Court Opinion

ID: 2768955
Source: CourtListenerOpinion
Date Created: 2015-01-12 18:01:04.162004+00
Date Added: 2024-06-11T10:46:15.328737
License: Public Domain

UNITED STATES DISTRICT COURT
                             FOR THE DISTRICT OF COLUMBIA

__________________________________________
                                           )
INTEX RECREATION CORPORATION, )
                                           )
                      Plaintiff,           )
                                           )
              v.                           )          Civil Action No. 04-1785 (PLF)
                                           )
TEAM WORLDWIDE CORPORATION, )
                                           )
                      Defendant.           )
__________________________________________ )

                           MEMORANDUM OPINION AND ORDER

               Plaintiff Intex Recreation Corporation (“Intex”) seeks an award of attorneys’ fees,

costs, and expenses, pursuant to 35 U.S.C. § 285. That statute authorizes courts to award

attorneys’ fees in “exceptional cases.” Specifically, Intex requests all fees and costs incurred

since November 1, 2013 — the date Team Worldwide Corporation (“TWW”) insisted on

proceeding to summary judgment despite having received an adverse claim construction. 1 TWW

maintains that its summary judgment arguments were not meritless and that this case is not the

kind “exceptional case” contemplated by the statute. In the alternative, it maintains that it is

premature to award attorneys’ fees while TWW’s appeal is pending. Upon careful consideration

       1
                 In its motion, Intex requests oral argument. See Mot. at 1. The Court has
concluded that oral argument would not assist it in resolving the pending motion and therefore,
in its discretion, denies Intex’s request for oral argument. See LOC. CIV. R. 7(f).
of the parties’ arguments, the relevant legal authorities, and the pertinent portions of the record in

this case, the Court will grant Intex’s motion. 2

                                        I. BACKGROUND

               The facts of this case, as relevant here, are straightforward. 3 TWW and Intex

manufacture inflatable air mattresses. Intex Rec. Corp. v. Team Worldwide Corp. (“Intex I”),

Civil Action No. 04-1785 (PLF), 2013 WL 5328372, at *2 (D.D.C. Sept. 24, 2013). TWW

claims Intex’s mattresses infringe its United States Patent No. 6,793,469 B2 (“the ‘469

Patent”). See U.S. Patent No. 6,793,469 B2 (filed December 18, 2000). That patent describes an

air mattress comprised of (1) an inflatable body, (2) a socket built in the inflatable body, (3) an

electric pump that includes a pump body and an air outlet, and (4) a battery case. See ‘469

Patent col.1 ll.30-35 (Summary of the Invention); id. at col.7 ll.24-35, col.8 ll.24-col.9 ll.60

(Claims).

               Among other aspects, Intex’s mattresses have open cavities into which the electric

pump components are fastened with screws. Intex Rec. Corp. v. Team Worldwide Corp.

(“Intex II”), Civil Action No. 04-1785 (PLF), 2014 WL 906105, at *4. Substantial disassembly

is required to remove the pump compenents from the mattress. Id. Therefore, because “a

[patent] claim is not infringed unless every element thereof is met in the accused
       2
                Relevant papers reviewed by the Court with respect to this matter include: the
joint status report of November 1, 2013 (“Jt. Status Rpt.”) [Dkt. No. 209]; Intex’s motion for
fees, costs, and expenses (“Mot.”) [Dkt. No. 230]; Intex’s supplemental brief in support of its
motion for fees (“Supp. Mot.”) [Dkt. No. 234]; TWW’s opposition to Intex’s motion for fees,
costs, and expenses (“Opp.”) [Dkt. No. 235]; and Intex’s reply in support of its motion for fees,
costs, and expenses (“Reply”) [Dkt. No. 236].
       3
               For greater detail, see the Court’s September 24, 2013 Opinion and Order on
claim construction and its March 10, 2014 Opinion on summary judgment. See Intex Rec. Corp.
v. Team Worldwide Corp. (“Intex I”), Civil Action No. 04-1785 (PLF), 2013 WL 5328372
(D.D.C. Sept. 24, 2013); Intex Rec. Corp. v. Team Worldwide Corp. (“Intex II”), Civil Action
No. 04-1785 (PLF), 2014 WL 906105 (D.D.C. Mar. 10, 2014).
                                                    2
device,” Markman v. Westview Instruments, Inc., 52 F.3d 967, 1000 (Fed. Cir. 1995), whether

that cavity constituted a “socket,” as that term was used in the ‘469 patent, was a crucial, and

potentially dispositive, question.

               TWW argued that “socket,” as used in the ‘469 Patent, meant “an opening or

hollow that forms a holder for something.” See Jt. Statement of Disp. Claim Terms and Phrases

at 3 [Dkt. No. 138]; Def.’s Mot. for Claim Constr. Ex. A at 1 [Dkt. No. 140]. Intex, on the other

hand, argued that “socket” meant “a structure that fits and holds onto an inserted part . . . so that

the structure and the part are detachably connected to each other.” Pl.’s Claim Constr. Br. at 19,

26 [Dkt. No. 141]. Magistrate Judge Robinson adopted TWW’s definition, Intex I at *3, but this

Court rejected her construction of the term “socket.” See id. at *7.

