Am. Vehicular Scis. LLC v. Autoliv, Inc.
| Decision Date | 24 September 2019 |
| Docket Number | Case No. 5:16-cv-11529 |
| Parties | AMERICAN VEHICULAR SCIENCES LLC, Plaintiff, v. AUTOLIV, INC., et al., Defendants |
| Court | U.S. District Court — Eastern District of Michigan |
JUDITH E. LEVY, United States District Judge Before the Court is Magistrate Judge Patti's Report and Recommendation recommending the Court deny Defendants' motion for attorney fees and costs. (ECF No. 57) The parties were required to file specific written objections within 14 days of service. Fed. R. Civ. P. 72(b)(2) ; E.D. Mich. L.R. 72.1(d). No objections were filed. The Court has nevertheless carefully reviewed the Report and Recommendation and concurs in the reasoning and result. Accordingly,
Defendants' Motion for attorney fees and costs (ECF No. 40) is DENIED.1
IT IS SO ORDERED.
I. RECOMMENDATION : The Court should deny Defendants Autoliv, Inc. and Autoliv ASP, Inc.'s (collectively "Autoliv Defendants") motion for fees and costs. (DE 40.)1
II. REPORT
In this patent infringement suit, Plaintiff American Vehicular Sciences, LLC ("AVS") alleges that Defendants infringed its patent, U.S. Patent No. 9,043,093 (the "'093 patent"). (DE 1.)
The '093 patent, titled "Single Side Curtain Airbag for Vehicles," was filed on October 31, 2007 and finally issued on May 26, 2015. (DE 43-4, ¶ 2.) "The '093 patent claims priority, via a chain of continuation-in-art and divisional applications" to an application filed on December 12, 1995 ("the '247 application"), and "relates to an airbag system for a vehicle, in which ‘the airbag for the front and rear seats are combined, i.e., the airbag deploys along substantially the entire side of the vehicle alongside both the front seat and the rear seat.’ " (See DE 40-7 at 4.) The prosecution of the '093 patent included nine substantive office actions from the Patent and Trademark Office ("PTO"), interviews with the examiners, and an appeal to the Patent Trial and Appeal Board ("PTAB"). (DE 43-4, ¶ 2.)
Plaintiff AVS sued 21 Defendant entities in September 2015, in four different actions in the Central District of California, alleging infringement of the '093 patent. In each case, AVS named as defendants a vehicle manufacturer and the various entities that supply that vehicle manufacturer with the accused airbag assemblies. The cases were transferred and are now pending in this Court as of April 2016, as Case Nos. 5:16-cv-11529, -11530, -11531, and -11532.
On December 17, 2015, three months after this lawsuit was filed, Unified Patents Inc. ("Unified Patents") filed an inter partes review ("IPR") petition with the PTAB, challenging 10 of the 44 claims of the '093 patent (claims 1, 8, 10, 12, 17-19, 26, 27, and 36) as obvious over various combinations of prior art. (DE 40-5 at 3.) AVS filed its preliminary response on March 31, 2016 (DE 43-14), and the PTAB instituted the IPR on June 27, 2016 on 10 of the 44 claims in the '093 patent. (DE 40-5.) The Unified Patent IPR presented two obviousness grounds: the combinations of (1) Leising and Lau, and (2) Karlow and Lau. (Id. ) The PTAB instituted on both grounds, finding that Unified Patent "has shown a reasonable likelihood of success on both asserted grounds," but also stated in the institution decision that "[a]t this preliminary stage in the proceeding, we have not made a final determination with respect to the patentability of any challenged claim or the construction of any claim term." (Id. at 35.)
On August 15, 2016, Defendants filed a motion to stay litigation pending resolution of the instituted Unified Patent IPR, and "pending the outcome of any additional IPRs that may be instituted." (DEs 19, 20.) Defendants argued that it is likely that some, if not all, of the claims of the '093 patent will be invalidated in a final written decision of the PTAB, but did not otherwise contend that AVS's complaint was frivolous or that this is an "exceptional" case under 35 U.S.C. § 285. (Id. ) On August 26, 2016, the Court granted the unopposed motion and stayed this case pending the outcome of the PTAB review of the Unified Patent IPR. (DE 24.)
