Chaffin v. Braden et al

Filing 91

MEMORANDUM AND ORDER denying 88 Motion for IPR Attorney Fees. Defendant shall recover from Plaintiff attorneys' fees and expenses in the total amount of $229,431.05.(Signed by Judge Nancy F Atlas) Parties notified.(TDR, 4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
VICTORIA DIVISION
MARK N. CHAFFIN,
Plaintiff,
v.
MICHAEL R. BRADEN and
LBC MANUFACTURING,
Defendants.

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September 26, 2016
David J. Bradley, Clerk

CIVIL ACTION NO. 6:14-0027

MEMORANDUM AND ORDER
This patent case is before the Court on the Request for Fees and Non-Taxable
Costs (“Motion for Fees”) [Doc. # 88] filed by Defendants Michael R. Braden and
LBC Manufacturing (“LBC”). Defendants seek to recover their attorneys’ fees and
costs incurred in connection with their Petition for Inter Partes Review (“IPR”).
Plaintiff Mark N. Chaffin filed a Response [Doc. # 89], and Defendants filed a Reply
[Doc. # 90]. The Court has carefully reviewed the record and relevant legal
authorities. Based on this review, the Court denies Defendants’ Motion for Fees
associated with the IPR Petition.
I.

BACKGROUND
Plaintiff Mark N. Chaffin is the inventor and owner of United States Patent No.

6,932,912 (the ’912 Patent), entitled “Wastewater Treatment System of Residential
Septic Systems.” The patent covers a wastewater treatment system in which liquid
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chlorine is continuously drawn from a chlorine supply canister into a storage-mixing
tank containing sewage effluent. Specifically, a pump in the storage-mixing tank
circulates the sewage effluent through a venturi chamber and creates suction which
continuously draws chlorine into the flowing sewage effluent stream, mixing the
chlorine and the sewage effluent.
In April 2014, Chaffin sued Defendants alleging infringement of Claims 7, 20,
21, 22, and 24 of the ’912 Patent. Specifically, Plaintiff alleged that Defendants’
liquid chlorinators “LBC 500” and “LBC-IM” (the “Accused Devices”) infringe these
five claims of the ’912 Patent.
Defendants filed a Petition for IPR, challenging the validity of the asserted
claims. The Patent Trial and Appeal Board (“PTAB”) denied Defendants’ Petition,
finding that they failed to demonstrate “a reasonable likelihood of prevailing with
respect to at least one [of the asserted claims] based on the asserted grounds of
unpatentability.” See PTAB Decision [Doc. # 31-1], p. 16.
Following a Markman hearing, the Court issued a Memorandum and Order on
Claim Construction, and later granted Defendants’ Motion for Summary Judgment on
the issue of non-infringement. Plaintiff filed a Motion to Reconsider, which the Court
denied by Memorandum and Order [Doc. # 79] entered July 26, 2016.

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2

By Memorandum and Order [Doc. # 80] entered August 1, 2016, the Court
found that this was an “exceptional case” pursuant to 35 U.S.C. § 285 and awarded
Defendants their reasonable fees and expenses. The parties agreed that $229,431.05
is a reasonable amount. Defendants filed the pending request for an additional
$50,008.00 in fees and costs associated with their IPR Petition. The request for these
additional fees has been fully briefed and is now ripe for decision.
II.

ANALYSIS
Section 285 of the Patent Act authorizes a district court to award attorney’s fees

in patent cases that the Court deems exceptional. The statute provides that “[t]he court
in exceptional cases may award reasonable attorney fees to the prevailing party.” 35
U.S.C. § 285. The Federal Circuit has interpreted § 285 to allow an award of
expenses as well as fees. See Central Soya Co., Inc. v. Geo. A. Hormel & Co., 723
F.2d 1573, 1578 (Fed. Cir. 1983); Maxwell v. Angel-Etts of California, Inc., 53 F.
App’x 561, 569 (Fed. Cir. Dec. 13, 2002). The award of attorneys’ fees under § 285
should include “those sums that the prevailing party incurs in the preparation for and
performance of legal services related to the suit.” Junker v. Eddings, 396 F.3d 1359,
1365 (Fed. Cir. 2005) (quoting Central Soya Co. v. Geo. A. Hormel & Co., 723 F.2d
1573, 1578 (Fed. Cir. 1983)).

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Defendants argue that they are entitled to recover the fees and expenses
incurred in connection with their IPR Petition, and they cite a number of cases in
which fees have been awarded for IPR or reexamination proceedings. See Motion for
Fees, pp. 6-7. Defendants argue also that the Court should not impose a “bright-line”
rule that success on an IPR Petition is a necessary requirement for recovery of those
fees and expenses under § 285.
The Court agrees that there may be circumstances in which fees incurred in an
unsuccessful IPR proceeding are recoverable under § 285. In the cases cited by
Defendants in which fees were awarded, either the movant prevailed in the IPR or
reexamination proceeding, or the proceeding resulted in rulings that were important
to the court’s final decision in the lawsuit. See, e.g., Deep Sky Software, Inc. v.
Southwest Airlines Co., 2015 WL 11202634 (S.D. Cal. June 1, 2015) (awarding fees
for IPR proceeding in which all asserted claims were found to be invalid); Scott Paper
v. Moore Bus. Forms, Inc., 604 F. Supp. 835, 838 (D. Del. 1984) (awarding fees for
reissue proceeding where the “detailed findings and conclusions reached by the PTO
. . . were crucial to this Court’s final determination”).
In this case, however, Defendants’ IPR Petition was denied and no IPR
proceeding was instituted. No findings or conclusions from the PTAB in its decision
denying the IPR Petition were “crucial” to this Court’s ruling on summary judgment.

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Instead, Defendants obtained summary judgment from this Court on the issue of
noninfringement, not invalidity. Under the circumstances of this case, the Court finds
that the fees and expenses incurred in connection with Defendants’ unsuccessful IPR
Petition were not incurred in the performance of legal services related to the lawsuit.
See, e.g., Brilliant Optical Solutions, LLC v. Comcast Corp., 2015 WL 1476691, *4
(D. Colo. March 27, 2015) (denying fees for preparation of IPR Petition that was not
filed). As a result, the Court declines to award Defendants their IPR fees and
expenses under § 285.
III.

CONCLUSION AND ORDER
Defendants are not entitled under the circumstances of this case to recover

under § 285 the fees and expenses incurred in connection with their unsuccessful IPR
Petition. As a result, it is hereby
ORDERED that Defendants’ Motion for Fees [Doc. # 88] is DENIED. It is
further
ORDERED that Defendants shall recover from Plaintiff their attorneys’ fees
and expenses in the total amount of $229,431.05.
SIGNED at Houston, Texas, this 26th day of September, 2016.

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5

NAN Y F. ATLAS
SENIOR UNI
STATES DISTRICT JUDGE