Case 8:12-cv-00329-AG-JPR Document 475 Filed 03/10/15 Page 1 of 16 Page ID #:23301
`
`UNITED STATES DISTRICT COURT
`FOR THE CENTRAL DISTRICT OF CALIFORNIA
`
`CASE NO. SACV 12-00329 AG (JPRx)
`
`ORDER GRANTING DEFENDANT’S
`MOTION FOR ATTORNEYS’ FEES,
`DKT. NO. 447
`
`)))))))))))))))
`
`UNIVERSAL ELECTRONICS, INC.,
`
`Plaintiff,
`
`v.
`
`UNIVERSAL REMOTE CONTROL,
`INC.
`
`Defendants.
`_________________________________
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Universal Remote Control Exhibit: 1058 Page 000001
`
`

`

`Case 8:12-cv-00329-AG-JPR Document 475 Filed 03/10/15 Page 2 of 16 Page ID #:23302
`
`INTRODUCTION
`
`Exceptional cases are, by definition, the exception. But since Octane’s change in the
`standard, the rule seems to be for prevailing parties to bring an exceptional case motion. This
`case is no exception. But it is exceptional.
`Plaintiff Universal Electronics, Inc. (“UEI” or “Plaintiff”) brought this patent
`infringement suit against its competitor, Defendant Universal Remote Control, Inc. (“URC” or
`Defendant”). After a jury trial on the legal issues and a concurrent bench trial on the equitable
`issues, the Court entered judgment in favor of Defendant. (Dkt. No. 453.) Defendant now
`moves for a determination that it is entitled to its attorneys’ fees, with the dollar amount to be set
`after additional briefing (the “Motion”). (Dkt. No. 447.) Plaintiff opposes the Motion, arguing
`that this was a mine-run case. (Dkt. No. 463.)
`The Court GRANTS the Motion.
`
`BACKGROUND
`
`This is not the first lawsuit between the parties. Plaintiff also sued Defendant on
`November 15, 2000 (“the prior case”). In the prior case, Plaintiff asserted, among others, U.S.
`Patent No. 5,414,426 (“‘426 Patent”), and Defendant argued that prior art invalidated it.
`Plaintiff replied that it could add Paul Darbee as an inventor to the patent, entitling the patent to
`a priority date that predated the alleged prior art. (Trial Ex. 1095 at URCI005385.) But instead
`of doing so, Plaintiff dismissed its claim of infringement of the ‘426 Patent on October 18, 2002
`with prejudice. (Miro Decl., Ex. 17, Dkt. No. 447-5 at 13-21.) In 2004, the parties entered into
`a settlement and license agreement ending the remainder of the prior case. (Haan Decl., Ex. 8,
`Sept. 12, 2013 Hayes Dep., Dkt. No. 176-1 at 7; URCI000303-310.)
`On March 2, 2012, Plaintiff filed this suit, alleging infringement of the ‘426 Patent and of
`U.S. Patent Nos. 5,614, 906 (“‘906 Patent”), 6,587,067 (“‘067 Patent”), and 5,568,367 (“‘367
`Patent”). The ‘067 Patent had expired at the time of the Complaint, so only back damages were
`
`2
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Universal Remote Control Exhibit: 1058 Page 000002
`
`