               Reviewing Magistrate Judge Robinson’s construction de novo, this Court first

determined that the claim language itself did not compel adoption of one party’s construction

over the other. Intex I at *8. Looking to the patent’s specification and prosecution history, the

Court rejected TWW’s broad construction. Id. at *9-13. The Court instead adopted Intex’s

construction and concluded that the term ‘socket’ is construed as “a structure that fits and holds

onto an inserted part, so that the structure and the part are detachably connected to each other,”

“such as a light bulb socket, or an electric socket.” Id. at *7.

               After this Court adopted Intex’s narrow construction, Intex proposed that TWW

stipulate to non-infringement — because the accused mattresses clearly lack a “socket” under the

Court’s construction — and pursue an immediate appeal. See Jt. Status Rpt. at 2-3 (Intex’s

Proposed Schedule). Noting that “claim construction in this case is likely dispositive of

infringement,” the parties notably “d[id] not dispute any relevant facts regarding the accused

product,” id. at 2, and had agreed that a finding of infringement likely depended on whether the

                                                  3
accused products contained a “pump body” and a “socket,” as those terms are used in the ‘469

patent. Intex I at *2 (citing Def.’s Mem. in Supp. Mot. Claim Constr. and Partial Summary

Judgment at 1, 10 [Dkt. No. 102-2]; Pl.’s Obj. to Magistrate Judge’s Mar. 28, 2008 Order at 18-

19 [Dkt. No. 147]). TWW refused to stipulate. See Jt. Status Rpt. at 3-4 (TWW’s Proposed

Schedule).

                The parties then filed cross-motions for summary judgment. Intex II at *1. But

the Court found that TWW’s arguments had “fatal problems,” id. at *5; “ma[d]e no sense,” id. at

*6; were “virtually identical” to previously rejected arguments, id. at *7, *11; “directly

contradicted . . . the patent specification,” id. at *10; and relied on an interpretation of the first

embodiment that was “plainly incorrect.” Id. at *11. Moreover, TWW relied on an expert

opinion that lacked explanation and “rest[ed] on an incorrect claim interpretation.” Id. at *9

(internal quotation marks omitted) (citation omitted); see generally id. (regarding lack of analysis

for expert’s unsupported conclusion). The Court therefore denied TWW’s motion for summary

judgment and granted Intex’s. Id. at *11.

                Intex now moves for an award of attorneys’ fees, expenses, and costs incurred

after TWW refused to stipulate to non-infringement pursuant to 35 U.S.C. § 285. Supp. Mot.

at 1. In opposing the motion, TWW argues, among other things, that (1) its arguments were not

“exceptionally meritless” because the Court’s construction of the term “socket” was ambiguous,

Opp. at 8-10; and, in the alternative, that (2) it is premature for the Court to award attorneys’ fees

in this case because TWW has appealed both this Court’s construction of the term “socket” and

                                                    4
its findings of non-infringement. Id. at 10-11. 4 The Court is not persuaded by either argument

and will grant Intex’s motion.

                                    II. LEGAL STANDARDS

               Section 285 of the Patent Act provides that a court “in exceptional cases may

award reasonable attorney fees to the prevailing party.” 35 U.S.C. § 285. Until recently, “the

Federal Circuit had limited fee shifting to cases in which the prevailing party demonstrated, by

clear and convincing evidence, either (1) litigation misconduct; or (2) that the litigation was both

objectively baseless and brought in subjective bad faith.” Small v. Implant Direct Mfg. LLC,

No. 06 Civ. 683(NRB), 2014 WL 5463621, at *2 (S.D.N.Y. Oct. 23, 2014) (citing Brooks

Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378, 1381-82 (Fed. Cir. 2005), abrogated

by Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014)). That test’s

first prong required “willful infringement, fraud or inequitable conduct in procuring the patent,

misconduct during litigation, vexatious or unjustified litigation, conduct that violates Fed. R.

Civ. P. 11, or like infractions.” Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d at

1381. Absent such misconduct, a party could recover fees under the second prong for baseless

and bad faith litigation, which was considered an “exacting standard.” iLOR, LLC v. Google,

Inc., 631 F.3d 1372, 1377 (Fed. Cir. 2011).

               The Supreme Court, however, recently roundly rejected the Brooks Furniture test

as “overly rigid” and “so demanding that it would appear to render § 285 largely

superfluous.” Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. at 1756, 1758.

       4
                TWW also offers a laundry list of facts it believes show “[t]he issues in this case
do not even approach the level of being ‘exceptionally meritless . . . .’” Opp. at 6. Most are
irrelevant, such as the number of pages of the Court’s summary judgment opinion, or the fact
that TWW offered an expert supporting its arguments. Id. In any event, the Court disagrees.

