Gen. Protecht Grp., Inc. v. Leviton Mfg. Co.

• Citation: 122 F.Supp.3d 1114
• Decision Date: 03 August 2015
• Docket Number: No. CIV. 10–1020 JB/LFG.,CIV. 10–1020 JB/LFG.
• Parties: GENERAL PROTECHT GROUP, INC., f/k/a Zhejiang Dongzheng Electrical, Co.; G–Techt Global Corporation ; SecurElectric Corporation ; Warehouse–Lighting.Com LLC ; Central Purchasing, LLC; and Harbor Freight Tools USA, Inc., Plaintiffs, v. LEVITON MANUFACTURING CO., Defendant.
• Court: U.S. District Court — District of New Mexico

122 F.Supp.3d 1114

GENERAL PROTECHT GROUP, INC., f/k/a Zhejiang Dongzheng Electrical, Co.; G–Techt Global Corporation ; SecurElectric Corporation ; Warehouse–Lighting.Com LLC ; Central Purchasing, LLC; and Harbor Freight Tools USA, Inc., Plaintiffs,

v.LEVITON MANUFACTURING CO., Defendant.

No. CIV. 10–1020 JB/LFG.

United States District Court, D. New Mexico.

Filed Aug. 3, 2015.

Ann G. Fort, Lei Fang, Sutherland Asbill & Brennan LLP, Atlanta, GA, Mark J. Rosenberg, Tarter Krinsky & Drogin, LLP, New York, NY, Roger E. Michener, Michener Law Firm, LLC, Placitas, NM, for Plaintiffs.

Emil Kiehne, Modrall Sperling Roehl Harris & Sisk PA, Albuquerque, NM, Larry L. Shatzer, Shaun R. Snader, Wilson, Sonsini, Goodrich & Rosati, P.C., Washington, DC, Robin L. Brewer, Stefani E. Shanberg, Wilson, Sonsini, Goodrich & Rosati, P.C., Palo Alto, CA, for Defendant.

MEMORANDUM OPINION¹

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on the Plaintiff's Motion for Finding Exceptional Case Under 35 U.S.C. § 285 and Award of Attorneys' Fees, filed June 22, 2012 (Doc. 202)("Motion"). The Court held a hearing on March 6, 2013. The primary issue is whether Defendant Leviton Manufacturing Co. should pay some or all of the Plaintiffs' attorneys fees, which would require the Court to find that Leviton Manufacturing litigated so unreasonably or from such a weak position that the case is "exceptional" under 35 U.S.C. § 285. The Court concludes that (i) Leviton Manufacturing's position was incorrect but not exceptionally so; and (ii) Leviton Manufacturing did not litigate in an excessively unreasonable manner by asserting its faulty position. Consequently, the Court concludes the case is not exceptional, and, thus, no attorneys' fees are warranted. Nonetheless, the Court will consider the reasonableness of the Plaintiffs' requested attorneys' fees and find that, even if the Court had found the case exceptional, it would not have awarded fees for: (i) clerical or secretarial tasks that paralegals performed; (ii) work performed relating to a separate trade dispute; (iii) three attorneys to attend single depositions; or (iv) travel expenses to send an attorney to China.

FACTUAL BACKGROUND

General Protecht Group, Inc.² and Leviton Manufacturing build and sell competing ground fault circuit interrupter ("GFCI") products. See Leviton Mfg. Co. v. Nicor, Inc., 557 F.Supp.2d 1231, 1235 (D.N.M.2007) ; Leviton Mfg. Co. v. Nicor, Inc., No. CIV 04–0424, 2006 WL 4079129, at *1 (D.N.M. May 23, 2006) ; Memorandum at 7. GFCIs are safety devices that reduce the risk of electrocution. See Leviton Mfg. Co. v. Nicor, Inc., 2006 WL 4079129, at *1. General Protecht markets and sells GFCI products to United States distributors, including Plaintiffs Harbor Freight Tools USA, Inc., Central Purchasing, LLC, G–Techt Global Corp., SecurElectric Corp., and Warehouse–Lighting.com LLC. See Leviton Mfg. Co. v. Zhejiang Dongzheng Elec. Co., 506 F.Supp.2d 646, 648–49 (D.N.M.2007) ; Leviton Mfg. Co. v. Nicor, Inc., 557 F.Supp.2d at 1235 ; Memorandum at 7. General Protecht manufactures its GFCI products in China. See Leviton Mfg. Co. v. Zhejiang Dongzheng Elec. Co., 506 F.Supp.2d at 648–49 ; Memorandum at 7.

1. The Prior Actions.

In 2004 and 2005, Leviton Manufacturing asserted claims of patent infringement of U.S. Patent Nos. 6,246,558 ("the '558 Patent") and 6,864,766 ("the '766 patent") in the United States District Court for the District of New Mexico. See Memorandum at 8; Defendant Leviton Manufacturing Co.'s Memorandum of Law in Opposition to Plaintiffs' Motion for Temporary Restraining Order and Preliminary Injunction at 3, filed November 12, 2010 (Doc. 18) ("Response"). In these actions, Leviton Manufacturing alleged that General Protecht, Harbor Freight, Central Purchasing, and Nicor, Inc. infringed Leviton's '558 patent and '766 patent through their sale of GFCIs that General Protecht manufactured. See Leviton Mfg. Co. v. Nicor, Inc., Nos. CIV 04–0424 JB/RHS, CIV 04–1295 JB/ACT (D.N.M.); Leviton Mfg. Co. v. Zhejiang Dongzheng Elec., Co., No. CIV 05–0301 JB/DJS (D.N.M.). On March 5, 2007, the Court made a Markman³ ruling, which adopted General Protecht, Harbor Freight, Nicor, Inc., and Central Purchasing's construction of the terms "movable bridge," "predetermined condition," and "reset portion." Leviton Mfg. Co. v. Zhejiang Dongzheng Elec. Co., 506 F.Supp.2d at 648. On July 10, 2007, the Court granted summary judgment of non-infringement to General Protecht, Harbor Freight, and Nicor, Inc. with respect to the '558 patent. See Leviton Mfg. Co. v. Nicor, Inc., 557 F.Supp.2d at 1235, 1250–51.