`

`Case 8:12-cv-00329-AG-JPR Document 475 Filed 03/10/15 Page 3 of 16 Page ID #:23303
`
`at issue as to that patent.
`On July 3, 2012, Plaintiff petitioned the United States Patent and Trademark Office
`(“PTO”) to do what it had said it could do ten years earlier: add Darbee as an inventor in the
`‘426 Patent. (Trial Ex. 21.) Plaintiff’s petition was accompanied by signed declarations from
`Darbee and the three inventors who were named on the patent. (Finkelstein Decl., Ex. 5, Dkt.
`No. 463-7 at 109-119.) On July 31, 2013, the PTO granted Plaintiff’s petition, adding Darbee as
`a named inventor of the ‘426 Patent. (Finkelstein Decl., Ex. 5, Dkt. No. 463-7 at 123.)
`On February 1, 2013, the Court issued a Claim Construction Order that invalidated the
`only relevant claim in the ‘367 Patent, and later denied Plaintiff’s motion for reconsideration of
`that issue. (Dkt. Nos. 60, 79.)
`From February 6, 2013 through February 26, 2013, Defendant filed petitions for inter
`partes review of the ‘426, ‘906, and ‘067 Patents. Defendant then moved to stay the case
`pending inter partes review, but the Court denied that motion. (Dkt. Nos. 63, 78.) Later, the
`Patent Trial and Appeal Board (“PTAB”) declined to institute inter partes review of the ‘906
`Patent and ‘426 Patent, but instituted review of the ‘067 Patent. (Finkelstein Decl., Ex. 1, Dkt.
`No. 463-2 at 3-24; Decision Denying Inter Partes Review, IPR2013-00168, Patent 5,414,426
`(Aug. 26, 2013); Decision Instituting Inter Partes Review, IPR2013-00127, Patent 6,587,067
`(July 16, 2013)). In the inter partes review of the ‘067 Patent, the PTAB determined that claims
`1-6 were unpatentable as obvious under 35 U.S.C. § 103. (Miro Decl., Ex. 25, Dkt. No. 447-6 at
`314-37.)
`In February 2014, the parties each moved for summary judgment on a variety of issues.
`(Dkt. Nos. 159, 161.) Most significantly, the Court granted summary judgment of non-
`infringement of the ‘426 Patent and that no damages were available for the ‘067 Patent due to
`Plaintiff’s failure to comply with the marking requirement, but held that triable issues remained
`concerning the validity of the ‘426 Patent, infringement of the ‘906 Patent, and various defenses.
`(Dkt. Nos. 222, 223.)
`The case proceeded to trial in May 2014, and on May 21, 2014, the jury returned a verdict
`in favor of Defendant. (Dkt. No. 408.) The Court resolved the equitable defenses after post-trial
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`3
`
`Universal Remote Control Exhibit: 1058 Page 000003
`
`

`

`Case 8:12-cv-00329-AG-JPR Document 475 Filed 03/10/15 Page 4 of 16 Page ID #:23304
`
`briefing. (Dkt. No. 435.)
`
`LEGAL STANDARD
`
`The Patent Act provides that “[t]he court in exceptional cases may award reasonable
`attorney fees to the prevailing party.” 35 U.S.C. § 285. In this context, “exceptional” retains its
`ordinary meaning of “‘uncommon, rare, or not ordinary.’” Octane Fitness, LLC v. ICON Health
`& Fitness, Inc., 134 S. Ct. 1749, 1756 (2014). Accordingly, “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. “Section 285 discourages certain ‘exceptional’ conduct by
`imposing the cost of bad decisions on the decision maker.” Cambrian Sci. Corp. v. Cox
`Commc’ns, Inc., __ F. Supp. 3d. __, No. SACV 11-01011 AG, 2015 WL 178417, *1 (C.D. Cal.
`Jan. 6, 2015).
`District courts determine whether a case is “exceptional” on a case-by-case basis,
`“considering the totality of circumstances.” Id. Fees may be awarded where “a party’s
`unreasonable conduct—while not necessarily independently sanctionable—is nonetheless”
`exceptional. Id. at 1757. “A case presenting either subjective bad faith or exceptionally
`meritless claims may sufficiently set itself apart from mine-run cases to warrant a fee award.”
`Id. A party must prove its entitlement to fees by a preponderance of the evidence. Id. at 1758.
`“[A] patentee does not act in good faith if it raises an infringement claim in which ‘no
`reasonable litigant could realistically expect success on the merits.’” GP Indus. Inc. v. Eran
`Indus., Inc., 500 F.3d 1369, 1374 (Fed. Cir. 2007) (citation omitted). “For this reason, proper
`investigation is an important pre-requisite to filing an infringement claim . . . .” JS Prods., Inc.
`v. Kabo Tool Co., No. 2:11–cv–01856 RCJ, 2014 WL 7336063, at *4 (D. Nev. Dec. 22, 2014).
`In the companion case to Octane Fitness, the Supreme Court held that “[b]ecause § 285
`commits the determination whether a case is ‘exceptional’ to the discretion of the district court,
`that decision is to be reviewed on appeal for abuse of discretion.” Highmark Inc. v. Allcare
`
`4
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Universal Remote Control Exhibit: 1058 Page 000004
`
`

