Hytera Communications Corp. Ltd. v. Motorola Solutions, Inc.
Filing
178
Memorandum Opinion and Order. The Court finds that Motorola has not shown, by a preponderance of the evidence, that this case is "exceptional" within the meaning of 35 U.S.C. § 285. Therefore, Motorola's request for the imposition of attorney fees pursuant to 35 U.S.C. § 285 is DENIED. (ECF # 154 ). IT IS SO ORDERED. Judge Donald C. Nugent on 4/29/2021. (M,S)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
HYTERA COMMUNICATIONS CORP.
CASE NO. 1:17 CY 1794
LTD.,
JUDGE DONALD C. NUGENT
Plaintiffs,
MEMORANDUM OPINION
MOTOROLA SOLUTIONS,INC.,
AND ORDER
Defendant.
This matter is before the Court on Defendant, Motorola Solutions Inc.'s Motion for
Award of Attorney Fees Pursuant to 35 U.S.C. § 285. (EOF #154,155). Plaintiff, Hytera
Communications Corp., Ltd.("Hytera")filed a Brief in Opposition to this motion(ECF #158),
and Motorola filed a Reply brief in support of its request. (ECF #161). Hytera also filed a SurReply(ECF #164-1,168). Arguments were held on February 17,2021, and the parties each filed
post-hearing briefs including proposed findings offact and conclusions oflaw. (ECF #169, 175,
176,177). The matter is now fully briefed and ripe for the Court's consideration.
Legal Standard
The Patent Statute authorizes this Court to award "reasonable attorney fees to the
prevailing party" in "exceptional cases." 35 U.S.C. § 285. The determination of whether to
award fees under the statute requires a two-step process:(1)the coiuf must make a factual
determination as to whether the case is "exceptional," and(2)the court must exercise its
discretion to determine if an award of attorney fees is warranted. See Evident Corp. v. Church &
DwightCo., 399 F.3d 1310,1315 (Fed. Cir. 2005).
Under 35 U.S.C. § 285, a case is exceptional if under the totality ofthe circumstances "it
stands out from others with respect to the substantive strength ofa party's litigating position
(considering both the governing law and the facts ofthe case) or the unreasonable manner in
which the case was litigated." Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct.
1749(2014). A defendant need not show that the litigation is both objectively baseless and
brought in bad faith. Id. at 1757. Rather, a case may be deemed "exceptional" if it presents
"either subjective bad faith or exceptionally meritless claims." Id. A finding of subjective bad
faith may be supported solely by circumstantial evidence, without inquiry into the plaintiffs state
of mind. See, MarcTec, LLC v. Johnson & Johnson,664 F.3d 907,916-18 (Fed. Cir. 2012);
Kilopass V. Tech., Inc. v. Sidense Corp., 738 F.3d 1302,1313(Fed. Cir. 2013). The party
seeking attorneys fees under this section bears the burden of showing that the case is exceptional
by a preponderance ofthe evidence. Id. at 1758.
A case may also be designated "exceptional" when a suit originally brought in good faith
is prolonged or extended after it becomes clear that it can no longer be pursued in good faith.
Plaintiffs have an on-going obligation to review the substantive strength oftheir infringement
claims, especially following any potentially adverse claim construction. See Taurus IP, LLC v.
DaimlerChrysler Corp., 726 F.3d 1306(Fed. Cir. 2013). Although a lack ofearly notice from
the Defendant can be considered when determining whether an award of attorney fees is
appropriate, filing a Rule 11 motion, or otherwise providing early notice ofthe defects in a
plaintiffs infringement assertions are not pre-requisites for finding a case "exceptional." See,
Thermolife Int'l LLC v. GNC Corp.,922 F.3d 1347,1357-58; Blackbird Tech LLC v. Health In
Motion LLC,944 F.3d 910, 916(Fed. Cir. 2019).
