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Trustees of Boston University v. Everlight Electronics Co., Ltd.

United States District Court, D. Massachusetts

July 22, 2016

TRUSTEES OF BOSTON UNIVERSITY, Plaintiff,
v.
EVERLIGHT ELECTRONICS CO., LTD., et al., Defendants. TRUSTEES OF BOSTON UNIVERSITY, Plaintiff,
v.
EPISTAR CORPORATION, et al., Defendants. TRUSTEES OF BOSTON UNIVERSITY, Plaintiff,
v.
LITE-ON INC., et al., Defendants.

          MEMORANDUM AND ORDER

          Patti B. Saris, Chief United States District Judge

         INTRODUCTION

         In November 2015, a jury found that Defendants Epistar, Everlight, and Lite-On infringed U.S. Patent No. 5, 686, 738 and awarded Plaintiff Trustees of Boston University (BU) $13, 665, 000 in damages. BU now moves for an award of attorneys’ fees, expert witness fees, and costs. In total, BU seeks more than $11 million: $9, 359, 276 in attorneys’ fees, $1, 188, 220 in expert fees, and $1, 084, 058 in costs. BU offers two primary bases for its proposed award: that Epistar and Everlight willfully infringed the ’738 patent, and that all three defendants engaged in litigation misconduct. Defendants reject BU’s contention that their litigation positions were factually and legally unsupported, argue that the case was reasonably litigated, and assert that BU’s own litigation misconduct precludes a fee award in BU’s favor. After hearing, the Court ALLOWS in part and DENIES in part BU’s motion for fees and costs (Docket No. 1732).

         DISCUSSION

         I. Attorneys’ Fees A. Legal Standard

         Under 35 U.S.C. § 285, the court “in exceptional cases may award reasonable attorney fees to the prevailing party.” 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.” Octane Fitness LLC v. ICON Health & Fitness, Inc., 134 S.Ct. 1749, 1756 (2014). “Section 285 demands a simple discretionary inquiry; it imposes no specific evidentiary burden, much less a high one.” Id. at 1758; see also Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S.Ct. 1744, 1748 (2014) (“[T]he determination whether a case is ‘exceptional’ under § 285 is a matter of discretion.”).

         “There is no precise rule or formula for making these determinations.” Octane Fitness, 134 S.Ct. at 1756 (internal citation and alteration omitted). However, factors supporting a finding of exceptionality include “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 (quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994)). “[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. at 1757.

         “Litigation misconduct and unprofessional behavior may suffice, by themselves, to make a case exceptional under § 285.” Rambus Inc. v. Infineon Techs. AG, 318 F.3d 1081, 1106 (Fed. Cir. 2003). “In cases deemed exceptional only on the basis of litigation misconduct, however, the amount of the award must bear some relation to the extent of the misconduct.” Id. An award of “attorney fees under section 285 should be tailored by a court to the situation before it.” Power Mosfet Techs., LLC v. Siemens AG, 378 F.3d 1396, 1415 (Fed. Cir. 2004). “[T]he award of the total amount of a fee request is unusual.” Takeda Chem. Indus., Ltd. v. Mylan Labs., Inc., 549 F.3d 1381, 1390 (Fed. Cir. 2008).

         “[A] finding of willful infringement does not require a finding that a case is exceptional, ” though “the willfulness of the infringement by the accused infringer may be a sufficient basis in a particular case for finding the case ‘exceptional’ for purposes of awarding attorney fees.” Golight, Inc. v. Wal-Mart Stores, Inc., 355 F.3d 1327, 1340 (Fed. Cir. 2004) (internal citations and quotation marks omitted); see also Veracode, Inc. v. Appthority, Inc., 137 F.Supp. 3d 17, 99 n.56 (D. Mass. 2015) (“The majority of the case law after Octane Fitness . . . makes clear that a totality test still governs, and that willfulness is a relevant but not dispositive consideration.”). “Although an attorney fee award is not mandatory when willful infringement has been found, precedent establishes that the court should explain its decision not to award attorney fees.” Spectralytics, Inc. v. Cordis Corp., 649 F.3d 1336, 1349 (Fed. Cir. 2011).

         B. Analysis

         BU argues that it is entitled to attorneys’ fees under 35 U.S.C. § 285 because Everlight and Epistar willfully infringed the ’738 patent, and because the defendants engaged in vexatious litigation tactics and discovery misconduct. Defendants concede that Everlight provided BU with incomplete or inaccurate sales data and ask the Court to limit any fee award to those fees incurred as a result of this misconduct. Defendants assert that there is otherwise no evidence that they litigated the case unreasonably. Defendants also counter that their legal arguments had merit, that BU failed to meet its burden to show that its fees are reasonable, and that BU engaged in its own litigation misconduct. Defendant Lite-On additionally argues that it should not be considered for an award of fees and costs because it was a prevailing party under Federal Rule of Civil Procedure 68 and because the plaintiff did not contend that Lite-On willfully infringed the ’738 patent.

         First, most of the defendants’ litigation positions had merit. In determining whether a case is exceptional under § 285, the court must examine the “‘substantive strength of the party’s litigating position, ’” “not the correctness or eventual success of [that] position.” SFA Sys., LLC v. Newegg, Inc., 793 F.3d 1344, 1348 (Fed. Cir. 2015) (emphasis in original) (quoting Octane Fitness, 134 S.Ct. at 1756). “A party’s position on issues of law ultimately need not be correct for them to . . . be found reasonable.” Id.

         Factual and legal support existed for both parties’ positions on the central issues of this litigation. On infringement, the Court denied both parties’ motions for summary judgment. Trs. of Boston Univ. v. Everlight Elecs. Co., 105 F.Supp.3d 116 (D. Mass. 2015). In denying the defendants’ motion for judgment as a matter of law on the issue of invalidity, the Court noted that both parties presented strong arguments in support of their respective positions as to whether the patent was adequately enabled, particularly with respect to the amorphous buffer layer. On damages, defendants reasonably opposed a damages award on the plaintiff’s design-win theory.[1] As well, the defendants ultimately prevailed on their post-trial argument that the evidence does not support the lump-sum damages awards against Epistar and Everlight. For the most part, the defendants’ contentions were not patently unsupportable so as to justify a full award of attorneys’ fees.

         Second, the defendants’ litigation conduct-with two critical exceptions discussed below-was not unreasonable. While counsel on both sides were aggressive and at times uncivil, that is unfortunately true in many patent cases. Here, both sides tangoed. Considering the totality of the ...


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