Certusview Techs., LLC v. S & N Locating Servs., LLC
| Decision Date | 09 February 2018 |
| Docket Number | Civil Action No. 2:13cv346 |
| Citation | 287 F.Supp.3d 580 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | CERTUSVIEW TECHNOLOGIES, LLC, Plaintiff, v. S & N LOCATING SERVICES, LLC, and S & N Communications, Inc., Defendants. |
Angela L. Campbell, James Patrick Brogan, Orion Armon, Cooley LLP (CO–NA), Broomfield, CO, Christopher Charles Campbell, Cooley LLP (VA), Reston, VA, Thomas Joseph Friel, Jr., Cooley LLP (CA N/A), San Francisco, CA, for Plaintiff.
Brian L. Whisler, Baker & McKenzie LLP (DC), Washington, DC, Erin Marie Choi, Benjamin Beckage Kelly, Baker & McKenzie LLP (TX–NA), Dallas, TX, Daniel Joseph O'Connor, Baker & McKenzie LLP (IL–NA), Chicago, IL, John Giuseppe Flaim, Mackenzie Marie DeWerff, Baker & McKenzie, Dallas, TX, Michael Anthony Duffy, Weldon Barton Rankin, Baker & McKenzie, Chicago, IL, for Defendants.
This matter is before the Court on "Defendants' Renewed Motion for Exceptional Case Finding and Attorneys' Fees," filed by S & N Locating Services, LLC and S & N Communications, Inc. (collectively "Defendants" or "S & N"). ECF No. 573. In their motion, Defendants request that the Court award them attorneys' fees because this is an "exceptional case" within the meaning of 35 U.S.C. § 285. The motion has been fully briefed. Because the Court finds that oral argument is not necessary, the matter is now ripe for decision.
Plaintiff, CertusView Technologies, LLC ("Plaintiff" or "Certusview") holds the five related patents, involving technology for prevention of damage to underground infrastructure, at issue in this matter: United States Patent No. 8,340,359 ("'359 Patent"), United States Patent No. 8,265,344 ("'344 Patent"), United States Patent No. 8,290,204 ("'204 Patent"), United States Patent No. 8,532,341 ("'341 Patent"), and United States Patent No. 8,407,001 ("'001 Patent") (collectively, the "Patents-in-Suit"). August 2, 2016 Op. & Order, 17–18, ECF No. 542. The Patents-in-Suit issued in 2012 and 2013.
CertusView's products were developed as a means to improve record-keeping and documentation of "locate operations," id. at 23, that is, "the application of paint, flags, or some other marking object or material to indicate the presence of an underground facility," Joint Claim Construction Chart 2, ECF No. 101–2. Specifically, the Patents-in-Suit claim inventions related to CertusView's e-Sketch technology. ECF No. 542, at 24. Stated broadly, the e-Sketch technology allows locators to document a locate operation more accurately and to create a searchable electronic record that includes such documentation and additional specific data regarding the locate operation. Id.
On May 29, 2013, CertusView filed a patent infringement action in this Court against S & N. Compl., ECF No. 1. On December 6, 2013, CertusView filed an amended complaint, alleging infringement of the five Patents-in-Suit. See Am. Compl., ECF No. 55. On December 23, 2013, S & N filed an Answer denying CertusView's allegations of infringement and asserting counterclaims against CertusView, seeking declaratory judgments of non-infringement and invalidity regarding all five Patents-in-Suit. S & N's Answer, Affirmative Defenses, Countercls., ECF No. 61.1 After the Supreme Court issued its June 2014 Alice decision, on October 28, 2014—following a Markman hearing, issuance of a claim construction order, and a limitation on the number of asserted patent claims—S & N filed a Motion for Judgment on the Pleadings, pursuant to Federal Rule of Civil Procedure 12(c), contending that the Patents-in-Suit were invalid as they did not claim patentable subject matter under 35 U.S.C. § 101. Mot. J., ECF No. 197. On January 21, 2015, the Court granted S & N's Motion for Judgment on the Pleadings and found that all of the asserted claims of the Patents-in-Suit were invalid for failure to claim patentable subject matter under 35 U.S.C. § 101. Sec. 101 Op. & Order, ECF No. 250.
