ERFINDERGEMEINSCHAFT UROPEP GbR v. Eli Lilly and Company et al
MEMORANDUM OPINION AND ORDER re 369 MOTION for Attorney Fees filed by ERFINDERGEMEINSCHAFT UROPEP GbR.. Signed by Judge William C. Bryson on 7/18/2017. (nkl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
ELI LILLY AND COMPANY,
Case No. 2:15-CV-1202-WCB
MEMORANDUM OPINION AND ORDER
Before the Court is the motion of plaintiff Erfindergemeinschaft UroPep GbR (“UroPep”)
for an award of attorney fees in this case. Dkt. No. 369. Defendant Eli Lilly & Co. (“Lilly”)
opposes. The Court DENIES UroPep’s motion.
Section 285 of the Patent Act, 35 U.S.C. § 285, authorizes district courts to award
reasonable attorney fees to the prevailing party “in exceptional cases.” In Octane Fitness LLC v.
ICON Health & Fitness Inc., 134 S. Ct. 1749 (2014), the Supreme Court interpreted the term
“exceptional case” to mean “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. at 1756. The Court added
that “[t]here is ‘no precise rule or formula for making these determinations,’ but instead
equitable discretion should be exercised” in light of the circumstances. Id. (quoting Fogerty v.
Fantasy, Inc., 510 U.S. 517, 534 (1994)).
UroPep asserts two grounds in support of its request for a fee award: First, UroPep
argues that after the Court’s claim construction, Lilly’s non-infringement position was entirely
meritless and that Lilly should not have put UroPep to the task of proving infringement at trial.
Second, UroPep argues that Lilly’s anticipation defense, which was based on a monograph by
C.S. Cheung dealing with the herbal treatment of BPH, was meritless from the start and should
not have been pressed at trial. Those two issues, according to UroPep, required UroPep to invest
attorney time and resources prior to trial and at trial that should not have been necessary.
Accordingly, UroPep requests a fee award to compensate it for the time and resources spent in
addressing those two issues once it became clear that Lilly’s position on those issues was without
The Court concluded at trial, and concludes again now, that Lilly’s positions on those two
issues were weak, but not so weak as to render the case “exceptional” and justify an award of
attorney fees. The Supreme Court in Octane Fitness made clear that fee awards are not to be
made lightly, but are to be reserved for cases that are “uncommon, rare, or not ordinary,” i.e.,
well out of the mainstream. Octane Fitness, 134 S. Ct. at 1756. In so doing, the Court adopted
the test that had been used by the courts, including the Federal Circuit, since the 1952 Patent Act
and before the Federal Circuit’s decision in Brooks Furniture Manufacturing, Inc. v. Dutailier
International, Inc., 393 F.3d 1378 (Fed. Cir. 2005). Under the pre-Brooks standard, courts had
held that in assessing whether a case qualifies as “exceptional” under section 285, “the district
court must look at the totality of the circumstances.” Octane Fitness, 134 S. Ct. at 1754 (quoting
Yamanouchi Pharm. Co. v. Crystal Chem. Co., 231 F.3d 1339, 1347 (Fed. Cir. 2000)). Applying
the standard from Octane Fitness, this Court holds that this case is not “exceptional” and does
not warrant an attorney fee award. 1
The district court’s decision in Cognex Corp. v. Microscan Sys., Inc., No. 13-cv-2027,
2014 WL 2989975 (S.D.N.Y. June 30, 2014), on which UroPep relies for the proposition that
fees may be awarded for meritless arguments, is distinguishable. In that case, the district court
1. Lilly’s Non-Infringement Position
UroPep argues that Lilly had no defense to UroPep’s infringement claim following the
Court’s February 2017 order in which the Court clarified that the claim term “an inhibitor of
phosphodiesterase (PDE) V” meant a compound that was at least 20 times more selective for
PDE5 than for PDE1 through PDE4. At that point, according to UroPep, Lilly should have
conceded infringement, at least (presumably) if it could do so while preserving its position on
claim construction. UroPep contends that Lilly’s decision to force UroPep to litigate the issue of
infringement after the Court’s February 2017 order rendered the case exceptional.
