United States District Court, D. Massachusetts
ORDER ON DEFENDANTS' MOTIONS FOR AN EXCEPTIONAL
CASE DETERMINATION AND ATTORNEYS' FEES
Dennis Saylor, IV United States District Judge.
was a case for patent infringement. Plaintiff Datatern, Inc.
sued twenty-three defendants in twenty-two separate lawsuits
in this District for infringement of U.S. Patent 6, 101, 502,
titled “Object Model Mapping and Runtime Engine for
Employing Relational Database with Object Oriented
Software.” After almost six years, plaintiff's
counsel withdrew from the representation. As plaintiff was
unable to retain substitute counsel within a reasonable time,
the case was dismissed for failure to prosecute.
MicroStrategy and the six other remaining defendants have
filed motions to recover their attorneys' fees and expert
fees pursuant to 35 U.S.C. § 285. For the reasons set
forth below, those motions will be granted in part and denied
is the owner of U.S. Patent No. 6, 101, 502 (the
“'502 patent”). The inventors of the '502
patent filed the utility application on September 25, 1998,
claiming priority to provisional application number 60/069,
157 (filed on December 9, 1997), and provisional application
number 60/059, 939 (filed on Sept. 26, 1997). The U.S. Patent
and Trademark Office issued the patent on August 8,
invention claimed in the '502 patent facilitates
interaction between two popular systems for organizing
computerized data: object-oriented software applications and
relational databases. ('502 patent, col. 1 ll. 22-24).
Object-oriented software applications encapsulate information
in a collection of discrete “objects” that
correspond to “classes, ” which define the type
of object. (11-cv-11970, ECF 130-1 ¶¶ 20, 22). For
example, an object-oriented software application for a
human-resources department might contain the class
“employee, ” which corresponds to objects
representing particular employees such as “Jane
Brown.” The object might contain attributes concerning
Jane's employment, such as her wage rate and scheduled
hours. Relational databases organize information into rows
and columns, with each column representing an attribute and
each row representing an instance of those attributes.
(Id. ¶ 29). To use the same example, the
database would display a table with columns containing
information about employees' wages and hours, and rows
representing a particular employee, such as Jane. The
so-called “object-relational mismatch” arises
because of different assumptions and approaches underlying
the two systems. (Id. ¶ 35).
'502 patent addresses the mismatch by generating
intermediaries to translate between the systems, making the
interaction easier and more reliable. (Id.
¶¶ 42-43). Representative Claim 1 reads:
A method for interfacing an object oriented software
application with a relational database, comprising the steps
selecting an object model;
generating a map of at least some relationships between
schema in the database and the selected object model;
employing the map to create at least one interface object
associated with an object corresponding to a class associated
with the object oriented software application; and
utilizing a runtime engine which invokes said at least one
interface object with the object oriented application to
access data from the relational database.
patent col. 7 l. 51-col. 8 l.3.
contended that MicroStrategy's Business Intelligence
Platform infringes the '502 patent, and that the
infringement extended to MicroStrategy's customers, at
least some of whom are consolidated defendants in this case.
November 7 and 8, 2011, DataTern filed eight lawsuits against
eight different defendants, all customers of MicroStrategy,
alleging infringement of the '502 patent. All of those
cases except that against Blazent, Inc., were voluntarily
dismissed by DataTern after six weeks.
thereafter, on November 15, 2011, DataTern filed nine more
lawsuits against ten more customers of MicroStrategy, again
alleging infringement of the '502 patent. Five of those
cases-those not assigned to Judge Stearns-were voluntarily
dismissed by DataTern within a few months.
on December 14, 2011, DataTern filed similar complaints
against four other MicroStrategy customers and MicroStrategy
itself. It marked all these cases as “related” to
one of the November 15 suits before Judge Stearns, and all
five were thus assigned to Judge Stearns.
February 23, 2012, MicroStrategy filed a motion to intervene
and stay in the then- pending cases against its customers
before Judge Stearns, on the theory that the case against it
would be all but dispositive as to the cases against its
customers. (e.g., No. 11-cv-12024, ECF 12).
February 24, 2012, Judge Stearns entered an order
consolidating those nine cases and naming No. 11-cv-12220,
that against MicroStrategy, as the lead case. He then denied
the motion to intervene and stay as moot. At that time, the
case naming Blazent as the defendant was not yet
consolidated. The Court entered a scheduling order on March
21, 2012, and gave DataTern a deadline of June 1, 2012, to
indicate whether it intended to pursue claims of infringement
against MicroStrategy's customers separate from their use
of MicroStrategy's software.
months later, on April 26, 2012, DataTern filed a notice with
the Court explaining that it did not intend to pursue claims
of patent infringement against MicroStrategy's customers
that were unrelated to their use of MicroStrategy's
software, and moved to voluntarily dismiss those claims
without prejudice pursuant to Fed.R.Civ.P. 41(a). (No.
