United States District Court, D. North Dakota, Northeastern Division
The University of Manitoba, a Manitoban Body Corporate, Plaintiff,
Draeger Medical, Inc., a Pennsylvania Corporation, Defendant.
MEMORANDUM OPINION AND ORDER DENYING MOTION FOR ATTORNEYS FEES AND COSTS AND MOTION TO STRIKE EXHIBITS A-H
RALPH R. ERICKSON, Chief District Judge.
I. INTRODUCTION AND SUMMARY OF DECISION
Before the Court is Defendant Draeger Medical, Inc.'s ("Draeger") motion for attorney fees and costs and Plaintiff The University of Manitoba's ("U of M") motion to strike exhibits A-H of Draeger's memorandum in support of its motion for fees and costs. Draeger contends this case "the clearest of all possible exceptional' cases" under 35 U.S.C. § 285 and thus it is entitled to an award of approximately $1.6 million in legal fees. The U of M has opposed the motion for attorneys fees and also seeks to strike exhibits that were not attached to the original memorandum.
Because the parties presented two reasonable claim constructions for the term in dispute, this case is not "exceptional" within the meaning of § 285. Draeger's motion is DENIED. The U of M's motion to strike exhibits A-H is DENIED as moot.
The complaint in this action was filed on June 28, 2013. The litigation began with three related patents. It was contentious from its inception. The parties were unable to reach agreements on even basic issues, such as scheduling deadlines or the entry of a consent judgment. By early December 2013, the U of M informed the Court during a status conference of its intention to dismiss the claims regarding two of the patents. On December 20, 2013, the U of M formally moved to dismiss the claims pertaining to U.S. Patent Nos. 5, 941, 841 and 6, 027, 498. The Court dismissed the claims relating to these two patents and reserved ruling on Draeger's claim for attorney fees until the conclusion of the case.
The patent in dispute pertained to an invention directed at varying the flow of biological fluids to an organ during controlled life support conditions. The alleged infringement centered on construction of the term "controlled life support conditions." The U of M, relying on the plain language in the claim, proposed a construction in which the medical life support system is the primary source of biological fluid to an organ. Draeger countered with a proposal based on claim disavowal contained in the prosecution history where the life support system involves no patient breathing effort.
On June 16, 2014, the Court issued its final claim construction order on patent 5, 647, 350 ("the 350 Patent"). The Court's final construction of the term "controlled life support conditions" rendered the U of M's infringement claim untenable. The U of M consented to the entry of judgment and has appealed the Court's claim construction order.
Draeger contends that each of the patent infringement claims asserted by the U of M were fatally flawed because a reasonable investigation would have demonstrated the baseless infringement allegations or invalidity of the patent.
Section 285 of the Patent Act provides that "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." District courts are to exercise their discretion in making the exceptional-case determination. Entitlement to fees under § 285 is governed by a preponderance of the evidence standard.
As recently explained by the United States Supreme Court in Octane Fitness, LLC v. ICON Health & Fitness, Inc., the meaning of "exceptional case" under § 285 is
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.
Under Octane, "a district court may award fees in the rare case in which a party's unreasonable conduct-while not necessarily independently sanctionable-is nonetheless so exceptional' as to justify an award of fees." The litigation need not be both objectively baseless and brought in subjective bad faith to award fees. "[A] case presenting either subjective bad faith or ...