United States District Court, C.D. California
Dr. Joseph Neev
Alcon LenSx, Inc
Attorneys for Plaintiffs: Not Present.
Attorneys for Defendants: Not Present.
Honorable GEORGE H. KING, CHIEF UNITED STATES DISTRICT JUDGE.
CIVIL MINUTES - GENERAL
Proceedings: (In Chambers) Order re: Joint Notice of Motion for Determination Regarding Dr. Neev's Petition to Vacate Arbitration Award; LenSx's Motion to Confirm Arbitration Award (Dkt. 13)
This matter is before us on the above-captioned Motion. We have considered the papers filed in support of and in opposition to the Motion and deem this matter appropriate for resolution without oral argument. L.R. 7-15. As the Parties are familiar with the facts, we will repeat them only as necessary. Accordingly, we rule as follows:
Respondent Alcon LenSx, Inc. (" Respondent") is a company that designs and manufactures a device used for cataract surgery called the LenSx Laser System. (Dkt. 13, Mot., Ex. 8 at 2.) Petitioner Dr. Joseph Neev (" Petitioner") is an inventor who owns a number of patents, including U.S. Patent No. 6, 482, 199 (" the '199 patent"). (Id.) In 2009, LenSx's founder approached Petitioner to license some of his patents. (Id. at 3.) The parties reached an agreement (the " Agreement") under which LenSx licensed the '199 patent from Petitioner in return for an annual royalty and additional royalties for any products sold by LenSx that relied on the '199 patent. (Id. at 4.) In 2010, LenSx was acquired by Alcon. (Id.) In 2011, Respondent then began selling its LenSx Laser System. (Id.) Respondent paid no royalties to Petitioner for the sales of the system. (Id. at 4-5.) Petitioner claimed that he was owed royalties, and eventually, to resolve the dispute, Respondent filed a Demand for Arbitration with JAMS. (Id. at 6.) Petitioner filed a Response to the Demand for Arbitration, claiming among other things that the LenSx Laser System infringes the '199 patent. (Id.)
On January 29, 2014, the Arbitrator issued the Partial Final Award (" PFA"). The Arbitrator found that the LenSx Laser System did not infringe on the '199 patent and that Respondent did not owe any additional royalties. (Id. at 29.) The Arbitrator ordered further briefing on whether Respondent was entitled to attorney's fees and costs. (Id.) On March 26, 2014, the Arbitrator issued a Final Award (" FA"), awarding Respondent $65, 310.39 in costs but no attorney's fees. (Ex. 14 at 3.) Petitioner seeks to vacate the PFA and FA. Petitioner claims that (1) the Arbitrator erred in ruling that the LenSx Laser System does not infringe the '199 patent and (2) the Arbitrator was not empowered to award costs under the Agreement. (Mot. at 1-3.)
II. Legal Standard
A federal court must confirm an arbitration award " unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11" of Title 9 of the United States Code. 9 U.S.C. § 9. Section 10(a) permits vacatur in only limited circumstances, such as " where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made." 9 U.S.C. § 10(a)(4). An arbitrator exceeds his power, not when he merely interprets or applies the governing law incorrectly, but when his award is completely irrational or exhibits a manifest disregard of law. Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 F.3d 987, 997 (9th Cir. 2003) (internal quotation marks and citations omitted). " 'Manifest disregard of the law' means something more than just an error in the law or a failure on the part of the arbitrators to understand or apply the law." Mich. Mut. Ins. Co. v. Unigard Sec. Ins. Co., 44 F.3d 826, 832 (9th Cir. 1995)). " It must be clear from the record that the arbitrators recognized the applicable law and then ignored it." Id. Manifest disregard of the facts is not an independent ground for vacatur. Coutee v. Barington Capital Grp., L.P., 336 F.3d 1128, 1133 (9th Cir. 2003). If the Arbitrator analyzed a factual dispute and resolved it in favor of one of the Parties, we have no authority to re-weigh the evidence. Id. at 1134. Ultimately, the scope of review afforded to district courts is " extremely limited." Kyocera Corp., 341 F.3d at 998.
A. Claim 5
The '199 patent describes an invention for using a femtosecond laser to perform cataract surgery. (PFA at 14-15.) Respondent's LenSx Laser System is also a system for using a femtosecond laser to perform cataract surgery. (Id.) The Arbitrator found that the two systems differ in several respects, most of which are not relevant for our purposes. Broadly speaking, the Arbitrator found that the invention described in the '199 patent works by minimizing collateral damage caused to the eye by the laser during cataract surgery ...