11-cv-12220, ECF 42). Five of MicroStrategy's customers
opposed the dismissal and cross-moved for summary judgment,
arguing that because DataTern had not filed infringement
contentions on the customer claims in accordance with the
Court's scheduling order, it had waived those claims and
they should be dismissed with prejudice. (No.
11-cv-12220, ECF 45). That motion also requested that all
claims against MicroStrategy's customers should be stayed
until the claims between MicroStrategy and DataTern were
10, 2012, MicroStrategy moved for judgment on the pleadings
on the ground that the patent was drawn to patent-ineligible
subject matter. (11-cv-12220, ECF 43).
25, 2012, MicroStrategy moved to compel DataTern to produce
adequate infringement contentions. Judge Stearns granted that
motion in part and denied it in part, requiring DataTern to
provide amended contentions that “clearly identif[ied]
the accused products (or combinations of products) that is
alleged to infringe each asserted claim, and where each
asserted claim element is found within each accused product
or combination and supporting evidence” but explaining
that “[a]t this preliminary stage, it is not necessary
for plaintiff to provide highly detailed or ultimately
successful contentions” and that “[p]laintiff is
not required to know or disclose all possible theories of
infringement at this point, and may uncover and disclose
additional theories of infringement in the course of
discovery.” (No. 11-cv-12220, Electronic Order, July 2,
2012). DataTern filed amended contentions on July 20, 2012.
(No. 11-cv-12220, ECF 72).
5, 2012, Judge Stearns denied the customers' motion for
summary judgment and allowed the dismissal of the claims
without prejudice. As to the motion to stay, he explained
that “the court will not entertain inefficient and
duplicative multiple proceedings, and will stay the cases
against the customer-defendants if and only if every
customer-defendant agrees to be bound by the adjudication as
to liability as to MicroStrategy.” (11-cv-12220,
Electronic Order, July 5, 2012). In the next few weeks, all
the customer-defendants agreed to be so bound, and the case
as to them was stayed on July 17.
Stearns denied MicroStrategy's motion for judgment on the
pleadings on July 31, 2012, without prejudice to its renewal
after claim construction, explaining that “the
patentability issue in this case turns on the significance of
certain claim elements” and that it would be prudent to
construe the claims first. (11-cv-12220, Electronic Order,
July 31, 2012).
same day, the case was randomly reassigned to the undersigned
judge. (11-cv-12220, ECF 78).
made its source code available to DataTern on August 10,
2012. (See 11-cv-11970, ECF 156-2). Pursuant to the
parties' joint scheduling statement, DataTern had
proposed that it would supplement its infringement
contentions within 90 days of that production with specific
citations to the source code. (11-cv-12220, ECF 27 at 8).
Although that part of the joint scheduling statement had not
been explicitly adopted by the Court, DataTern represented
that it needed the source code to provide more accurate
infringement contentions and that it would so supplement its
contentions. (11-cv-11970, ECFs 156-1, 156-4).
the '502 patent was also the subject of litigation in the
United States District Court for the Southern District of New
York. See Microsoft Corporation v. Datatern, Inc.
(11-cv-02365-KBF) and SAP AG and SAP of America v.
DataTern, Inc. (11-cv-02648-KBF). That litigation
involved DataTern, but not MicroStrategy. On August 24, 2012,
the New York court issued an order on claim construction in
which it construed the terms “object model” and
“to create at least one interface object, ” among
others in the '502 patent. It construed the term
“object model” to mean “a template with a
predetermined standardized structure both relating to an
object-oriented software application and including object
classes and inheritance relationships among classes.”
Microsoft Corp. v. DataTern, Inc., Nos. 11-cv-02365,
11-cv-02648, 2012 WL 3682915, at *14 (S.D.N.Y. Aug. 24,
2012). It construed the term “to create at least one
interface object” to mean “to generate code for
at least one class and instantiate an object from that class,
where the object is not part of or generated by the object
oriented application and is used to access the
point, in September 2012, MicroStrategy threatened to request
sanctions against DataTern if it did not immediately dismiss
the case the prejudice. In response, DataTern filed a motion
to stay the litigation in Massachusetts pending the entry of
final judgment in the New York cases. (11-cv-12220, ECF 83).