It is true that the Court in its February 2017 summary judgment order rejected several of
Lilly’s non-infringement arguments, including its argument that tadalafil, the active ingredient in
Cialis, is not a PDE5 inhibitor within the meaning of the ’124 patent because it is not more than
20 times more selective for PDE5 than for PDE11. Dkt. No. 234, at 13-16. Nonetheless, as the
Court pointed out in its summary judgment order, Lilly still had available to it the argument that
in order to prove infringement, UroPep had to prove that Cialis was administered to patients with
BPH (i.e., lower urinary tract symptoms associated with an enlarged prostate), not simply to
patients with lower urinary tract symptoms not associated with an enlarged prostate. Id. at 1718.
At trial, Lilly sought to defend against the infringement claim based on its contention that
UroPep had failed to prove that Cialis was administered to patients to treat BPH, rather than to
treat those not having BPH but having lower urinary tract symptoms not associated with an
noted that the defendants’ infringement was willful, and the court found that the defendants had
engaged in unreasonable litigation tactics. The court accordingly held that the defendants should
be required to cover the plaintiffs’ attorney fees “related to litigation tactics taken by defendants
that have contributed unnecessarily to plaintiffs’ expenses in defending its patent.” Id. at *4. In
this case, the Court has held that Lilly did not engage in willful infringement and has not found
that Lilly has engaged in litigation misconduct.
enlarged prostate. Developing that theory of defense occupied a significant part of Lilly’s crossexamination of UroPep’s physician witness, Dr. Sliwinski. By questioning Dr. Sliwinski as to
how he diagnosed BPH before prescribing Cialis, Lilly attempted to show that doctors who
prescribe Cialis for patients with lower urinary tract symptoms are not necessarily using Cialis to
in fact treat BPH, because many of their patients may be suffering from lower urinary tract
symptoms not associated with an enlarged prostate. That theory, if credited by the jury, could
have resulted in a reduction of Lilly’s infringement liability or, conceivably, a decision by the
jury that UroPep had not proved infringement at all. Moreover, Lilly alluded to that theory
during its closing argument, although it did not press the theory at that time beyond asking the
jury to make its own determination on that issue. See Dkt. No. 346, Trial Tr. 1482. The jury
apparently did not accept that theory, instead inferring that doctors properly diagnose BPH
before prescribing Cialis for a BPH indication. Nonetheless, the theory was not frivolous, and
the Court is not disposed to hold that Lilly was required to abandon that theory (and its noninfringement defense in general) following the Court’s summary judgment ruling or be required
to pay UroPep’s attorney fees for the cost of putting on its infringement case.
It is significant that UroPep is seeking fees for being required to prove an issue on which
it bore the burden of proof.
Lilly in effect said to UroPep: “It is your burden to prove
infringement: Do it. And if your proof falls short in some respect, we will be entitled to
judgment even in the absence of any affirmative evidence of non-infringement from our side.”
UroPep emphasizes that its burden of proof on infringement—proof by a preponderance of the
evidence—was not overly demanding. But UroPep cites no cases awarding attorney fees in a
similar situation—that is, against the party without the burden of proof who declines to concede
on an issue at or before trial. Compare, e.g., Homeland Housewares, LLC v. Sorensen Research,
581 F. App’x 877, 881 (Fed. Cir. 2014) (affirming fee award where patentee “appeared
unprepared or unwilling to satisfy its burden” and “failed to produce its own admissible evidence
of infringement”); Cartner v. Alamo Grp., Inc., 561 F. App’x 958, 965-66 (Fed. Cir. 2014)
(affirming fee award where plaintiff patent holder advanced frivolous infringement argument);
Intex Corp. v. Team Worldwide Corp., 77 F. Supp. 3d 217 (D.D.C. 2015) (awarding fees against
patent holder defendant in declaratory judgment action, where patent holder refused to stipulate
to non-infringement after claim construction made clear that plaintiff’s products did not
Notwithstanding the absence of authority supporting UroPep’s position, the Court is not
prepared to conclude that an attorney fee award would never be appropriate when the first party
requires the second party with the burden of proof to prove its case, and the first party does not
introduce countervailing evidence. Moreover, in this case the Court regards the jury’s verdict on
infringement as fully supported by the evidence and the law.