Analysis
A. Subjective Bad Faith
Motorola claims that Hytera brought this action as a way of retaliating against it for
pursuing trade-secret and infringement claims against Hytera in multiple jurisdictions.' Hytera
claims that the prior litigation is irrelevant to the merits ofthis infringement case, citing
Motorola's withdrawal of its inequitable conduct defense and failure to tie its trade secret
allegations and verdict(s)to the patent at issue in this case. Motorola has not shown that the
trade secret claims it previously brought against Hytera impact the '846 Patent. The fact that
Motorola has not proven a nexus between the substantive findings ofthe prior cases and the
patent at issue in this case does not eliminate the possibility that this case was brought as a way
for Hytera to retaliate against Motorola, however, it does not provide sufficient support for
Following a four month trial in the Northern District of Illinois, ajmy found for Motorola
on its trade-secret claims. Further an Administrative Law Judge found Hytera to be an
intentional infnnger and copyist in ITC proceedings, and that decision was confirmed.
Motorola's allegations either. Motorola has not provided sufficient evidence to support an
inference that the infringement claims in this case were brought in bad faith. ^ Although
circumstantial evidence of bad faith can be sufficient to support an exceptional finding for
purposes of attorney fees, the allegation that Hytera's infringement claims in this case were
improperly motivated from the outset remains speculative and is unsupported even by
circumstantial evidence.
Further, there is no evidence of bad faith delays or obfuscation by Hytera during the
litigation process. The docket shows that although this case had its share of discovery issues and
other disagreements between the parties, the parties consistently engaged in good faith
discussions and worked cooperatively to arrive atjoint agreements resolving the majority ofthese
issues. (See, e.g., ECF #57,66, 72, 76, 88,119,122,125,127). The case history does not
demonstrate that Hytera engaged in exceptional litigation tactics, or that it was the cause of
undue delay.
B. Substantive Strength of Claims
Motorola contends that Hytera knew that this case was baseless from the beginning
because it was aware that the Motorola products did not have a "second threshold" and were not
capable of performing a "bass boost processing," which are part of Step SI03 ofthe '846 Patent.
In fact, Hytera never once alleged that the accused products practiced this step ofthe patented
Motorola points to internal emails that purport to show Hytera officers wanted to inform
customers that they were filing an infringement suit against Motorola. This does not
necessarily show that the suit was filed for an improper purpose, rather it could just as
easily show that Hytera truly believed Motorola was infringing their patent and wanted
customers to know this when deciding between suppliers.
method, not in the original Complaint, or in the First or Second Amended Complaints.
Nonetheless, Motorola never raised this argument in a Motion to Dismiss, despite having three
opportunities to do so. Neither party directly addressed the issue rmtil the Summary Judgment
stage, and, once raised. Motorola prevailed on this issue. Hjdera consistently proceeded in
accordance with its contention that the '846 Patent method is satisfied if there is either a treble
boost or a bass boost, and that both are not required.^ Hytera's proffered interpretation ofthe
"or" preceding the "second threshold" and "bass boost" language, though overly semantic,
isolated from the context ofthe surrounding patent language, and ultimately unpersuasive, is not
so devoid ofsubstance that it renders this case extraordinary for purpose of assigning attomey
fees under 35 U.S.C. § 285.
Assuming, based on the above, that this action was originally brought in good faith,
Hytera had a duty to re-evaluate the substantive strength of its case following claim construction.
See Taurus IP, LLC,726 F.Sd 1306. Motorola contends that Hytera failed in this duty by
continuing to rely solely on theories that are unsupportable under the claim construction of
"treble boost processing" that was adopted by this Court. "Treble boost processing" was
construed to mean "an automatic amplification of all treble frequencies using a gain greater than
1." The Court's claim construction Order also clearly explains that "treble boost" requires an
increase or amplification ofthe treble frequency using a gain greater than one and that a relative
Hjdera argued that because the word "or" appears in the description ofthis step, the
existence ofthe second threshold and the capability for bass boost processing are not
requirements for the patented method. It also cited Federal Circuit case law in which the
use ofthe word "or" was interpreted as "either or," rather than an "ifrthen" application,
though the Court eventually formd those cases to be distinguishable.
increase in the audibility ofthe treble frequency, achieved by reducing bass frequency, does not
satisfy the patent language.
