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Cambrian Sci. Corp. v. Cox Communs., Inc.

United States District Court, C.D. California, Southern Division

January 6, 2015

CAMBRIAN SCIENCE CORPORATION, Plaintiff,
v.
COX COMMUNICATIONS, INC., ET AL, Defendants

Page 1112

FOR PLAINTIFF: Joseph Pia, Pia Anderson Dorlus Reynad & Moss LLC, Salt Lake City, UT; Alan M Kindred, Leech Tishman Fuscaldo and Lampl LLP, Pasadena, CA; C Dale Quisenberry, Polasek Quisenberry and Errington LLP, Bellaire, TX.

FOR DEFENDANTS: Michael A Amon, Fish and Richardson PC, San Diego, CA; Audra A Dial, Kilpatrick Townsend and Stockton LLP, Atlanta, GA.

Page 1113

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR ATTORNEYS' FEES, DKT. NO. 379; GRANTING DEFENDANT COX COMMUNICATIONS, INC.'S MOTION FOR ATTORNEYS' FEES, DKT. NO. 377.

Andrew J. Guilford, United States District Judge.

INTRODUCTION

This case involves motions for attorney fees under 35 U.S.C. § 285 in a difficult case. Defendants Cox Communications, Inc. (" Cox" ); XO Communications Services, LLC; Global Crossing Telecommunications, Inc.; Level 3 Communications LLC; 360networks (USA), Inc.; Electric Lightwave, LLC, dba Integra Telecom; IXC Holdings, Inc. dba Telekenex (collectively, " Customer Defendants" ); and Infinera Corporation (" Infinera" ) (collectively, " Defendants" ) have filed a Motion for Attorneys' Fees (" Defendants' Motion" ), seeking an award of the attorney fees paid to defend the case at least since the June 17, 2013 claim construction order. (Dkt. No. 238.) Cox filed a separate Motion for Attorneys' Fees (" Cox Motion" ) the same day, seeking the attorney fees Cox separately paid for the whole case.

The Defendants' Motion is GRANTED IN PART and DENIED IN PART. The Cox Motion is GRANTED.

BACKGROUND

In 2008, Plaintiff Cambrian Science Corporation's (" Cambrian" ) predecessor-in-interest contacted Defendant Infinera, the manufacturer of the accused products, regarding U.S. Patent No. 6,775,312 (" '312 Patent" ), and threatened to bring an action for infringement. (Defs.' Mot., Dkt. No. 379-1 at 3-4.) On July 7, 2011, Cambrian filed its Complaint against the Customer Defendants, alleging direct infringement of the '312 Patent. (Compl., Dkt. No. 1.) On August 24, 2011, Cambrian filed its First Amended Complaint, adding Infinera as a defendant. (First Am. Compl., Dkt. No. 29.) The Court issued a claim construction order on June 17, 2013. (Dkt. No. 238.) Fact discovery closed on November 22, 2013. (Dkt. No. 251.) Defendants filed a motion for summary judgment on April 24,2014. (Dkt. No. 301.) The Court granted that motion on June 13, 2014, and entered final judgment in favor of Defendants on July 2, 2014. (Dkt. Nos. 370, 374.)

LEGAL STANDARD

The Patent Act provides that " [t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." 35 U.S.C. § 285. In this statute, " exceptional" has its ordinary meaning of " 'uncommon,' 'rare,' or 'not ordinary.'" Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S.Ct. 1749, 1756, 188 L.Ed.2d 816 (2014). Thus, " an 'exceptional' case is simply one that stands out from others with respect to the

Page 1114

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." Id. Section 285 discourages certain " exceptional" conduct by imposing the cost of bad decisions on the decision maker.

District courts determine whether a case is exceptional " considering the totality of the circumstances." Id. Fees may be awarded where " a party's unreasonable conduct--while not necessarily independently sanctionable--is nonetheless" exceptional. Id. at 1757. " A case presenting either subjective bad faith or exceptionally meritless claims may sufficiently set itself apart from mine-run cases to warrant a fee award." Id. A party must prove its entitlement to fees by a preponderance of the evidence. Id. at 1758.

In the companion case to Octane Fitness, the Supreme Court held that " [b]ecause § 285 commits the determination whether a case is 'exceptional' to the discretion of the district court, that decision is to be reviewed on appeal for abuse of discretion." Highmark Inc. v. Allcare Health Mgmt. Sys., 134 S.Ct. 1744, 1748, 188 L.Ed.2d 829 (2014). The abuse-of-discretion standard applies to " all aspects of a district court's § 285 determination." Id. at 1749.

Federal Rule of Civil Procedure Rule 54(d)(2)(C) provides that " [t]he court may decide issues of liability for fees before receiving submissions on the value of services."

ANALYSIS

1. DEFENDANTS' MOTION

1.1 Substantive Strength of Cambrian's Litigating Position

1.1.1 Infringement Claim Against Generation 2 Devices

Defendants argue that Cambrian's infringement claim against the Generation 2 photonic integrated circuits was unusually meritless since the beginning of the case, and even more so after the June 17, 2013 claim construction order. (Defs.' Mot., Dkt. No. 379-1 at 1-2.) Cambrian responds that its litigating position was not unreasonable even after the claim construction order. (Pl.'s Opp'n, Dkt. No. 388 at 6.)

To rule on Defendants' motion for summary judgment, the Court had to decide several issues that were not fully resolved during claim construction, either because they were not squarely presented at that time or because they were factual in nature. Among these were whether the '312 Patent disavowed active-to-passive transitions within a photonic integrated circuit and whether the use of a separate arrayed waveguide grating and semiconductor optical amplifier on the same chip met the Court's construction of an " active waveguide coupler." (Order Granting Defs.' Mot. for Summ. J., Dkt. No. 370 at 38-43.) Although both of these issues were ultimately resolved in Defendants' favor, Cambrian's positions on these questions were not exceptionally meritless.

Cambrian's " black box" theory at least plausibly satisfied the asserted claims by identifying a passive arrayed waveguide grating and an active semiconductor optical amplifier as subcomponents of an " active waveguide coupler." Because the semiconductor optical amplifier is active under the Court's construction, it was not exceptionally unreasonable to argue that the two components together could make up an " active waveguide coupler," since such a combination was not specifically addressed by the Court's claim construction.

Merely losing at summary judgment is not a basis for an ...


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