`

`Case 8:12-cv-00329-AG-JPR Document 475 Filed 03/10/15 Page 5 of 16 Page ID #:23305
`
`Health Mgmt. Sys., 134 S. Ct. 1744, 1748 (2014). The abuse-of-discretion standard applies to
`“all aspects of a district court’s § 285 determination.” Id. at 1749.
`Federal Rule of Civil Procedure Rule 54(d)(2)(C) provides that “[t]he court may decide
`issues of liability for fees before receiving submissions on the value of services.”
`
`ANALYSIS
`
`The Court analyzes the substantive strength of Plaintiff’s litigating position and Plaintiff’s
`manner of litigating for each of the patents in suit. In reviewing the record, the Court is mindful
`that evidence at trial showed that this litigation was at least in part motivated by Plaintiff’s desire
`for “payback” for Defendant’s successful competition in the marketplace: “We are going to get
`VERY aggressive on this quote. We are going to push URC’s margin and price DOWN. That
`along with the current lawsuit should push them to the brink. This will be payback for Time
`Warner.” (Oct. 4, 2012 email from Plaintiff’s Vice President in charge of U.S. cable remote
`sales, Trial Ex. 1358.)
`
`THE ‘067 PATENT
`
`1.
`
`
`Patentees who make or sell products in the United States may notify the public that the
`product is patented by marking the product with the patent number. 35 U.S.C. § 287. If a
`patentee does not do so, the damages period does not start running until the patentee notifies the
`infringer of the infringement. Id. Compliance with the marking requirement is a question of
`fact, on which the patentee bears the burden of proof. Maxwell v. J. Baker, Inc., 86 F.3d 1098,
`1111 (Fed. Cir. 1996).
`Here, the Court granted summary judgment that Plaintiff failed to comply with the
`marking requirement, so no pre-suit damages were available. (Dkt. No. 222 at 48, 50.) Because
`the ‘067 Patent was expired at the time of suit, no post-suit damages were available, either. (Id.
`at 49.)
`
`5
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Universal Remote Control Exhibit: 1058 Page 000005
`
`

`

`Case 8:12-cv-00329-AG-JPR Document 475 Filed 03/10/15 Page 6 of 16 Page ID #:23306
`
`Whether Plaintiff complied with the marking requirement was a fact uniquely within its
`knowledge. See Sept. 5, 2013 Hr’g Tr., Dkt. No. 116 at 11:5-7 (“At the very least it seems to me
`that you [Plaintiff] should be uniquely in control of information that would demonstrate the time
`periods when you have marked certain products or not.”). Defendant focuses most on Plaintiff’s
`resistance to discovery on the physical remote controls. Plaintiff acknowledges Judge
`Rosenbluth’s observation that Plaintiff’s evidence lacked meaning absent quality control
`documents showing the policies were followed. (Dkt. No. 116 at 100:25-101:17; 102:24-
`103:19; 111:24-112:1.) And Plaintiff acknowledges that it “bore the burden of proving that it
`had marked ‘substantially all’ of its products with the ‘067 patent number in order to be entitled
`to any relief.” (Opp’n 13.)
`But Plaintiff argues that Defendant “could have let UEI’s original, purportedly deficient,
`discovery responses stand and moved for summary judgment on the basis of UEI’s failure of
`proof.” (Id.) Plaintiff further attempts to shift the blame by stating that “[i]ndeed URC did
`move on that basis, but it first chose to take on the additional expense of pressing UEI for as
`much information as possible” causing Plaintiff to acquiesce to “unduly burdensome discovery.”
`(Id.) But Defendant was under no obligation to roll the dice on the evidence that was (1)
`favorable to Plaintiff’s position, but (2) might have been insufficient for Plaintiff to carry its
`burden. Defendant instead properly uncovered, after much resistance from Plaintiff, affirmative
`evidence that Plaintiff had not complied with the marking requirement.
`This issue contributes to a finding that this is an exceptional case on both the strength and
`manner prongs. Substantively, information regarding Plaintiff’s marking policies, procedures,
`and practices was uniquely in Plaintiff’s possession, but Plaintiff either did not adequately
`review this material before filing suit, or filed suit knowing that it had not complied with the
`marking requirement. Plaintiff compounded this by engaging in gamesmanship that made it hard
`to discover and prove the marking failure.
`In October 2013, Plaintiff asserted that it did not maintain samples of the remotes covered
`by the ‘067 Patent. (Opp’n 12-13; Miro Decl., Ex. 7, Oct. 31, 2013 Hayes Dep., Dkt. No. 447-4
`at 736:16-25 (“Most of these probably do not exist anymore.”).) Plaintiff produced illegible
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`6
`
`Universal Remote Control Exhibit: 1058 Page 000006
`
`

