Hopkins Mfg. Corp. v. Cequent Performance Prods., Inc.
| Decision Date | 12 December 2016 |
| Docket Number | Case No. 14–2208–JAR |
| Citation | 223 F.Supp.3d 1194 |
| Parties | HOPKINS MANUFACTURING CORPORATION, Plaintiff, v. CEQUENT PERFORMANCE PRODUCTS, INC., Defendant. |
| Court | U.S. District Court — District of Kansas |
Matthew B. Walters, Scott R. Brown, Hovey Williams LLP, Overland Park, KS, for Plaintiff.
David B. Cupar, Matthew J. Cavanagh, Cleveland, OH, Michael T. Crabb, Stephen J. Torline, Kuckelman, Torline, Kirkland & Lewis, Overland Park, KS, for Defendant.
Plaintiff Hopkins Manufacturing Corporation ("Hopkins") filed this single-count action for alleged patent infringement of U.S. Patent No. 6,837,551 ("'551 Patent"). On February 10, 2015, this Court granted a motion to stay the case pending inter partes review ("IPR") of the patent by the United States Patent and Trademark Office ("USPTO"). This matter is before the Court on Defendant Cequent Performance Products, Inc.'s ("Cequent") Motion for Summary Judgment and Motion to Lift the Stay (Doc. 27). The motions are fully briefed and the Court is prepared to rule. As described more fully below, Defendant's Motion for Summary Judgment and Motion to Lift the Stay are granted.
Summary judgment is appropriate if the moving party demonstrates that there is no genuine dispute as to any material fact and that it is entitled to judgment as a matter of law.1 In applying this standard, the court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party.2 "There is no genuine issue of material fact unless the evidence, construed in the light most favorable to the nonmoving party, is such that a reasonable jury could return a verdict for the nonmoving party."3 A fact is "material" if, under the applicable substantive law, it is "essential to the proper disposition of the claim."4 An issue of fact is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the non-moving party."5
The moving party initially must show the absence of a genuine issue of material fact and entitlement to judgment as a matter of law.6 In attempting to meet this standard, a movant that does not bear the ultimate burden of persuasion at trial need not negate the other party's claim; rather, the movant need simply point out to the court a lack of evidence regarding an essential element of the other party's claim.7
Once the movant has met this initial burden, the burden shifts to the nonmoving party to "set forth specific facts showing that there is a genuine issue for trial."8 The nonmoving party may not simply rest upon its pleadings to satisfy its burden.9 Rather, the nonmoving party must "set forth specific facts that would be admissible in evidence in the event of trial from which a rational trier of fact could find for the nonmovant."10
The facts "must be identified by reference to an affidavit, a deposition transcript, or a specific exhibit incorporated therein."11 Rule 56(c)(4) provides that opposing affidavits must be made on personal knowledge and shall set forth such facts as would be admissible in evidence.12 The nonmoving party cannot avoid summary judgment by repeating conclusory opinions, allegations unsupported by specific facts, or speculation.13
Finally, summary judgment is not a "disfavored procedural shortcut;" on the contrary, it is an important procedure "designed to secure the just, speedy and inexpensive determination of every action."14 In responding to a motion for summary judgment, "a party cannot rest on ignorance of facts, on speculation, or on suspicion and may not escape summary judgment in the mere hope that something will turn up at trial."15
The following facts are uncontroverted, stipulated to, or viewed in the light most favorable to Plaintiff.
Hopkins filed this single-count action against Cequent for alleged infringement of United State Patent No. 6,837,551. On January 23, 2015, Cequent filed a petition for IPR of eight claims of the '551 Patent with the USPTO.16 On August 17, 2015, the USPTO granted Cequent's petition and instituted IPR of the eight claims of the '551 Patent.