Nonetheless, the Court is
persuaded that Lilly’s position on non-infringement did not render this case exceptional, as that
term is used in section 285.
2. Lilly’s Anticipation Defense
UroPep’s second argument is that Lilly’s anticipation defense based on the Cheung
reference regarding the use of Horny Goat Weed as a treatment for BPH was manifestly
meritless and justifies an attorney fee award to compensate UroPep for the time and expense of
having to meet that defense. As in the case of Lilly’s non-infringement position, the Court is
In an action for a declaratory judgment of noninfringement, the defendant patent holder
bears the burden of proving infringement. See Medtronic, Inc. v. Mirowski Family Ventures,
LLC, 134 S. Ct. 843, 849 (2014). For that reason, the Intex case, cited by UroPep, is not one in
which the party with the burden of proof was able to obtain an attorney fee award from the
opposing party when the opposing party failed to concede the issue and instead put the party with
the burden to its proof.
persuaded that the jury was fully justified in rejecting Lilly’s anticipation defense. Nonetheless,
the Court concludes that Lilly’s reliance on that defense was not so clearly unwarranted as to
render this case exceptional and call for an attorney fee award. 3
Lilly is correct that the herb epimedii, or Horny Goat Weed, contains icariin, which is a
selective PDE5 inhibitor. It is also true that the Cheung reference recommends the ingestion of
Horny Goat Weed to treat BPH, and that the Cheung reference antedates the priority date of the
’124 patent. Cheung reports that in a clinical study of 34 patients, the herbal treatment of what
Cheung calls “prostate hypertrophy,” i.e., BPH, produced positive results in 32 patients—more
than 90 percent of the patients tested. Moreover, Lilly’s expert, Dr. Claus Roehrborn, interpreted
the pertinent passage of the Cheung reference to mean that “34 patients were given the PDE5
inhibitor contained in herba epimedii, and it was found to have been an effective amount by their
response.” Dkt. No. 342, Trial Tr. 559.
The principal problem with the Cheung reference is that the language of the critical
passage of Cheung is ambiguous enough that it is not clear that Cheung’s discussion of Horny
Goat Weed inherently anticipates the claims of the ’124 patent. 4 In particular, the list of herbal
ingredients that were used in the study suggests that Horny Goat Weed (epimedii) was found in
UroPep also raises a timeliness challenge to Lilly’s argument regarding the merits of its
anticipation defense. In its response brief, filed on June 14, 2017, Lilly incorporated by
reference the substantive argument on anticipation that it filed in its motion for judgment as a
matter of law, which was filed the following day, on June 15, 2017. The Court finds that the
delay of one day in the submission of the incorporated argument is not prejudicial, as it did not
materially affect UroPep’s right to respond to the substance of Lilly’s anticipation arguments.
The Court therefore will consider the incorporated material from Lilly’s JMOL motion in its
analysis of the parties’ arguments about the role of Lilly’s anticipation defense in UroPep’s fee
At trial, UroPep also challenged the status of Cheung as a printed publication, arguing
that the Cheung reference was not “sufficiently accessible to the public interested in the art” to
be considered a printed publication under 35 U.S.C. § 102. UroPep has not raised the printed
publication issue as a ground for an award of attorney fees under section 285.
some, but not all, of the formulations given to the 34 patients.