`

`Case 8:12-cv-00329-AG-JPR Document 475 Filed 03/10/15 Page 7 of 16 Page ID #:23307
`
`photographs of the remotes. (Rowland Decl., Ex. 47, Dkt. No. 161-6 at 2-8.) Indeed, when the
`photographs were presented at a deposition, Plaintiff’s own witness could not read the markings.
`(Miro Decl., Ex. 6, Sept. 12, 2013 Hayes Dep., Dkt. No. 447-4 at 681:13-683:12; 687:2-24.)
`Defendant had to drag the relevant facts out of Plaintiff in a series of discovery motions. (Id. 8-
`9; Motions to Compel, Dkt. Nos. 109-1, 128-1, 149-4; Stipulation re Motion to Compel, Dkt.
`No. 152.) Only in January 2014, after a motion to compel—later withdrawn based on a
`stipulated order—did Plaintiff produce better pictures and 50 samples of the remotes. (Id.; Dkt.
`No. 153.) In short, the remotes did exist, contrary to Plaintiff’s prior representation. And they
`proved Defendant’s point.
`The substantive and procedural problems concerning the ‘067 Patent are particularly
`troublesome in this case because, due to the patent’s expiration, there was no case at all on the
`‘067 Patent absent compliance with the marking requirement. Therefore, in the light most
`favorable to Plaintiff, its failure to conduct an adequate pre-suit investigation of its own marking
`compliance resulted in all of the work in the case related to the ‘067 Patent being a waste of
`resources. This differs from the ordinary case where post-suit remedies are also available, and
`thus further contributes to the exceptional nature of this case.
`
`2.
`
`THE ‘426 PATENT
`
`2.1
`
`Substantive Strength of Plaintiff’s ‘426 Patent Infringement Claim
`
`2.1.1 Inventorship
`
`During Plaintiff’s prosecution of the ‘426 Patent, the PTO notified Plaintiff on two
`
`separate occasions—January 19, 1993 and June 14, 1993—that, based on Plaintiff’s application
`materials, Paul Darbee was not an inventor on the ‘426 Patent application. (Trial Ex. 2 at
`UEI000056-57, UEI000070-71; Mot. 14-15; Reply 13-14.) Thus, Plaintiff specifically
`submitted inventorship oaths from the named inventors, not including Darbee. (Id.; Dkt. No.
`
`7
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Universal Remote Control Exhibit: 1058 Page 000007
`
`

`

`Case 8:12-cv-00329-AG-JPR Document 475 Filed 03/10/15 Page 8 of 16 Page ID #:23308
`
`463-7 at 109-119.) Nearly 10 years later, during the prior case, Plaintiff suggested to Defendant
`that it could “correct” the inventorship of the ‘426 Patent to include Darbee and thereby claim an
`earlier priority date, thus avoiding certain prior art that Defendant had raised in the prior case.
`(Trial Ex. 1095 at URCI005385.) Yet, Plaintiff did not do so, and instead dismissed the ‘426
`Patent from the prior case. (Miro Decl., Ex. 17, Dkt. No. 447-5 at 13-21.) Plaintiff waited
`another 10 years—20 years after the application—to file a petition with the PTO to correct
`inventorship. (Dkt. No. 463-7 at 109-119.) That was after Plaintiff filed this case.
`The Court previously expressed concern regarding the “troubling ten-year delay between
`the time the inventorship issue was raised and Plaintiff’s petition for correction,” yet Plaintiff
`never offered a justification for the delay. (Dkt. No. 223 at 8.) Plaintiff now hazards that “the
`issue of correcting the inventorship of the ‘426 patent ‘slipped through the cracks’” (Opp’n 8-9
`(quoting Sept. 11, 2013 Hayes Dep., Dkt. No. 386 at 8)) and argues that “[i]nattention is not a
`flattering explanation of UEI’s delay in correcting the inventorship of the ‘426 patent, but it is
`the only one supported by the record.” (Opp’n 9.) It is not clear why Plaintiff believes that to be
`so. The record leaves open numerous explanations, some less benign than inattention.
`Whatever the reason, twenty years of delay contributes to a finding that this case is
`exceptional, because it created—again, in the light most favorable to Plaintiff—a situation where
`Plaintiff could not provide any corroboration of Darbee’s purported inventive contribution,
`either from Plaintiff’s files, from Darbee, or from the named inventors. See Dkt. No. 435 at 9.
`(“The videotaped and live testimony of these two witnesses was damning. When testifying on
`this point, they appeared nervous or combative, and neither could provide any cogent
`explanation for the 10-year delay in seeking correction of inventorship. They had credibility
`issues.”)
`
`2.1.2 Laches
`
`In patent cases, a presumption of laches arises where the patentee delayed in filing suit for
`more than six years after actual or constructive knowledge of the infringement. A.C. Aukerman
`
`8
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Universal Remote Control Exhibit: 1058 Page 000008
`
`