On December 7, 2015, Hopkins filed a request for adverse judgment in the IPR proceedings in accordance with 37 C.F.R. § 42.73(b)(4), and in its notice, Hopkins acknowledged that "such abandonment will lead to cancellation of the claims involved in this inter partes review."17 On December 11, 2015, the USPTO granted Hopkins' request, entered judgment adverse to Hopkins, and ordered that "claims 1–8 of U.S. Patent No. 6,837,551 B2 shall be canceled. "18
On February 10, 2016, Cequent forwarded to Hopkins what it called "a draft motion for consent judgment with the judgment for [Hopkins'] review."19 The transmittal email requested Hopkins to "[p]lease let us know whether you agree to this language or have comments." Cequent followed up on February 18, 2016 by email requesting that Hopkins "[p]lease let us know if the draft is acceptable, otherwise we will have to move for summary judgment against Hopkins."20
Later in the day on February 18, 2016, Hopkins responded with its comment and attached a redlined version of a proposed stipulation of dismissal. The transmittal email read:
Attached is a redline version of what Hopkins is willing to stipulate to. When we had our phone call, we did not discuss a consent judgment, Dave stated you needed an express acknowledgment that Cequent is the prevailing party in the stipulation. We have included such in this version along with a little more factual context and we don't believe a consent judgment is appropriate. Further, the attached will be self-executing and require no further action by the Court on this issue. Given what Hopkins is willing to stipulate to in this version, a motion for summary judgment by Cequent would be unnecessarily complicating the matter and driving up costs for no reason we can discern.21
Cequent did not respond to Hopkins' email or request any changes to Hopkins' proposed stipulation of dismissal before filing its Motion to Lift the Stay and Motion for Summary Judgment on February 24, 2016.22
The only issue to resolve in this motion for summary judgment is whether Defendant is entitled to summary judgment in its favor in order to proceed as the prevailing party for purposes of seeking attorney's fees under § 285 of the Patent Act.23 The parties both agree that the merits of the patent infringement case were resolved with the adverse judgment entered against Plaintiff at the USPTO.24 However, Defendant argues that a final judgment on the merits is necessary to establish it as the prevailing party; Plaintiff argues that a stipulation of dismissal under Fed. R. Civ. P. 41(a)(1)(A)(ii) is sufficient in this case.
Plaintiff offers three arguments for denial of summary judgment under the circumstances of this case. First, Plaintiff argues that cancellation of the claims during the IPR with the adverse judgment entered against it mooted this case. Second, Plaintiff contends that existing case law does not require a judgment on the merits, such as a granting of summary judgment, to seek exceptional-case attorney's fees. Third, Plaintiff argues that a stipulated dismissal under Rule 41(a)(1)(A)(ii) is sufficient to allow Defendant to be the prevailing party for purposes of seeking attorney's fees.
The Court first addresses whether this case is moot for purposes of considering summary judgment and lifting the stay based on the USPTO's cancellation of the patent claims. Article III of the Constitution gives federal courts the power to exercise jurisdiction only over "Cases" and "Controversies." As the Supreme Court has explained:
In limiting the judicial power to "Cases" and "Controversies," Article III of the Constitution restricts it to the traditional role of Anglo–American courts, which is to redress or prevent actual or imminently threatened injury to persons caused by private or official violation of law. Except when necessary in the execution of that function, courts have no charter to review and revise legislative and executive action.25
The standing doctrine requires federal courts, before considering the merits of an action, to "satisfy themselves that the plaintiff has alleged such a personal stake in the outcome of the controversy as to warrant [the plaintiff's] invocation of federal-court jurisdiction."26 Standing considers whether there is a case or controversy at the time the action is filed, while "mootness ensures it remains one at the time a court renders a decision."27 A case is moot only when it is impossible for a court to grant any effectual relief to the prevailing party.28 "Failure to satisfy the requirements of either doctrine places a dispute outside the reach of the federal courts."29
The Court notes that Plaintiff has not cited any authority supporting its assertion that a case is moot upon a cancellation of claims in the USPTO office. Plaintiff cited Cartner v. Alamo Group, Inc. where the district court entered a judgment for defendants upon a motion for a consent judgment following a remand of the case from the circuit.30 The district court also awarded attorney's fees.31 Plaintiff distinguishes Cartner from this case because it argues there was a live controversy when the consent judgment was entered in Cartner —namely, the invalidity of the patent was still in question on remand. Plaintiff argues the validity of the patent is not at issue in this case. However, here, the Court finds that while the adverse judgment cancelled the claims and patent validity, the issue of who is the prevailing party is still a live controversy given the Supreme Court's requirements.
Case law does not support Plaintiff's position that this case is moot. In Inland Steel Co. v. LTV Steel Co. ,32 the Federal Circuit faced a procedural posture similar to this case. The district court stayed the litigation pending the resolution of...
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