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Lakim Industries, Inc., Dba Quali-Tech Mfg. Co v. Linzer Products Corp

April 24, 2013

LAKIM INDUSTRIES, INC., DBA QUALI-TECH MFG. CO., PLAINTIFF,
v.
LINZER PRODUCTS CORP., DEFENDANT.



The opinion of the court was delivered by: Otis D. Wright, II United States District Judge

ORDER GRANTING DEFENDANT'S MOTION FOR AN AWARD OF ATTORNEY'S FEES AND COSTS [70]

I.INTRODUCTION

Linzer moves for an award of attorneys' fees and costs on the grounds that Quali-Tech's proposed claim-construction and infringement allegations were objectively baseless and brought in bad faith. For the reasons discussed below, the Court GRANTS Linzer's motion and awards an adjusted $106,208.15 in attorneys' fees and $3,011.63 in costs.*fn1

II.BACKGROUND

On August 30, 2012, Quali-Tech filed an Amended Complaint accusing Linzer of infringing U.S. Patent No. 7,120,963 by selling its Trim and Touch-Up product. (ECF No. 33.) The '963 Patent concerns a mini paint-roller mounting assembly. All claims of the '963 Patent require "an outer cylinder, upon which the paint roller is mounted" and "an end piece which is inserted into and surrounded by the outer cylinder." ('963 Patent 4:5--7.) The claims of the '963 Patent therefore have three relevant limitations: (1) an outer cylinder; (2) a paint roller; and (3) that the paint roller be mounted upon the outer cylinder. (Id.) For Quali-Tech's infringement allegation to have been reasonable, Quali-Tech must have determined that Linzer's product embodied each of these three limitations of the '963 Patent.

Linzer's Trim and Touch-Up product joins a paint roller directly onto an end piece. (ECF No. 58, at 1.) It definitively does not contain a distinct outer cylinder. But Quali-Tech maintained that the inner core of the paint roller mounted to the Trim and Touch Up's end piece contains (or doubles as) the outer cylinder claimed in the '963 Patent literally or by equivalence. (ECF No. 59, at 1.) Quali-Tech contended that the bare paint-retaining fabric of the paint roller, lacking its inner core, would qualify as a "paint roller." (ECF No. 52, at 2.)

Linzer argued that its product could not literally infringe the '963 Patent because it has no distinct outer cylinder. (ECF No. 58, at 1.) Linzer further asserted that even if the Court accepted Quali-Tech's equivalence argument-and relied on the inner core of the paint roller as the outer cylinder-Linzer's product would still not infringe the '963 Patent because the Trim and Touch Up product would then fail to mount a paint roller upon the outer cylinder. (Id.) Without the inner core of the paint roller, Linzer noted, all that would be left is a strip of fabric that lacked the rigidity necessary to be mounted upon an end piece to roll paint. (Id.) Whether Linzer's product contained an outer cylinder therefore depended on this Court's construction of the term "paint roller."

Linzer notified Quali-Tech that it intended to move for summary judgment of non-infringement in its initial Joint Rule 26(f) Statement on October 1, 2012. (ECF No. 37.) On November 8, 2012, Linzer submitted a pre-motion letter seeking leave to file a Motion for Summary Judgment of Non-Infringement of all asserted claims of the '963 Patent, as required by the Court's Standing Order Regarding Patent Cases. (ECF No. 48.) The Court allowed Linzer's early motion and requested that the parties also propose construction of the phrase "an outer cylinder, upon which the point roller is mounted" in their briefing. (ECF No. 50.)

Adhering to the ordinary, common, and widely accepted commercial meaning of "paint roller," the Court substantially adopted Linzer's proposed construction. The Court found that "paint roller" means a rigid cylindrical core covered externally by paint-absorbing material. (ECF No. 63, at 8.)

For the reasons addressed below, the Court finds that Quali-Tech acted in bad faith in filing a baseless infringement action and continuing to pursue it despite lacking evidence of infringement. The Court therefore GRANTS Linzer's Motion for an Award of Attorneys' Fees and Costs.

III.LEGAL STANDARD

Meritless patent litigation places a particular strain on judicial and party resources. In recognition of this strain, section 285 of the Patent Act gives district courts discretion to award fees to prevailing parties in qualifying cases.

35 U.S.C. § 285. Attorneys'-fees awards are appropriate in "exceptional cases" in which sanctions are necessary to deter parties from bringing clearly unwarranted suits. Id.; Automated Bus. Cos. v. NEC Am., Inc., 202 F.3d 1353, 1354 (Fed. Cir. 2000); Eon--Net LP v. Flagstar Bancorp, 653 F.3d 1314, 1327 (Fed. Cir. 2011).

When deciding whether to award attorneys' fees, courts engage in a two-step inquiry. First, the Court must determine whether the prevailing party has proved by clear and convincing evidence that the case is "exceptional." MarcTec, LLC v. Johnson & Johnson, 664 F.3d 907, 915 (Fed. Cir. 2012). If the Court finds that the case is exceptional, it must then determine whether an award of attorneys' fees is justified. Id. at 916.

Absent misconduct in the litigation or in securing the patent, a case is exceptional under § 285 if (1) the litigation is brought in subjective bad faith, and (2) the litigation is objectively baseless. Brooks Furniture Mfg., Inc. v. Dutailier Int'l, Inc., 393 F.3d 1378, 1381 (Fed. Cir. 2005). Litigation is objectively baseless if the allegations are "such that no reasonable litigant could reasonably expect success on the merits." Dominant Semiconductors Sdn. Bhd. v. OSRAM GmbH, 524 F.3d 1254, 1260 (Fed. Cir. 2008).