`

`Case 8:12-cv-00329-AG-JPR Document 475 Filed 03/10/15 Page 9 of 16 Page ID #:23309
`
`Co. v. R.L. Chaides Const. Co., 960 F.2d 1020, 1035-36 (Fed. Cir. 1992) (en banc). Plaintiff
`asserted the ‘426 Patent against Defendant in 2000, but dismissed the ‘426 Patent with prejudice
`in 2002. (Dkt. No. 447-5 at 13-21.) Plaintiff then asserted the ‘426 Patent in this case, 12 years
`later.
`
`At summary judgment, the Court held that “[w]hile the undisputed facts are not sufficient
`to grant summary judgment of laches, Plaintiff’s assertion of its patent rights was not a model of
`diligence.” (Dkt. No. 222 at 50.) But after hearing all of the evidence at trial, the Court held
`that Plaintiff had not justified its delay and that Plaintiff did not rebut the presumption of
`prejudice, and that laches thus blocked Plaintiff’s claim. (Dkt. No. 435 at 11.)
`Again, this situation was created by Plaintiff, and in spite of it, Plaintiff inflicted the cost
`of defending against a claim that Defendant infringed the ‘426 Patent.
`
`2.2
`
`Plaintiff’s Litigation Conduct Involving The ‘426 Patent
`
`2.2.1 Inventorship
`
`
`
`The problems with Plaintiff’s conduct regarding the inventorship of the ‘426 Patent go
`beyond Plaintiff’s tardiness in filing its petition with the PTO. Plaintiff filed the petition to
`correct inventorship on July 3, 2012, months into this litigation, but failed to disclose its petition
`at that time to the Court or to Defendant. (Finkelstein Decl., Ex. 5, Dkt. No. 463-7 at 109-119;
`Mot. 16; Reply 14.) Plaintiff then served its initial disclosures on July 17, 2012, and included
`the ‘426 Patent prosecution history—except the petition it had filed only two weeks earlier. (Id.;
`Reply 14-15 (citing Miro Decl, Ex. 9, Dkt. No. 447-4).) Plaintiff submitted a copy of the same
`prosecution history—without the petition—to the Court on December 19, 2012, and did not
`otherwise inform the Court of the petition. (Reply 15; Dkt. No. 50-1.) More inattention,
`perhaps?
`It was not until Defendant petitioned for inter partes review in May 2013 that Defendant
`learned of Plaintiff’s petition. (Brookey Decl., Ex. 3, Dkt. No. 88-1 at 71-72; Mot. 16; Reply
`
`9
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Universal Remote Control Exhibit: 1058 Page 000009
`
`