Indeed, Dr. Roehrborn
acknowledged at trial that the Cheung reference indicated that “at least some” of the 34 patients
in the study received Horny Goat Weed. Dkt. No. 342, Trial Tr. 554.
That admission by Dr. Roehrborn highlights a flaw in Lilly’s anticipation case—the
Cheung reference did not make it unambiguously clear how many, if any, of the patients who
were administered Horny Goat Weed were among the 32 patients in the study as to whom the
study was shown to be “effective.” UroPep alluded generally to that issue in its rebuttal
summation, although it argued, incorrectly, that the language of the Cheung reference raised a
question whether the herbal epimedii “was actually administered to a patient.” The evidence was
sufficient to show that at least some patients received Horny Goat Weed; the gap in the proof
was over whether those patients who received Horny Goat Weed were among the patients who
showed improvement following their treatment.
In light of the ambiguity in the Cheung reference, among other problems with Lilly’s
anticipation theory, it is not surprising that the jury found Lilly had failed to prove anticipation.
However, the Court is not persuaded that Lilly’s anticipation defense was so manifestly meritless
as to render the case exceptional. It is not fanciful to characterize the evidence as permitting a
finder of fact to conclude that Horny Goat Weed contains a sufficient amount of a PDE5
inhibitor such that, under the right circumstances, it could have some ameliorative effect on
BPH. And the jury could conceivably have credited Dr. Roehrborn’s testimony that Cheung
should be interpreted to mean that among the patients in the study who were given Horny Goat
Weed, the amount administered was found to be effective.
In sum, although Lilly’s anticipation defense was weak and ultimately unconvincing to
the jury, Lilly’s effort to use the Cheung monograph as an anticipating reference was not beyond
the pale. The Court also finds that Lilly’s decision to press its anticipation defense did not
constitute litigation misconduct. Based on the totality of the circumstances, the Court declines to
award attorney fees for UroPep’s efforts to respond to Lilly’s anticipation defense.
The same day that Lilly filed its sur-reply brief in response to UroPep’s motion for
attorney fees, the Federal Circuit issued its opinion in AdjustaCam, LLC v. Newegg, Inc., No.
16-1882, 2017 WL 2854387 (Fed. Cir. July 5, 2017), reversing the denial of a motion for
attorney fees in another case originating from this district.
The Federal Circuit in the
AdjustaCam case concluded that the record there showed that the plaintiff (1) maintained its
infringement case even though, as applied to the defendant’s products, the infringement case was
baseless after the district court’s claim construction; (2) behaved “dubious[ly]” in litigating the
case; and (3) applied a damages model that extracted nuisance-value settlements from many
defendants while “continu[ing] to press baseless infringement contentions.” Id. at *6-7. “Based
on the totality of these case-specific circumstances,” the court reversed and remanded the case
for entry of an award of attorney fees. Id. at *7, *16.
The facts of this case do not rise to the level of the “case-specific circumstances” that the
Federal Circuit identified in AdjustaCam. First, in its fee motion UroPep has taken issue with
the merits of Lilly’s positions on infringement and anticipation, but not Lilly’s manner of
litigating this case. Moreover, with respect to the merits of issues raised in the district court, it is
not enough for a party’s position to be rejected. Octane Fitness requires that “the substantive
strength of a party’s litigating position” be exceptional, as “one that stands out from others.” 134
S. Ct. at 1756. “A case presenting either subjective bad faith or exceptionally meritless claims
may sufficiently set itself apart from the mine-run of cases to warrant a fee award.” Id. at 1757;
see also SFA Sys., LLC v. Newegg Inc., 793 F.3d 1344, 1348 (Fed. Cir. 2015) (a losing party’s
position that is “not so meritless as to ‘stand out’ from the norm” is not exceptional); Gaymar
Indus., Inc. v. Cincinnati Sub-Zero Prods., Inc., 790 F.3d 1369, 1373 (Fed. Cir. 2015) (“[F]ees
are not awarded solely because one party’s position did not prevail.”); iLOR, LLC v. Google,
Inc., 631 F.3d 1372, 1378 (Fed. Cir. 2011) (“Though iLOR was ultimately unsuccessful in its
patent infringement suit, Google has not met its high burden to show . . . that this suit was
brought frivolously or that iLOR’s position on claim construction was objectively baseless.”).