Reasonable minds can differ as to claim construction, and losing constructions can nonetheless be non-frivolous. But a threshold exists below which a claim construction is "so unreasonable that no reasonable litigant could believe it would succeed." iLor, LLC v. Google, Inc., 631 F.3d 1372, 1378 (Fed. Cir. 2011); Raylon v. Complus Data Innovations, Inc., 700 F.3d 1361, 1369 (Fed. Cir. 2012) (finding the plaintiff's proposed claim construction to be unsupported by the record and so frivolous as to warrant sanctions); MarcTec, 664 F.3d at 919 (finding the plaintiff's proposed claim construction "so lacking in any evidentiary support that assertion of this construction was unreasonable and reflects a lack of good faith").

Once the Court determines that the challenged litigation is objectively baseless, it may examine the litigant's subjective motivation. Prof'l Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc.,508 U.S. 49, 60--61(1993).The Court presumes that a patent infringement assertion is made in good faith. Brooks Furniture, 393 F.3d at 1382. But if the record indicates by clear and convincing evidence that a patentee was manifestly unreasonable in assessing and pressing its infringement allegations, then a court may infer that the claims were brought in bad faith. Eltech Sys. Corp. v. PPG Indus., Inc., 903 F.2d 805, 810--11 (Fed. Cir. 1990). A patent holder's continued pursuit of an infringement claim is manifestly unreasonable if based on "wrongful intent, recklessness, or gross negligence." Phonometrics, Inc. v. Westin Hotel Co., 350 F.3d 1242, 1246 (Fed. Cir. 2003) (quoting Eltech Sys., 903 F.2d at 811).

Even in exceptional cases the decision to award fees and the amount of the award are within the Court's discretion. Brooks Furniture, 393 F. 3d at 1382. The decision is based on a retrospective look at the entire case and does not turn on whether the patentee's position would have been reasonable at the time of filing the complaint or pleading. Highmark, Inc. v. Allcare Health Mgmt. Sys., Inc., 701 F.3d 1351, 1355 (Fed. Cir. 2012).

IV.DISCUSSION

The Court finds that Quali-Tech's infringement suit qualifies as an exceptional case warranting an award of attorneys' fees. Both Quali-Tech's proposed construction of "paint roller" and its assessment and pursuit of its infringement allegations were objectively baseless and lacked any evidentiary support. Further, Quali-Tech's actions, when taken in the aggregate, give rise to an inference that Quali-Tech pursued this litigation in bad faith. For the reasons discussed below, the Court GRANTS Linzer's Motion for an Award of Attorneys' Fees and Costs.

A.Quali-Tech's infringement suit qualifies as an exceptional case

The outcome of this litigation rested upon the resolution of two inquiries:

(1) the construction of the claim term "paint roller," and (2) whether Linzer's product embodied the claim language as construed, either literally or under the doctrine of equivalents. The Court addresses each issue in turn.

1.Quali-Tech's proposed construction of "paint roller" was objectively baseless

Quali-Tech argues that its proposed construction of the term "paint roller" (bare paint retaining material) was reasonable for three reasons: (1) this case presented complex claim-construction issues; (2) the '963 Patent does not explicitly define the term "paint roller"; and (3) it relied on its experts' testimony as the bases for its claim construction. (Opp'n 1, 4.) These contentions fail to save Quali-Tech's proposed claim construction.

First, the Court disagrees with Quali-Tech's insistence of complexity. The ordinary meaning of "paint roller" is readily apparent. The claim language required nothing more than application of the widely accepted meaning of commonly understood words. Ignoring this, Quali-Tech persisted in its argument that "paint roller" would be understood by a person of ordinary skill in the art to mean bare paint-retaining materials-and not a standard, commercially available roller composed of paint-retaining material affixed to a rigid inner core. (Kim Decl. ¶ 13.) This proposed construction fell dismally below the reasonableness threshold. A person of ordinary skill in the art would understand that a paint roller necessarily must include a core of sufficient rigidity to enable the user to mount it on to roller handles and roll paint. Quali-Tech's proposed construction ignored this structural and functional requirement and was plainly untenable.*fn2

Quali-Tech's attempt to salvage its proposed construction with the argument that the '963 Patent does not specifically describe what is meant by the term paint roller similarly fails. (Opp'n 1.) It is true that the '963 Patent does not explicitly define the term "paint roller." But explicit definition is unnecessary. Quali-Tech should be aware that the Court does not look at the ordinary meaning of a claim term in a vacuum. Rather, the Court looks at the ordinary meaning in the context of the entire intrinsic record. Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed. Cir. 2005).

The specification describes a paint roller's characteristics in sufficient detail to demonstrate that Quali-Tech's proposed construction was wholly inconsistent with the language of the '963 Patent. The specification describes an ordinary, standard paint roller that contains an inner core capable of being mounted upon the outer cylinder. ('963 Patent at 2:53--60.) It states that "any commercially available paint roller can be mounted to the paint roller assembly of the present invention." (Id. at 2:57--59 (emphasis added).) This description is also consistent with the prior-art references cited in the '963 Patent, which regularly refer to a paint ...


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