`

`Case 8:12-cv-00329-AG-JPR Document 475 Filed 03/10/15 Page 10 of 16 Page ID
` #:23310
`
`14-15.) Plaintiff also frustrated Defendant’s inquiry into the inventorship issue. When Plaintiff
`filed its petition for correction in July 2012, Plaintiff represented through sworn declarations to
`the PTO that Darbee had contributed to the invention in the ‘426 Patent. (Finkelstein Decl., Ex.
`5, Dkt. No. 463-7 at 109-119.) Yet, when responding to interrogatories and a motion to compel
`a year later, Plaintiff claimed it did not have specific information regarding Darbee’s inventive
`contribution. (Hurley Decl., Ex. A, B, and E, Dkt. No. 109-2 at 5-10, 25-28, 56-59.) And, even
`at trial, Plaintiff did not provide any relevant information regarding Darbee’s contribution to the
`invention. (Dkt. No. 435 at 9.) Plaintiff should have simply admitted earlier that it did not have
`information corroborating Darbee’s purported inventive contribution.
`Had Plaintiff admitted the deficiency earlier, the parties and the Court could have avoided
`several discovery disputes. For example, the original discovery deadline was August 30, 2013.
`Defendant discovered Plaintiff’s inventorship correction petition in late May 2013, and did not
`receive Plaintiff’s response to requests for production until July 8, 2013. (Dkt. No. 88 at 7-8;
`Brookey Decl., Ex. 4, Dkt. No. 88-1 at 74-110). Although the inventorship issue bore directly
`on Defendant’s invalidity defense, Plaintiff opposed extension of the discovery deadline. (Dkt.
`No. 90.) The Court set a hearing on the issue (Dkt. No. 96) and ultimately extended the deadline
`under a stipulation. (Dkt. No. 105.)
`Similarly, Defendant moved to compel further responses to inventorship interrogatories.
`(Dkt. No. 109.) Plaintiff supplemented its interrogatory responses, but Plaintiff claimed it could
`not provide more detailed responses because Darbee and the other inventors were not within
`Plaintiff’s control, which led to a hearing on the issue. (Id.; Sept. 5, 2013 Hr’g Tr., Dkt. No.
`116.) When Judge Rosenbluth asked why Plaintiff “couldn’t have simply asked [Mr. Darbee or
`the other inventors] if they remember what their role was and what exactly they did,” Plaintiff
`responded that Darbee was a third-party—even though Darbee was represented by Plaintiff’s
`counsel at his deposition the very next day, and even though Darbee cooperated with Plaintiff in
`submitting the petition for correction. (Sept. 5, 2013 Hr’g Tr., Dkt. No. 116 at 9:13-16; 12:23-
`13:3, 13:5-25; 17:2-4.) Judge Rosenbluth characterized Plaintiff’s discovery conduct as
`“playing games” on this point, and determined that Plaintiff’s position was “just not credible.”
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`10
`
`Universal Remote Control Exhibit: 1058 Page 000010
`
`

`

`Case 8:12-cv-00329-AG-JPR Document 475 Filed 03/10/15 Page 11 of 16 Page ID
` #:23311
`
`(Sept. 5, 2013 Hr’g Tr., Dkt. No. 116 at 34:2-3. 17-25.) Accordingly, the Court ordered Plaintiff
`to produce more complete responses. (Dkt. No. 115.)
`Further, knowing that Plaintiff filed suit on a patent that Plaintiff, at least, believed was
`invalid for improper inventorship in its uncorrected form could have affected how Defendant
`and the Court approached the ‘426 Patent. Had the Court known that Plaintiff thought the patent
`needed to be corrected (even if Plaintiff also believed that correction would be forthcoming from
`the PTO), the Court might have stayed the case as to the ‘426 Patent until all PTO issues were
`resolved, or might have focused the litigation on that issue earlier. Had Defendant known about
`the correction, Defendant might have approached its defense differently. For example, in the
`absence of the correction, Defendant prepared a prior art defense that relied on the priority date
`without Darbee as an inventor. (Brookey Decl., Ex. 2, Dkt. No. 88-1 at 12-69; Mot. 16-17.)
`After the Defendant discovered the petition, Defendant had to re-file its invalidity contentions
`after performing additional prior art searching. (Mot. at 17.)
`Thus, Plaintiff’s litigation conduct concerning the inventorship issue contributes to the
`finding that this is an exceptional case.
`
`2.2.2 Laches
`
`In 2010 and 2012, Defendant sent Plaintiff letters putting Plaintiff on notice that
`Defendant would assert a laches defense regarding the ‘426 Patent. (Reply 10 (citing Trial Exs.
`1102 and 1104); Miro Decl., Ex. 17, Dkt. No. 447-5 at 248.) Despite this notice, Plaintiff
`asserted the ‘426 Patent without providing any justification for its delay. (Id.) Such justification
`was uniquely in Plaintiff’s control. Plaintiff’s assertion of the ‘426 Patent despite a lengthy and
`unexplained lapse in time contributes to finding that this case is exceptional.
`
`3.
`
`THE ‘367 PATENT
`
`Defendant argues that Plaintiff’s ‘367 Patent infringement claim was meritless and should
`
`11
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Universal Remote Control Exhibit: 1058 Page 000011
`
`

