award
reasonable attorney fees to the prevailing party." 35 U.S.C. § 285. Under prior caselaw,

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"[e ]xceptional cases" were limited to those involving "inequitable conduct before the [Patent land

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Trademark Office]; litigation misconduct; vexatious, unjustified, and otherwise bad faith
litigation; [or] a frivolous suit or willful infringement." Epcon Gas Sys., Inc. v. Bauer

Compressors, Inc., 279 F.3d 1022, 1034 (Fed. Cir. 2002) (citing Hoffmann-La Roche Inc. v.
Invamed Inc., 213 F.3d 1359, 1365 (Fed. Cir. 2000). A showing of vexatious or frivolous
litigation required the existence of two factors: "(l) the litigation is brought in subjective bad
faith, and (2) the litigation is objectively baseless." Brooks Furniture Mfg., Inc. v. Dutailier

Int'/, Inc., 393 F.3d 1378, 1381 (Fed. Cir. 2005) (citations omitted). However, since the time the
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prior attorney's fees motion was determined, the Supreme Court decided Octane Fitness, LLC v.
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ICON Health & Fitness, Inc., --- U.S.---, 134 S. Ct. 1749, 188 L. Ed. 2d 816 (2014). In Octane
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Fitness, the Court abrogated Brooks Furniture and held that the presence of either bad faith or
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exceptionally meritless claims could warrant an award of fees. Id. at 1757. The Court also

redefin~ an "exceptional" case a~ ."si~ply on... that stan~s o~t from others with .respect to the
substantive strength of a party's ht1gatmg pos1t1on (cons1denng both the governmg law and ilie
facts of the case) or the unreasonable manner in which the case was litigated." Id. at 1756.
Finally, it rejected the "clear and convincing" evidence standard for a lower "preponderance qf
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the evidence" standard. Id. at 1758.
Travel Sentry fails to vault over even Octane Fitness's lower bar. The law of divided

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infringement has shifted repeatedly over the past several years, as evidenced by the fitful pattj of

Akamai Techs., Inc. v. Limelight Networks, Inc. ("Akamai V''), 797 F.3d 1020, 1022 (Fed. Cit.
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2015) (en bane) (cert. denied, Limelight Networks, Inc. v. Akamai Techs., Inc., 136 S. Ct. 1661
(2016)). Moreover, "courts continue to hold claims of baselessness to a high bar." Small v.

Implant Direct Mfg. LLC, No. 06-CV-683 (NRB), 2014 WL 5463621, at *3 (S.D.N.Y. Oct. 23,
2014), ajf'd, 609 F. App'x 650 (Fed. Cir. 2015). "Mere assertions that a party's arguments Jere

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without merit are generally unavailing; rather, courts are more likely to award fees where a pruity
knew or willfully ignored evidence of his claims' meritlessness, where such meritlessness

coul~

have been discovered by basic pre-trial investigation, or where such meritlessness is made clel
to the court early in the litigation." Id. (collecting cases).
None of the factors articulated in what appears to be a more relaxed approach are preseht
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here. Tropp still had at least a plausible basis to argue that Travel Sentry was guilty of

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infringement under the new "conditioning participation" theory propounded in Akamai V,
untested at the time of briefing, even though that argument was ultimately unpersuasive. Neither

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was the matter unreasonably litigated. This Court, in fact, sought supplemental briefing on thei
impact of Akamai V, and permitted Tropp to advance his argument of infringement based on that
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decision's marginally expanded divided infringement test. Even by a preponderance of the
evidence, Travel Sentry cannot show that these claims, which were of first impression in this
district, were patently meritless or unreasonably litigated.
Nor is there any basis for Travel Sentry's claim for attorney's fees under 28 U.S.C. §

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1927. These standards remain unchanged from the original motion for fees. 1 As before, and for
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the same reasons as discussed above, Travel Sentry is unable to satisfy any of the prerequisites I
for an award under§ 1927. Tropp's infringement motion, though ultimately unsuccessful, wasi
made on court permission and had some factual and legal support to blaze untrodden trail.

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court may sanction any attorney who "multiplies the proceedings in any case unreasonably
and vexatiously" by requiring them "to satisfy personally the excess costs, expenses, and
attorneys' fees reasonably incurred because of such conduct." 28 U.S.C. § 1927. An award
under§ 1927 must be based on "clear evidence that (1) the offending party's claims were
entirely without color, and (2) the claims were brought in bad faith - that is, 'motivated by
improper purposes such as harassment or delay."' Eisemann v. Greene, 204 F.3d 393, 396 (2d
Cir. 2000) (quoting Schlaifer Nance & Co. v. Estate of Warhol, 194 F.3d 323, 336 (2d Cir.
1999)).
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/s/ USDJ ERIC N. VITALIANO