2. The CSA.

In October 2007, Leviton Manufacturing, General Protecht, Harbor Freight, Nicor, Inc., and Central Purchasing entered into a confidential settlement agreement ("CSA") to resolve the patent infringement actions pending in the Court. See Memorandum at 9; Response at 3. The CSA included a covenant not to sue. The covenant stated:

2.1 Leviton ... hereby covenants not to sue (1) Defendants, their officers, directors, shareholders, members, employees, subsidiaries, or affiliates for alleged infringement of the '558 and/or '766 patents based on the Dongzheng products currently accused of infringement in the '558 and/or '766 actions; and (2) Defendants, their officers, directors, shareholders, members, employees, subsidiaries, or affiliates for alleged infringement of the '558 patent and/or the '766 patent with respect to an anticipated future new GFCI product that Defendant Dongzheng has indicated its intent to market in the U.S. in the future,....

2.2 The dismissals and covenant not to sue by Leviton in Article 2.1 shall also apply to Defendants' customers of the Dongzheng Products including, but not limited to, Interline Brands, Inc., provided such customers do not seek to invalidate any claim of the '558 or '766 patents or seek to have those patents declared invalid or unenforceable through any presently existing or future court action or administrative filing.

CSA §§ 2.1, 2.2, at 4–5. The CSA also contained a section regarding the District of New Mexico's '766 Markman order.

The parties will jointly request that the Court vacate its '766 Order in ... the Court's Memorandum Opinion and Order dated March 5, 2007, by submitting a joint motion and proposed form of Order to the Court.... However, Leviton agrees not to challenge any proposed claim construction of a '766 patent claim that is reflected in the '766 Markman Order, which any of the Defendants, their officers, directors, shareholders, members, employees, subsidiaries, affiliates (or their customers) may propose in connection with any claim of infringement of a '766 patent claim. Defendants and their officers, directors, shareholders, members, employees, subsidiaries, affiliates (or their customers) are not precluded from proposing said claim construction in any action or proceeding asserting infringement of any patent related to the '766 patent, although Leviton may challenge such proposed claim construction. Leviton and defendants agree that neither the fact of the Court's decision to vacate or not vacate its '766 Markman Order, nor the fact that the parties requested that the Court vacate its '766 Markman Order, can be used by a party to this Agreement to support or challenge a proposed construction of a claim related to the '766 patent.

CSA § 4.1.

The CSA also contained a section entitled "Governing Law/Venue." CSA § 11.2, at 11. This section states: "Any dispute between the Parties relating to or arising out of this [CSA] shall be prosecuted exclusively in the United States District Court for the District of New Mexico. The Parties consent to the venue and jurisdiction of such court for this purpose." CSA § 11.2, at 11.

3. Leviton's '124 and '151 Patents.

After executing the CSA, Leviton Manufacturing secured two new patents—U.S. Patent Nos. 7,463,124 ("the '124 patent") and 7,764,151 ("the '151 patent"). On December 9, 2008, the '124 patent issued from application no. 10/977,929 ("the '929 application"), which Leviton filed on October 28, 2004. See Response at 6; Memorandum at 10. The '151 patent issued on July 27, 2010 from application no. 12/176,735 ("the '735 application"), which Leviton Manufacturing filed on July 21, 2008. See Response at 7; Memorandum at 10. The '929 application was filed as a continuation⁴ of the '766 application. See Response at 6. The '735 application was filed as a continuation of the '929 application. See Response at 7.

4. Actions Asserting Infringement of Leviton's '124 and '151 Patents.

In September 2010, Leviton Manufacturing filed patent infringement complaints with the International Trade Commission ("ITC") and in the District Court for the Northern District of California, alleging that General Protecht, Techt, SecureElectric, Warehouse–Lighting.com, Central Purchasing, Harbor Freight, and other entities, infringed Leviton Manufacturing's '124 and '151 patents. Response at 7; Memorandum at 14.⁵ In its ITC Complaint, Leviton Manufacturing asserts that six of General Protecht's GFCI products infringe the '124 and '151 patents. See Declaration of Huaiyin Song ¶ 8, at 4–5 (executed Oct. 29, 2010), filed November 2, 2010 (Doc. 8) ("Song Decl."); Amended Complaint Under Section 337 of the Tariff Act of 1930, as Amended at i-ii, 1–9, 26–46, filed November 3, 2010 (Doc. 10–1). Leviton Manufacturing's complaints in the District Court for the Northern District of California and in the ITC allege identical claims of patent infringement. See Song Decl. ¶ 7, at 3–4; Leviton Manufacturing Co.'s First Amended Complaint for Patent Infringement and Trade Secret Misappropriation, filed November 3, 2010 (Doc. 10–2). The Plaintiffs assert that the CSA licensed the six GFCI products that Leviton Manufacturing asserts infringe the '124 and '151 patents. See Song Decl. ¶¶ 8–10, at 4–5. Huaiyin Song, a manager in General Protecht's Department of Technology Development and Product Manufacturing, states...