`

`Case 8:12-cv-00329-AG-JPR Document 475 Filed 03/10/15 Page 12 of 16 Page ID
` #:23312
`
`never have been asserted because Plaintiff knew, or should have known, at the outset of the
`litigation that the asserted means-plus-function claim was invalid. (Mot. 19.) Defendant
`contends that Plaintiff’s assertion of claim 4 of the ‘367 Patent became especially meritless
`given the Court’s claim construction order on February 1, 2013. (Id.; Dkt. No. 60.) And,
`Defendant asserts that Plaintiff’s conduct was even more egregious because Plaintiff brought a
`motion for reconsideration on the same point which the Court denied (Dkt. Nos. 69, 79). (Id.)
`Plaintiff responds that in its claim construction briefing, it “identified references in the
`specification to a ‘lighting circuit’ as the relevant structure and cited cases in which similar
`‘circuit’ language has been held to be structural.” (Opp’n 6; ‘367 Patent 3:48-52.) Accordingly,
`Plaintiff argues that “[t]he mere fact that the Court did not find these arguments persuasive does
`not render them frivolous,” and that they “presented non-frivolous arguments that would have
`preserved the validity of the claims” of the ‘367 Patent. (Id. at 6-7.) Plaintiff does not address
`the propriety of its motion for reconsideration, which the Court held did not meet either the
`procedural or substantive grounds for such a motion. (Dkt. No. 79.)
`The parties agreed that the asserted language of the ‘367 Patent is a means-plus-function
`element governed by 35 U.S.C. § 112(6). (Dkt. No. 60 at 18; Dkt. No. 56 at 7-8.) And, the
`parties agreed that the recited function is “maintaining said light emitting circuit activated for a
`short period of time after depression of said light actuation button.” The Court acknowledged
`that the terms “circuit” and “lighting circuit” have been construed to be structural in some
`instances. But, the Court held that in the context of the ‘367 Patent, “the structure Plaintiff
`identifies is merely a recitation of the function” and does not denote an adequate structure, and
`that the specification did not disclose any structure corresponding to the recited function. (Dkt.
`No. 60 at 15-18.) Thus, the Court held that the means-plus-function language of claim 4 of the
`‘367 Patent, “circuit means maintaining said light emitting circuit activated for a short period of
`time after depression of said light actuation button,” was invalid for indefiniteness. (Id. at 20.)
`The Court does not find Plaintiff’s claim construction briefing to be exceptional as to the
`‘367 Patent. Plaintiff presented a colorable argument and cited valid case law in support.
`Although the Court noted that Plaintiff’s construction did not answer the question presented
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`12
`
`Universal Remote Control Exhibit: 1058 Page 000012
`
`

`

`Case 8:12-cv-00329-AG-JPR Document 475 Filed 03/10/15 Page 13 of 16 Page ID
` #:23313
`
`(Dkt. No. 60 at 19), the Court did not hold that Plaintiff’s argument was frivolous.
`Defendant also argues that it was improper for Plaintiff to petition the Court to reconsider
`its decision based on the Federal Circuit’s ruling in Power Integrations, Inc. v. Fairchild
`Semiconductor Int’l, Inc., 711 F.3d 1348 (Fed. Cir. 2013). (Mot. 19.) It is true that the Court,
`sua sponte, held that Plaintiff’s motion for reconsideration lacked merit. (Dkt. No. 79.) An
`isolated unsuccessful motion for reconsideration would not render a case exceptional, but here, it
`adds somewhat to the pile.
`The Court therefore concludes that Plaintiff’s manner of litigating the ‘367 Patent
`contributes a very small amount to a finding of exceptionality.
`
`4.
`
`THE ‘906 PATENT
`
`Although the jury found that Plaintiff did not prove infringement of the ‘906 Patent,
`losing on that question is not an exceptional event. Plaintiff presented evidence of infringement
`sufficient to survive summary judgment. (Dkt. No. 222.) At trial, Plaintiff presented evidence
`that Defendant’s manuals taught the patented method and that Defendant promoted the accused
`feature. (Opp’n 5; May 8, 2014 Trial Tr., Dkt. No. 417 at 56:14-24; May 14, 2014 Trial Tr.,
`Dkt. No. 420 at 8:24-9:3; 95:15-25.) And Plaintiff did present evidence that the accused method
`was superior to certain non-infringing alternatives. (Trial Tr., Dkt. No. 398-1 at 1291:20-
`1305:22; May 7, 2014 Trial Tr., Dkt. No. 416 at 86:11-87:11.)
`As to the jury’s finding of invalidity of the ‘906 Patent, it is not unusual for a prior art-
`based invalidity defense to prevail. And the ‘906 Patent survived Defendant’s invalidity attack
`on summary judgment. (Dkt. No. 222.)
`Therefore, the strength of Plaintiff’s case and manner of litigating as to the ‘906 Patent do
`not contribute to a finding of exceptionality.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`13
`
`Universal Remote Control Exhibit: 1058 Page 000013
`
`