Lilly lost on both infringement and anticipation, but its positions were not exceptional.
Compare, e.g., Stragent, LLC v. Intel Corp., No. 6:11-cv-421, 2014 WL 6756304, at *5 (E.D.
Tex. Aug. 6, 2014) (“In hindsight, [the plaintiff’s] validity argument was certainly not a winning
position, but the disputes between the parties over invalidity and related claim construction
questions were certainly real and substantial. . . . [T]he mere fact that a party makes losing
arguments is not relevant to the awarding of attorney’s fees.”); NexusCard, Inc. v. Brookshire
Grocery Co., Case No. 2:15-cv-961, 2016 WL 6893704, at *3 (E.D. Tex. Nov. 23, 2016) (“Since
Octane, district courts tend to award fees based on substantive weakness when a party fails to
adduce any evidence to support its position or the party advances a position conclusively
contradicted by the evidence.”); Small v. Implant Direct Mfg. LLC, No. 06-683, 2014 WL
5463621, at *3 (S.D.N.Y. Oct. 23, 2014) (“[W]here a party has set forth some good faith
argument in favor of its position, it will generally not be found to have advanced ‘exceptionally
meritless’ claims.”), aff’d, 609 F. App’x 650 (Fed. Cir. 2015).
Neither Octane Fitness nor AdjustaCam stands for the proposition that a party that loses
on an issue (or in the case as a whole) must necessarily pay the opposing party’s fees. See also
SFA Sys., 793 F.3d at 1348 (exceptional case determination depends on the “substantive strength
of the party’s litigating position . . . not the correctness or eventual success of that position”);
DietGoal Innovations LLC v. Chipotle Mexican Grill, Inc., No. 2:12-cv-764, 2015 WL 1284669,
at *5 (E.D. Tex. Mar. 20, 2015) (“In evaluating whether a party has taken unreasonable litigating
positions, it is important to note that the fact that a party’s position does not prevail . . . is
insufficient by itself to warrant an award of fees.”); Trover Grp., Inc. v. Dedicated Micros USA,
Case No. 2:13-cv-1047, 2015 WL 4910875, at *3 (E.D. Tex. Aug. 17, 2015) (same; “Hikvision
must show that Trover’s positions (individually or taken as a whole) were frivolous or
objectively baseless”); Bianco v. Globus Med., Inc., Case No. 2:12-cv-147, 2014 WL 1904228,
at *2 (E.D. Tex. May 12, 2014) (“[T]he fact that the Court ruled against Dr. Bianco on [the
inventorship] issue does not mean that Globus has shown that Dr. Bianco’s claim was frivolous
or otherwise exceptionally meritless.”); EON Corp. IP Holdings LLC v. Cisco Sys., Inc., No. 121011, 2014 WL 3726170, at *5-6 (N.D. Cal. July 25, 2014) (holding that while the plaintiff’s
argument was “quite stretched, such that few patentees would pursue it,” the defendants failed to
establish “that this is the sort of ‘extraordinary’ case requiring fee-shifting”).
After considering the totality of the circumstances, the Court has concluded that this case
does not satisfy the high standard that the Supreme Court adopted in Octane Fitness for the
award of attorney fees in patent cases. UroPep’s motion for an award of attorney fees for its
work on its claim of infringement (following the Court’s February 2017 summary judgment
order) and for its work in responding to Lilly’s defense of anticipation is therefore denied.
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IT IS SO ORDERED.
SIGNED this 18th day of July, 2017.
WILLIAM C. BRYSON
UNITED STATES CIRCUIT JUDGE
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