The scheduling order in place at that time would have
required that opening claim-construction briefs be filed by
October 1, 2012. DataTern proposed that that exercise was
unnecessary in light of the fact that the terms construed by
the New York court were sufficient to show noninfringement.
MicroStrategy contended that the case was baseless, its
continuance was prejudicial to its business, and that claim
construction should move forward so that the Federal Circuit
could address all the disputed claim terms at once (as there
were disputed terms the New York court had not reached).
(11-cv-12220, ECF 86).
Court stayed the case on October 5, 2012, pending the
issuance of final judgment in New York. At that hearing,
DataTern disputed its obligation to supplement its
infringement contentions within 90 days of the source code
being produced, contending that its July 20, 2012 contentions
were adequate to allow the parties to proceed to claim
construction and that citations to source code were not
normally provided until the expert reports. (11-cv-12220, ECF
98 at 14-18). The Court noted that the scheduling order did
not require such a supplementation, and permitted DataTern to
inspect the source code during the stay. (Id. at
18-19, 32-33). The Court deferred ruling on whether DataTern
was required to file amended infringement contentions
including citations to the source code, explaining that it
was “not prepared to make a final binding decision
right now” although it might be “the first
sentence of [MicroStrategy's] first motion” after
the lift of the stay. (Id. at 36-37).
York court issued a final judgment in the consolidated cases
before it on December 26, 2012. (11-cv-12220, ECF 105 at 4).
January 4, 2013, the Court granted a joint motion to
consolidate the cases consolidated under 11-cv-12220 with the
case against Blazent; at that point, case number
11-cv-11970-FDS became the lead case. Blazent also agreed to
be bound by the adjudication as to liability against
MicroStrategy. (11-cv-11970, ECFs 25, 26).
January 24, 2013, DataTern appealed the judgment of the New
York court to the Federal Circuit.
February 4, 2013, DataTern filed a motion for judgment in
favor of MicroStrategy as a matter of law in this Court,
conceding that if the New York court had correctly construed
the term “to create at least one interface object,
” the accused MicroStrategy product could not be held
to infringe the '502 patent. Specifically, under that
construction, the accused product here would not meet the
claim limitation to “create at least one interface
object” because it does not “generate code for at
least one class and instantiate an object from that
class.” (No. 11-cv-11970, ECF 30). Although DataTern
had offered to stipulate to judgment in MicroStrategy's
favor, MicroStrategy did not accept that stipulation.
Instead, MicroStrategy filed a motion for summary judgment of
noninfringement and attorneys' fees, detailing five
separate grounds- over and above DataTern's concession-on
which it believed it deserved summary judgment. (No.
11-cv-11970, ECF 32).
February 7, 2013, the Court granted summary judgment to
MicroStrategy based on the concession by DataTern that
MicroStrategy could not be held to have infringed the
'502 patent based on the New York court's
construction of “create at least one interface
object.” (No. 11-cv-11970, ECF 39). It declined to
address the other grounds MicroStrategy advanced, and
deferred consideration of the fees question until after any
decision by the Federal Circuit. DataTern then appealed the
judgment in this case.
5, 2014, the Federal Circuit upheld the New York court's
judgment of non-infringement. Microsoft Corp. v.
DataTern, Inc., 755 F.3d 899, 909 (Fed. Cir. 2014). In
so doing, it upheld the New York district court's
determination that the term “object model”
required classes. Id. It did not, however, review
the district court's construction of “to create at
least one interface object, ” as that proved
unnecessary to render its decision. Id. at 908 n.5.
December 19, 2014, the Federal Circuit vacated this
Court's order of summary judgment, finding that the New
York court's construction of the term “to create at
least one interface object” (which this Court had
essentially adopted) was incorrect. DataTern, Inc. v.
Epicor Software Corp., 599 Fed.Appx. 948, 954-55 (Fed.
Cir. 2014). It construed the term “to create at least
one interface object” to mean “to instantiate at
least one interface object from a class.” Id.
The Federal Circuit remanded the case to this Court for
further proceedings. Id. at 955.
February 11, 2015, MicroStrategy filed two separate motions
for summary judgment, one on the basis of invalidity for
non-patentable subject matter and the other on the basis of
non-infringement. (11-cv-11970, ECFs 49, 53). On September 4,
2015, the Court denied both motions, explaining that the
'502 patent was not drawn to patent-ineligible subject
matter and that the motion for summary judgment was premature
because it depended on the construction of the term
“class.” (11-cv-11970, ECF 101). Although the
Court was troubled by the fact that DataTern had taken
inconsistent positions as to the construction of the term
“class” in this litigation and the New York
litigation (in which it had stipulated to a different
construction than the one it advanced here), it declined to
hold that DataTern was estopped because the matter had not
been fully briefed.