Hytera argues that it did, in fact, alter its theory following claim construction, and that it
"has in no way argued for a 'relative' treble boost after the Court's construction." Its argument
on Summary Judgment was that the increase to all frequencies, with a contiguous reduction of
bass frequencies creates a treble frequency gain greater than 1, and, therefore, satisfies the
construed meaning of a "treble boost" within Step SI03 ofthe '846 Patent. This argument did
not prevail for all ofthe reasons set forth in the Court's Memorandum Opinion and Orders on
Summary Judgment. (ECF #148).
At first glance this argument appears to be in direct conflict with the Court's Opinion on
construction, and Hytera's disavowment of any argument for a relative treble boost seems
somewhat disingenuous. Hjdera appears to recognize that at no point does the accused product
increase only treble frequencies using a gain greater than one. It also describes the increase in
treble audibility as being created, in part, by a reduction in bass frequency. Therefore,there is an
implicit acknowledgment that the increase in treble audibility is only achieved by a relative
decrease in bass frequencies. However, Hytera has adjusted its argument in response to the claim
construction determination, by eliminating its sole reliance on decreased bass frequency, which
would not provide a treble gain greater than one. Hytera now argues that the accused product
simultaneously increases volume (providing a gain greater than one across all frequencies,
including treble frequencies), and decreases bass frequencies (increasing audibility ofthe treble
frequencies). Thus, H5dera has created an argument that technically follows the Court's
construction ofthe term, albeit by ignoring the other related findings set forth in the construction
opinion. There is also some basis in the expert reports for arguing that the volume increase
Hytera associates with the "treble boost" is triggered by a set threshold,thereby distinguishing it
from the software gain volume increase that would satisfy the second step ofthe patented
method. (See,ECF #133-7, Tfl 13). This argument was not fully developed or supported during
the Summary Judgment briefing, and did not adequately take into accoimt the Court's findings
underlying the claim construction, but it was not wholly unreasonable for Hytera to investigate
and attempt to develop such a theory following claim construction.'*
In the end,the Court's decision on Srmimary Judgment was not a close call. The patent
language, and the Court's construction of claim terms clearly support the finding in favor of
Motorola. Hytera's arguments were somewhat strained and often separated from the context
and a common sense interpretation ofthe patent language. However,they were not entirely
baseless or frivolous. A case is not extraordinary simply because the Plaintiff was ultimately
unsuccessful, even ifits lack ofsuccess was entirely predictable. In this case. Motorola did not
meet its burden of proving by a preponderance ofthe evidence that this case was exceptional
under 35 U.S.C. §285.
Motorola did not argue that Summary Judgment or fees were warranted because the accused
product failed to meet Step SI02, even though it should have been clear from the claim
construction Order that "current ambient noise" was to he viewed as the "distinct value to a
level ofnoise existing at a specific, singular moment in time," which is the antithesis of
Hytera's argument that it can refer to a weighted average consisting primarily of past values.
Because the parties did not argue this as a basis, however,the Court will not evaluate
whether this could have factored into a determination of whether this case is extraordinary
under 35 U.S.C. §285.
Conclusion
For the reasons set forth above,the Court finds that Motorola has not shown, by a
preponderance ofthe evidence, that this case is "exceptional" within the meaning of35
U.S.C. § 285. Therefore, Motorola's request for the imposition of attorney fees pursuant to
35 U.S.C. § 285 is DENIED. (ECF#154). ITIS SO ORDERED.
/s/ Donald C. Nugent
Judge Donald C. Nugent
UNITED STATES DISTRICT JUDGE
DATED: Anril 29.2021
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