UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

Transcription

1 Case :-cv-00-rsl Document Filed 0/0/ Page of UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 0 MEDTRICA SOLUTIONS LTD., Plaintiff, v. CYGNUS MEDICAL LLC, a Connecticut limited liability company, Defendant. Case No. C-RSL ORDER GRANTING MOTION FOR RECONSIDERATION This matter comes before the Court on Medtrica s Motion for Reconsideration of the Court s Denial of its Motion for Attorneys Fees in light of New U.S. Supreme Court Authority Relaxing the Standard for Fee Awards in Patent Cases, dkt. #, in which STERIS Corp. s ( Steris ) joins. On April,, the Court denied Medtrica Solutions Ltd. s ( Medtrica ) and Steris s motion for attorney s fees. Dkt. #. Two weeks later, the Supreme Court issued its decision in Octane Fitness, LLC v. Icon Health & Fitness, Inc., No. -, U.S., S.Ct., WL (April, ), in which it rejected the Federal Circuit s framework governing the award of attorney s fees under U.S.C.. The issue now before the Court is whether attorney s fees should be awarded under based on the less rigid standard announced in Octane Fitness. RECONSIDERATION -

2 Case :-cv-00-rsl Document Filed 0/0/ Page of 0 The Court requested additional briefing from the parties and heard oral argument on July,. Having considered the facts and arguments set forth in the parties memoranda and presented during the hearing, the Court finds the following: DISCUSSION In its order denying an award of fees, the Court applied the framework first announced by the Federal Circuit in Brooks Furniture Mfg., Inc. v. Dutailier Intern., Inc., F.d, (Fed. Cir. 0). The Federal Circuit, in Brooks Furniture, held that a case is exceptional under, and therefore an award of attorney s fees warranted, when there has been some material inappropriate conduct related to the matter in litigation, such as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Fed. R. Civ. P., or like infractions. F.d at. The court explained that in the absence of misconduct in litigation or in securing the patent, a district court may only award fees if the case () is brought in subjective bad faith and () is objectively baseless. Id. Although the court reiterated that the decision to award fees is left to the trial court s discretion, it still required a showing of the prior two elements by clear and convincing evidence. Id. at. In Octane Fitness, the Supreme Court rejected this approach, finding it overly rigid. S.Ct. at. The Court emphasized that [d]istrict courts may determine whether a case is exceptional in the case-by-case exercise of their discretion, considering the totality of circumstances. Id. at. While findings of subjective bad faith and meritless claims are not required, the presence of one or the other may render a case exceptional under. Id. at. There is no precise rule or formula, but district courts may consider factors including frivolousness, motivation, objective unreasonableness... and the need in particular circumstances to advance considerations of compensation and deterrence. Id. at n.. Finally, the Court rejected the RECONSIDERATION -

3 Case :-cv-00-rsl Document Filed 0/0/ Page of 0 Federal Circuit s requirement that patent litigants show entitlement to fees by clear and convincing evidence. The statute requires only that a party show exceptionality by a preponderance of the evidence. Id. at. Before the Federal Circuit s decision in Brooks Furniture in 0, district courts employed a holistic, equitable approach to inquiries which allowed them greater discretion in awarding attorney s fees in patent cases. See id. at. In the years since Brooks Furniture, district courts have been resigned to apply the rigid, mechanical test, allowing the award of fees only where certain criteria were met. Id. It was under this more restrictive framework that the Court found that Medtrica and Steris failed to show by clear and convincing evidence that Cygnus acted in bad faith or that its claims were objectively baseless. Dkt. # at -. In reaching this decision, the Court emphasized that Medtrica and Steris did not meet the high standard for attorney s fees set by the Federal Circuit. Id. at. Under the discretionary, flexible framework endorsed by the Supreme Court, the Court finds that this case is exceptional within the context of. The Court does not alter its previous finding that there was no evidence of bad faith or litigation misconduct. See id. at. Although the extent of the parties efforts to negotiate early in the case is disputed, there is no evidence that Cygnus filed its counterclaims for infringement or continued to pursue litigation in bad faith or that it engaged in misconduct during the litigation. However, contrary to Cygnus s argument, Octane Fitness makes clear that these findings are not required for an award of fees under. Octane Fitness, S.Ct. at. Rather, employing the more flexible approach embraced by the Supreme Court, the Court finds that this case stands out from others with respect to the substantive strength of [Cygnus s] position. Id. at. This is not to say that Cygnus s decisions RECONSIDERATION -