`

`Case 8:12-cv-00329-AG-JPR Document 475 Filed 03/10/15 Page 14 of 16 Page ID
` #:23314
`
`5.
`
`DEFENDANT’S MANNER OF LITIGATING
`
`Plaintiff argues that the conduct of the winning party is relevant to the totality of the
`circumstances analysis. (Opp’n 16.) “[A] determination of whether a case is ‘exceptional’ may
`include the conduct of the winning party – for example, whether the winning party advanced
`arguments in bad faith or committed litigation misconduct.” (Id. (quoting Stragent, LLC v. Intel
`Corp., 2014 WL 6756304, at *4 (E.D. Tex. Aug. 6, 2014).) Plaintiff argues that Defendant: (1)
`made questionable claim construction arguments, (2) multiplied proceedings by seeking a stay
`based on groundless inter partes review petitions, (3) served excessive requests for admissions,
`and (4) presented unsound defenses and counterclaims. (Id. at 16-17.)
`As to claim construction, both parties’ claim construction arguments—some successful,
`some not—were well within the range of reasonable advocacy. And unlike Plaintiff, Defendant
`did not unsuccessfully move for reconsideration of the claim construction issues it lost.
`Defendant’s motion to stay was likewise typical, and although it was denied, it did not unduly or
`improperly burden Plaintiff. Defendant’s excessive requests for admission were appropriately
`addressed by Judge Rosenbluth’s order holding that Plaintiff needed to admit or deny only six of
`the requests for admission remaining after the court-ordered meet and confer. (Dkt. Nos. 134,
`151.) This was part and parcel of navigating the scope of discovery in this case.
`True, the Court has noted that this case was “over-litigated” by both sides. (Dkt. No.
`362.) But that consideration will be accounted for in the Court’s review—and if Defendant’s
`counsel are wise, in Defendant’s submission—of the fees submitted. And while some of
`Defendant’s defenses and counterclaims did not succeed, Plaintiff has not shown that they
`involved anything like the objective defects found concerning marking of the ‘067 Patent or
`inventorship of the ‘426 Patent that were known in advance to the Plaintiff.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`14
`
`Universal Remote Control Exhibit: 1058 Page 000014
`
`

`

`Case 8:12-cv-00329-AG-JPR Document 475 Filed 03/10/15 Page 15 of 16 Page ID
` #:23315
`
`6.
`
`APPORTIONMENT
`
`In a recent case, this Court awarded Section 285 fees for only a portion of the case.
`Cambrian Sci. Corp. v. Cox Commc’ns, Inc., __ F. Supp. 3d. __, No. SACV 11-01011 AG, 2015
`WL 178417 (C.D. Cal. Jan. 6, 2015). That approach is likewise appropriate in this case. Here,
`there very likely would have been a trial on the ‘906 Patent even had the ‘426 and ‘067 Patents
`never been asserted. And as to the ‘367 Patent, only the motion for reconsideration contributes
`to the exceptional case finding.
`In Octane, the Supreme Court noted “the need in particular circumstances to advance
`considerations of compensation and deterrence.” 134 S. Ct. at 1756 (quoting Fogerty v.
`Fantasy, Inc., 510 U.S. 517, 534, n.19 (1994)). Here, compensation will