DietGoal Innovations LLC v. Chipotle Mexican Grill, Inc., 2:12cv764 (10/14/2014)
Judge: William C. Bryson
Holding: Motion for Sanctions Denied
King Arthur: Now stand aside, worthy adversary.
Black Knight: 'Tis but a scratch.
King Arthur: A scratch? Your arm's off.
Black Knight: No it isn't.
King Arthur: What's that, then?
Black Knight: [after a pause] I've had worse.
Defendant sought sanctions under Rule 11 for the plaintiff's continuance of the case following Judge Payne's claim construction opinion, which it contended made clear that, well, their arm was off.
Judge Bryson began his analysis by rejecting the plaintiffs claim that there was no pleading, written motion, or other paper that it filed with the court following the claims construction ruling, and thus no basis for an argument that its conduct violated Rule 11. He noted that the rule makes clear that "later advocating" a position taken in an earlier written filing can be sanctionable as well.
Nonetheless, he determined that the plaintiff's conduct in continuing to advocate its theory of infringement was not wholly frivolous for two reasons.
First, because the plaintiff could argue on appeal to the Federal Circuit that Judge Payne's claim construction was in fact incorrect. (Editor's Note: In an amazing coincidence, three days after this opinion came out, the Federal Circuit actually held that Judge Payne's claims construction in another case was, in fact, incorrect - see here. Wow. Who could have seen that coming, right? This is why it's so cool to have Federal Circuit judges hearing trial court cases by assignment - they know all this neat stuff about, like, appeals and stuff).
And second, it was not frivolous for the plaintiff to continue to argue that it could prove infringement even under the court's claim construction. While admitting that he was "skeptical" that the plaintiff's interpretation of the claim construction order was correct, the Court was not prepared to say that the plaintiff's position was wholly frivolous. "It is not unusual, following a claim construction order, for the parties to dispute the precise meaning of the order that was entered," Judge Bryson concluded. (Who, us?) "DietGoal's argument that the court's claim construction order was amenable to an interpretation consistent with its theory of infringement was, at minimum, not wholly frivolous, and it might have led the Court to revise or at least further explain the construction of the term 'customized eating goals.'"
Accordingly, the motion for sanctions was denied.
Update: A sharp-eyed reader caught that the claims construction noted above as reversed on October 17 was actually by Judge Payne's predecessor on the Marshall magistrate judge bench, former Judge Chad Everingham.
"Substantial Portion" - a term "commonly understood by lawyers to be “weasel words” ... [whose] meaning is malleable to a point where they mean what the user wants them to mean in any given situation; they have no meaning of their own." Abstrax v. Hewlett-Packard, 2:14cv158 (11/4/14) (Gilstrap, J.). Example: "The Court found that the term "substantial portion" was a phrase that was subject to very different constructions."
For more patent litigation dictionary entries, see here.
Holding: Motion for Attorneys Fees Denied: Costs Granted in Part
In January 2012, Macrosolve filed this action against Newegg alleging patent infringement. In March 2014, Macrosolve filed a motion to voluntarily dismiss its claims against Newegg with prejudice, which the Court granted. Newegg then filed a motion for fees under 35 U.S.C. § 285 and for costs under 28 U.S.C. § 1920.
Exceptional Case Under 35 U.S.C. § 285
Newegg maintained it should be awarded attorneys’ fees because Macrosolve engaged in vexatious litigation and brought objectively baseless claims against Newegg in bad faith. Judge Mitchell reviewed the facts and held that "[e]ven under the new, lower standard for an exceptional case designation, Newegg provides little evidence that this case “stands out from others with respect to the substantive strength of [Macrosolve’s] litigating position” or that it litigated the case in an unreasonable manner," as required by Octane Fitness. Given that the lower standard for 285 was not met, the Court found that the accompanying request for expert fees and other nontaxable expenses did not meet the higher standard required for sanctions under the Court's inherent powers either.
Court Costs Under 28 U.S.C. § 1920
With respect to Newegg's claim for court costs, Judge Mitchell held that there was no justification for the Court to deny Newegg its costs as plaintiff requested, and that Chief Judge Leonard Davis’ “Standing Order Regarding Bills of Costs” which interprets 28 U.S.C. § 1920 after its 2008 amendment guided the Court’s resolution of the parties’ costs disputes. Accordingly, costs for video-recorded depositions, producing electronic documents in an acceptable format, and the technical advisor were recoverable; however, costs for “ASCII transcripts,” “rough drafts,” expedited delivery, and PDF to TIFF conversion were merely incidental and not recoverable under the statute. Newegg was ordered to resubmit its costs request (originally $26,860.95) to reflect the Court's rulings.