                                                  5
The Court held that, under Section 285, “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. at 1756. “District courts may determine whether a case is ‘exceptional’ in the

case-by-case exercise of their discretion, considering the totality of the circumstances.” Id. 5 In

exercising that discretion, courts may consider, among other factors, “frivolousness, motivation,

objective unreasonableness (both in the factual and legal components of the case) and the need in

particular circumstances to advance considerations of compensation and deterrence.” Id. at 1756

n.6. (citation omitted). Finally, the Court held that a prevailing party need only establish its

entitlement to fees under Section 285 by a preponderance of the evidence — rather than by clear

and convincing evidence as required under Brooks Furniture. Id. at 1758. “[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.” Small v. Implant Direct Mfg. LLC, No. 06 Civ.

683(NRB), 2014 WL 5463621, at *3. Conversely, courts have awarded attorneys’ fees under

Section 285 where a party advances arguments that are particularly weak and lack support in the

record or seek only to re-litigate issues the court has already decided. See Cognex Corp. v.

Microscan Sys., Inc., No. 13-CV-2027 JSR, 2014 WL 2989975, at *4 (S.D.N.Y. June 30, 2014).

                                         III. DISCUSSION

               This Court’s claim construction foreclosed any reasonable argument that Intex’s

mattresses infringed the ‘469 patent. Put another way, no reasonable litigant would argue that

       5
               In a decision issued the same day, the Supreme Court underscored this discretion
by holding that “the determination whether a case is ‘exceptional’ under § 285 . . . is to be
reviewed [by a court of appeals] only for abuse of discretion.” Highmark, Inc. v. Allcare Health
Mgmt. Sys., Inc., 134 S. Ct. 1744, 1748 (2014) (footnote omitted).

                                                  6
Intex’s product fit the Court’s construction of the term “socket.” But TWW refused Intex’s

proposal to stipulate to non-infringement, while preserving its appeal rights, and instead persisted

towards summary judgment. TWW then filed a conclusory expert report and advanced flawed,

nonsensical, and baseless arguments, which lacked factual support, seeking only to re-litigate

this Court’s construction of the term “socket.” See supra at 4-5. An open cavity requiring

screws clearly does not, as TWW argued at summary judgment, “fit and hold” like a “light bulb

socket.” Nor could such a fixed pump reasonably be described as “detachably connected,” again

as TWW argued at summary judgment. In view of the Court’s claim construction, such

arguments are exceptionally meritless and warrant an award of attorneys’ fees pursuant to

35 U.S.C. § 285. See, e.g., Cognex Corp. v. Microscan Sys., Inc., No. 13-CV-2027 JSR, 2014

WL 2989975, at *4.

               The Court is not persuaded by TWW’s argument that this Court’s original claim

constructions of the terms “socket” and “pump body” were ambiguous. Specifically, TWW

argues that, at summary judgment, this Court (1) “implicitly altered its [original] construction of

‘pump body’ to include the requirement of a housing (thereby precluding the housing from being

a ‘socket’)”; and (2) “implicitly modified its [original] construction of ‘socket’ to include the

requirement of holding in every direction,” the requirement that “the ‘fit and hold’ requirement

cannot be achieved through the use of screws,” and “the requirement that ‘detachably connected’

means via manual effort as opposed to with the aid of a tool.” Opp. at 9-10. TWW, however,

conflates its disagreement with this Court’s claim construction with the existence of ambiguity.

There was no ambiguity. Moreover, in its summary judgment Opinion, the Court merely added

one additional example of a “socket” with a “fit and hold” connection. That single addition,

even if TWW were correct that the claim construction was ambiguous, was not an implicit

                                                  7
modification or alteration of the claim construction. See Reply at 6 (comparing the Court’s

Opinion on claim construction with its Opinion on summary judgment).

                  TWW also argues that it is premature for the Court to award attorneys’ fees in this

case because TWW has appealed both this Court’s construction of the term “socket” and its

findings of non-infringement. Opp. at 10-11. But TWW’s pending appeal is irrelevant to

whether TWW’s infringement arguments at the summary judgment stage were “exceptionally

meritless.”

                                         IV. CONCLUSION

                  For the foregoing reasons, the Court concludes that this is an exceptional case

under 35 U.S.C. § 285 where an award of attorneys’ fees is warranted. It therefore is hereby

                  ORDERED that Intex’s motion for attorneys’ fees is GRANTED; it is

                  FURTHER ORDERED that Intex file a proposed amount for attorneys’ fees and

costs incurred since November 1, 2013 with detailed supporting documentation by January 23,

2015; and it is

                  FURTHER ORDERED that the parties propose a schedule for briefing on the

reasonableness of Intex’s proposed fees and costs, if necessary, on or before January 30, 2015.

                  SO ORDERED.

                                                        /s/___________________________
                                                        PAUL L. FRIEDMAN
                                                        United States District Judge
DATE: January 9, 2015

                                                   8