February 19, 2016, MicroStrategy filed a motion to require
DataTern to post a $2.5 million bond to cover its expected
attorneys' fees in the event that MicroStrategy prevailed
and was awarded fees. (11-cv-11970, ECF 103). The Court
denied that motion without prejudice on March 9, 2016, on the
ground that the “[l]ittle has changed since the Court
denied summary judgment in September 2015: the parties still
have not begun claim construction and the judicial estoppel
argument on the term ‘class' remains
undeveloped.” (11-cv-11970, ECF 107 at 9).
29, 2016, MicroStrategy filed a motion to compel production
of documents from prior litigation involving the '502
patent. (11-cv-11970, ECF 132). On August 5, 2016, DataTern
filed a motion to compel production of MicroStrategy's
source code, which MicroStrategy argued it should not have to
do because DataTern had had an opportunity to view the source
code back in 2012 and forfeited it. (No. 11-cv-11970, ECFs
140, 156). On September 7, 2016, Magistrate Judge Dein
granted in part and denied in part MicroStrategy's
motion, ordering MicroStrategy to obtain as many of the
documents as possible from publicly available sources and
accepting DataTern's representations as to the
non-existence of certain statements, but requiring DataTern
to provide hard copies of anything not publicly available and
allowing MicroStrategy to file a further motion to compel if
there were additional documents it thought it deserved. Judge
Dein also granted DataTern's motion to compel
MicroStrategy to produce its source code. (11-cv-11970, ECF
September 26, 2016, the Court held a Markman hearing
on the seven disputed claim terms. The Court issued its
Markman order on February 7, 2017. (11-cv-11970, ECF
204). The Court ultimately agreed with MicroStrategy's
construction of “class, ” but, the matter having
been fully briefed, found that MicroStrategy had failed to
demonstrate that DataTern would derive an unfair advantage
from its position being adopted by the Court, and therefore
DataTern was not judicially estopped from asserting its
position on the proper construction of the term
that order, DataTern filed amended infringement contentions
in March 2017. (11-cv-11970, ECF 206). Those infringement
contentions did not include citations to MicroStrategy's
source code. In April 2017, MicroStrategy filed amended
invalidity and noninfringement contentions. (11-cv-11973, ECF
210). It then filed a motion to compel adequate infringement
contentions from DataTern in June 2017. (11-cv-11973, ECF
the Court could rule on that motion, DataTern's counsel
file a motion to withdraw on August 22, 2017. Therein,
DataTern's counsel explained (obliquely, to avoid
violating the attorney-client privilege), that their
representation agreement “provides that the client will
consent to [counsel]'s withdrawal upon the occurrence of
certain circumstances that include material disagreement over
the conduct of the case, non-payment of expert fees and
non-payment of other disbursements” and that one or
another of those circumstances had come to pass. (Docket No.
227 at 1-2). On August 28, 2017, the Court granted the motion
to withdraw effective September 18, 2017, in order to give
DataTern the opportunity to find substitute counsel. The
Court later extended that deadline to October 20, 2017.
DataTern was not able to find substitute counsel, and,
because a corporation is not permitted to proceed pro
se, the Court dismissed the action for failure to
prosecute on that date.
requested leave to file another motion for summary judgment,
which the Court denied. (11-cv-11970, ECF 241). Subsequently,
MicroStrategy filed this motion for fees. The other six
remaining defendants have filed follow-on motions for fees
incurred prior to the cases being consolidated.
Standard of Review
court in exceptional cases may award reasonable attorney fees
to the prevailing party” in a patent dispute. 35 U.S.C.
§ 285. In order to be a “prevailing party, ”
a party must have received “relief on the
merits.” Highway Equip. Co. v. FECO, Ltd., 469
F.3d 1027, 1033-34 (Fed. Cir. 2006). The
“‘touchstone of the prevailing party inquiry must
be the material alteration of the legal relationship of the
parties.'” CRST Van Expedited, Inc. v. Equal
Emp't Opportunity Comm'n, 136 S.Ct. 1642, 1646
(2016) (quoting Tex. State Teachers Ass'n v. Garland
Indep. Sch. Dist., 489 U.S. 782, 789 (1989)). That
change “must be marked by ‘judicial
imprimatur'”; in other words, the party
must have prevailed “because he has received a
‘judicially sanctioned change in ...