On November 10, 2015, U.S. Patent 9,183,646 ("the '646 patent") issued. Id. at 1, ECF No. 576–3. "On the face of the '646 patent, under ‘Related U.S. Application Date,’ it shows that the '646 patent is [a] ‘[c]ontinuation of application No. 13/950,655, filed on Jul. 25, 2013, which is a continuation of application No. 13/796,487, filed on Mar. 12, 2013, now Pat. No. 8,532,341....’ " Teja Aff. at 2, ECF No. 576–1. " U.S. Patent No. 8,532,341 (‘the '341 patent’) is the ‘parent patent’ to the 646 patent and was asserted in this litigation." Id.
"The '646 patent is titled Apparatus, Systems and methods to Generate Electronic Records of Underground Facility Marking Operations Performed with GPS–Enabled Marking Devices." Id. at 1. The '341 patent is titled Electronically Documenting Locate Operations for Underground Utilities. Id. at 14, ECF No. 250. Because the '646 patent is a continuation of the '341 patent, "they share the same specification and are directed to the same invention, though there may be some variation in the scope of the subject matter claimed in the two patents." ECF No. 576–1, at 2; Transco Products Inc. v. Performance Contracting, Inc., 38 F.3d 551, 555–56 (Fed. Cir. 1994) ( ). The '341 patent issued September 10, 2013, over three months after this suit was filed, but before the Alice decision of June 19, 2014. The '646 patent issued November 10, 2015, "over a year after Alice and after CertusView submitted this Court's § 101 [Opinion and] Order to the examiner." Pl.'s Resp. Opp'n at 9, ECF No. 576; ECF No. 576–1, at 2 ().
On March 8, 2016, the matter proceeded to a five-day bench trial on S & N's declaratory judgment counterclaim against CertusView for inequitable conduct. The Court then took the matter under advisement pending submission of post-trial briefs. On June 15, 2016, after the conclusion of the bench trial, CertusView filed its Motion for Partial Reconsideration of Judgment of Patent Ineligibility under 35 U.S.C. § 101. Mot. Partial Recons., ECF No. 533. On August 2, 2016, the Court denied S & N's declaratory judgment counterclaim for inequitable conduct on each of the five grounds alleged. August 2, 2016 Op. & Order, ECF No. 542. On August 10, 2016, the Court denied CertusView's motion for partial reconsideration. Reconsid. Op. & Order, ECF No. 545. Final judgment was entered on August 10, 2016. Final Judg., ECF No. 547. On August 24, 2016, Defendants filed their second Motion for Exceptional Case Finding and Attorneys' Fees. ECF No. 549. By Order of November 21, 2016, the Court denied Defendants' second motion without prejudice to Defendants' right to refile their motion within fourteen (14) days after the United States Court of Appeals for the Federal Circuit issued a mandate finalizing judgment on the merits of the Plaintiff's pending appeal. Mem. Order, ECF No. 560. The Federal Circuit affirmed this Court's § 101 invalidity ruling on August 11, 2017, ECF No. 570, and issued a mandate finalizing the judgment on September 18, 2017, ECF No. 571. S & N filed this renewed motion for exceptional case finding and attorneys' fees on October 2, 2017. Certusview opposes such motion. ECF No. 573.
Pursuant to Section 285 of the Patent Act, 35 U.S.C. § 285, "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party."2 Construing the word "exceptional ... in accordance with [its] ordinary meaning," the Supreme Court recently explained that 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. District courts may determine whether a case is "exceptional" in the case-by-case exercise of their discretion, considering the totality of the circumstances.
Under the standard adopted in Octane Fitness, "a district court may award fees in the rare case in which a party's unreasonable conduct—while not necessarily independently sanctionable—is nonetheless so ‘exceptional’ as to justify an award of fees." Id. at 1757. When weighing the evidence to determine whether a case is exceptional, the court may "consider a ‘nonexclusive’ list of ‘factors,’ including '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, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994) ) ( a nonexclusive list of factors district courts may utilize in determining whether to award fees under similar provision in Copyright Act). Any such exceptional case determination must find support in a "preponderance of the evidence." Octane Fitness, 134 S.Ct. at 1758.
Defendants S & N move for an exceptional case finding on the grounds that Plaintiff CertusView 1) asserted objectively unreasonable patent claims, and 2) conducted the litigation in an unreasonable manner. Defs.' Br. Support 1, ECF No. 574.
S & N alleges that Plaintiff Certusview asserted objectively unreasonable patent claims when it "knowingly filed and maintained this action for infringement of patent claims drawn to the abstract idea of documenting a locate operation—a process that has long been performed by hand—even though its claims were facially ineligible from the...
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