4 Case :-cv-00-rsl Document Filed 0/0/ Page of 0 to file infringement counterclaims and pursue litigation were necessarily objectively baseless. As the Court explained in its previous order, Cygnus s proposed construction of the claims was not entirely frivolous under a clear and convincing standard. Dkt. # at. The Court, however, finds that this case is uncommon based on the absence of evidence supporting Cygnus s theories of infringement at summary judgment. Cygnus had a sample of the accused product and the opportunity to engage in discovery for more than one year before Medtrica and Steris filed their motion for summary judgment of non-infringement. Despite ample time to obtain evidence supporting its theories of infringement, the only evidence Cygnus submitted to support its claims were excerpts from websites purportedly explaining the effects of stress on different materials. See Dkt. # -, Exs. I, J, K. While it is true that Cygnus sought to continue summary judgment to allow time for additional discovery under Fed. R. Civ. P. (d), Cygnus did not identify the specific facts that additional discovery would reveal or explain how those facts would defeat summary judgment. Dkt. # at -. Cygnus argued that Medtrica and Steris withheld documents and information about the design and manufacturing process of the accused products, but, as the Court noted, there were no motions to compel pending at the time. Id. at -. Based on Cygnus s failure to produce any evidence supporting infringement, despite ample opportunity to obtain supporting evidence, the Court, in its discretion, GRANTS Medtrica s and Steris s motion for reconsideration. Having determined that this case is exceptional under and that fees are warranted, the Court must determine the amount of fees that should be awarded. See Eon-Net LP v. Flagstar Bancorp, F.d, - (Fed. Cir. ). The amount of the award is within the Court s discretion, but the award must be reasonable. Lam, Inc. v. Johns-Manville Corp., F.d 0, 0 (Fed. Cir. ). In determining RECONSIDERATION -

5 Case :-cv-00-rsl Document Filed 0/0/ Page of 0 the reasonableness of the award, there must be some evidence to support the reasonableness of... the billing rate charged and the number of hours expended. Id. Counsel for Medtrica and Steris have submitted declarations and a chart summarizing the total number of hours worked on this matter and their billing rates, dkt. # ; dkt. #, but the Court cannot determine a reasonable amount of fees based on this limited information. See Junker v. Eddings, F.d, - (reversing award of attorney s fees where the record lacked the kind of evidence usually analyzed in determining a reasonable attorney fee: hourly time records, full expense statements, documentation of attorney hourly billing rates in the community for the particular type of work involved, the attorney s particular skills and experience, and detailed billing records or client s actual bills showing tasks performed in connection with the litigation. ). Thus, Medtrica and Steris shall file a motion for reasonable attorney s fees and include supporting documents itemizing the fees and costs incurred in defending against Cygnus s infringement claims, including hourly billing records itemizing the tasks performed. CONCLUSION For all of the foregoing reasons, Medtrica s motion for reconsideration (Dkt. # ) is GRANTED. Medtrica and Steris shall, within days of the date of this order, file a motion for reasonable attorney s fees and note it for consideration on the Court s Medtrica and Steris have offered to make their invoices available for in camera inspection. Dkt. # at n.. Local Civil Rule (g) governs the sealing of court records and requires parties to explore all alternatives to filing a document under seal. There is no presumption that the billing records or invoices are privileged and should be reviewed in camera. See MGIC Indem. Corp. v. Weisman, 0 F.d 00, 0 (th Cir. ) ( No reason appears why the timesheets should not have been made available to [the plaintiff] and [the plaintiff] given an opportunity to challenge them. ). Cygnus should have access to the billing records so that it may raise specific objections to the records. Thus, the records should be redacted only to the extent absolutely necessary to protect information covered by the attorneyclient privilege or the work-product doctrine. Id. RECONSIDERATION -

6 Case :-cv-00-rsl Document Filed 0/0/ Page of calendar pursuant to Local Civil Rule (d). Cygnus may file an opposition to the motion and Medtrica and Steris may file a reply pursuant to Local Civil Rule (d)(). DATED this th day of July,. A Robert S. Lasnik United States District Judge 0 RECONSIDERATION -