On September 15, 2016, Defendants filed two separate petitions that challenged the validity of all claims of the '093 patent : (1) IPR2016-1790 ("the 1790 IPR"), and (2) IPR2016-1794 ("the 1794 IPR").2 The 1790 IPR challenged all 44 claims of the '093 patent as invalidated by prior art, principally over two combinations substantially similar to those included in the Unified Patent IPR petition: (1) Leising and Lau, and (2) Karlow and Lau. (See DE 40-6.) The 1794 IPR also challenged all 44 claims of the '093 patent, but under an alternative theory: that the proper priority date for the claims was October 27, 2004 ("the '919 application"), not the December 12, 1995 application date as claimed by AVS. (DE 40-7.)3 Defendants contend that the claims of the '093 patent all require a limitation whereby a single curtain airbag has a plurality of compartments in "flow communication" with each other, and that the December 12, 1995 application AVS relies on did not include a written description with support for an airbag with compartments in flow communication. (Id. at 11.) Rather, Defendants contended, the principle of "flow communication" was not disclosed until October 27, 2004 (in the '919 application). (Id. )
On March 28, 2017, the PTAB instituted on all grounds of the 1790 IPR. (DEs 40-6.) On March 23, 2017, the PTAB instituted on all grounds of the 1794 IPR, finding that the December 12, 1995 application "does not provide sufficient written description support for at least the limitation ‘wherein the plurality of compartments are in flow communication with each other.’ " (DE 40-7.) In both decisions, the PTAB stated "[a]t this preliminary stage in the proceeding, we have not made a final determination with respect to the patentability of any challenged claim or the construction of any claim term." (DE 40-6 at 52; DE 40-7 at 46.)
On May 19, 2017, while the 1790 and 1794 IPRs were pending, the PTAB issued its Final Written Decision on the Unified Patent IPR and invalidated the 10 challenged claims in that IPR as obvious in view of the Leising and Lau combination. (DE 40-8 at 36.) However, the PTAB concluded that eight of the claims had not been demonstrated to be invalid over the combination of Karlow and Lau. (Id. )
AVS appealed this Final Decision to the Court of Appeals for the Federal Circuit in July 2017. (DE 40-11.)
In March 2018, the PTAB issued its Final Written Decisions on the 1790 and 1794 IPRs, invalidating all claims of the '093 patent. (DEs 40-9, 40-10.) In its decision regarding the 1790 IPR, the PTAB found that the combinations of the prior art references rendered all asserted claims invalid as obvious. (DE 40-9 at 69-70.) With respect to the 1794 IPR, the PTAB confirmed that AVS was not entitled to claim priority to the December 12, 1995 filing date of the '247 application, and that all claims were invalid as obvious under the 13 grounds presented by Defendants in the 1794 IPR. (Id. at 55-56.) AVS appealed these decisions to the Federal Circuit.
The Federal Circuit summarily affirmed the PTAB's Final Written Decision regarding the Unified Patent IPR on June 19, 2018, and subsequently denied rehearing en banc on August 20, 2018. (DEs 40-12, 40-13.)
In October 2018, following receipt of the Federal Circuit's final decision on the Unified Patent IPR, AVS notified the Defendants that it intended to dismiss these four cases, with each party to bear its own costs. (DEs 40-14, 43-27.) Defendants indicated that they did not oppose dismissal with prejudice, but did oppose any statement that the parties would bear their own fees and costs. (DE 40-15.) Further, Defendant Autoliv specifically notified AVS at that time of its intention to seek its fees incurred in defending this action. (DE 40-16.)4
AVS filed it motion to dismiss and duly indicated that Defendants opposed the request that each party bear its own fees or costs. (DE 27 at 4.) AVS also submitted a proposed order that included AVS's proposed language regarding fees ( that each party would bear its own costs), which the Court entered on October 29, 2018. (DE 28.) After Defendants notified the Court regarding their objection to such language, the Court issued an order requesting the Defendants to "explain their position on the allocation of the fees and costs associated with this litigation." (DE 32.)
On November 21, 2018, three "groups" of Defendants: (1) Autoliv, Inc. and Autoliv ASP, Inc. (the "Autoliv Defendants"); (2) Takata Corporation and TK Holdings, Inc. (the "Takata Defendants"); and, (3) Hyundai Mobis Co., Ltd., Mobis Alabama LLC and Mobis Parts America, LLC (the "Mobis Defendants"), filed the instant Motion for Fees and Costs in each of the four cases pursuant to 35 U.S.C. § 285, which authorizes a court to award "reasonable attorney fees to the prevailing party" in certain "exceptional cases." (DE 40.) Only the Autoliv Defendants remain. (See, e.g., Case No. 16-11530 ...
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