SportStar Athletics, Inc. v. Wilson Sporting Goods, Co.

Filing 94

ORDER ADOPTING MEMORANDUM AND RECOMMENDATIONS re: 89 Memorandum and Recommendations, 83 Amended MOTION for Attorney Fees. The Court ADOPTS the Magistrate Judge's Memorandum and Recommendation (Doc. 89),OVERRULES Wilsons Objections (Doc. 90), and ORDERS that Defendants Motion for Attorney Fees (Doc. 83) is DENIED. (Signed by Judge Melinda Harmon) Parties notified.(jdav, 4)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
SPORTSTAR ATHLETICS, INC.,
Plaintiff,
VS.
WILSON SPORTING GOODS, CO.,
Defendant.

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June 13, 2018
David J. Bradley, Clerk

CIVIL ACTION NO. 4:15-CV-1438

ORDER ADOPTING MAGISTRATE JUDGE’S MEMORANDUM AND
RECOMMENDATION
Pending before the Court is Defendant Wilson Sporting Goods, Co.’s (“Wilson”)
Amended Motion for Attorney Fees (Doc. 83), in which Wilson seeks to recover the attorneys’
fees it incurred in the above-referenced patent infringement suit from the date of this Court’s
claim construction ruling, and the Magistrate Judge’s Memorandum and Recommendation (Doc.
89), recommending that Wilson’s Motion be denied. Wilson filed timely objections to the
Magistrate Judge’s Memorandum and Recommendation (Doc. 90), arguing that the Magistrate
Judge misstated and misapplied the standard for awarding attorneys’ fees in this instance and its
motion should be granted. Upon review of these documents, the facts, and the relevant law, the
Court adopts the Magistrate Judge’s Memorandum and Recommendation as its own, overrules
Wilson’s objections, and denies Wilson’s Motion for Attorney Fees.
Background and Parties’ Arguments
The Magistrate Judge entered a Memorandum and Recommendation (Doc. 89)
recommending that Wilson’s Motion for Attorney Fees (Doc. 83) be denied.1 Wilson filed
timely objections to the Memorandum and Recommendation, arguing that the Magistrate Judge

1

Please refer to the Memorandum and Recommendation, Doc. 89, for a detailed discussion of the facts and
procedural history of this case.

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“erred by applying a pre-Octane standard of ‘patently frivolous’ to justify an award under 35
U.S.C. § 285.” Doc. 90 at 1. Wilson contends that the proper standard for awarding attorneys’
fees in this case is stated by the Supreme Court in Octane Fitness, LLC v. ICON Health &
Fitness, Inc., 134 S. Ct. 1749 (2014), where it was held that attorneys’ fees are appropriate in
exceptional cases, and an exceptional case is defined as “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.” Id. at 1756.
Further, Wilson argues that the Magistrate Judge erred by concluding that following the
Court’s claim construction ruling, SportStar could still try to show infringement under the
doctrine of equivalents for the “strap splitter” element of its asserted claims. Wilson contends
that at that point, SportStar had an obligation to dismiss its infringement action to avoid further
litigation expense and its failure to do so justifies an award of attorneys’ fees.
Standard of Review
Rulings by a magistrate judge on dispositive matters, such as the motion for attorneys’
fees at issue here, “are mere recommendations subject to de novo review when properly
challenged by the losing party.” Davidson v. Georgia–Pac., L.L.C., 819 F.3d 758, 762 (5th Cir.
2016) (citing 28 U.S.C. § 636(b)(1); FED. R .CIV. P. 72(b)(3)). Accordingly, the Court will
perform a de novo review of the portions of the Memorandum and Recommendation objected to
by Wilson.
Analysis
Defendant Wilson contests the standard applied by the Magistrate Judge to determine
whether attorneys’ fees are appropriate in this case.
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The law states that “[t]he court in

exceptional cases may award reasonable attorney’s fees to the prevailing party.” 35 U.S.C. §
285. “Exceptional” means “‘uncommon,’ ‘rare,’ or ‘not ordinary.’” Octane Fitness, LLC v.
ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 (2014) (citations omitted).

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.” Id. “[F]ees are not awarded
solely because one party’s position did not prevail.” Gaymar Industries, Inc. v. Cincinnati SubZero Products, Inc., 790 F.3d 1369, 1373 (Fed. Cir. 2015).
“District courts may determine whether a case is ‘exceptional’ in the case-by-case
exercise of their discretion, considering the totality of the circumstances.” Octane Fitness, 134 S.
Ct. at 1756. No precise rule or formula applies, but “instead equitable discretion should be
exercised ‘in light of the considerations [the Court has] identified.’” Id. (citing Fogerty v.
Fantasy, Inc., 114 S. Ct. 1023, 1033 (1994)). Parties must prove entitlement to fees by a
preponderance of the evidence. See Octane Fitness, 134 S. Ct. at 1758 (rejecting the Federal
Circuit’s requirement of clear and convincing evidence). A district court’s ruling that a case is
exceptional under § 285 will be reviewed for abuse of discretion. Highmark Inc. v. Allcare
Health Management System, Inc., 134 S. Ct. 1744, 1747 (2014).
This standard, explained by the Supreme Court in Octane, was cited to, explained, and
properly applied by the Magistrate Judge in her Memorandum and Recommendation. See Doc.
89 at 2-3 (“According to the Supreme Court in Octane Fitness. . . ‘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.’”). Reviewing the Memorandum and Recommendation
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de novo, the Court finds that this standard was correctly applied to the facts in this case.
Therefore, Wilson’s objection that the Magistrate Judge used and applied the wrong legal
standard is overruled.
Furthermore, having considered the totality of the circumstances in this case, and there
being nothing in the record to indicate that Sportstar’s claims and arguments were patently
frivolous following the Court’s claim construction rulings, that Sportstar had a bad motive to
pursue its infringement claims following this Court’s claim construction rulings, or that
Sportstar’s conduct in this case was objectively unreasonable, the Court in its discretion
determines that this case should not be considered an exceptional one within the meaning of 35
U.S.C. § 285. The Court overrules Wilson’s second objection.
Thus, after having conducted a careful de novo review, the Court concurs with the
findings of the United States Magistrate Judge. Attorneys’ fees shall not be awarded in this
instance. The Memorandum and Recommendation should be accepted and Wilson’s motion
denied.
Conclusion
Accordingly, the Court hereby
ADOPTS the Magistrate Judge's Memorandum and Recommendation (Doc. 89),
OVERRULES Wilson’s Objections (Doc. 90), and
ORDERS that Defendant’s Motion for Attorney Fees (Doc. 83) is DENIED.
SIGNED at Houston, Texas, this 13th day of June, 2018.
___________________________________
MELINDA HARMON
UNITED STATES DISTRICT JUDGE

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