Opinion
Case No. 1:09-CV-105-BLW
02-21-2014
HOYT A. FLEMING, Plaintiff, v. ESCORT, INC., et al., Defendants.
MEMORANDUM DECISION AND
ORDER
INTRODUCTION
The Court has before it nine post-trial motions. The motions are fully briefed and at issue. In summary, the Court will (1) uphold the jury verdict; (2) award Fleming attorney fees as the prevailing party; (3) award pre-judgment and post-judgment interest to Fleming; (4) award sanctions against Escort's counsel for violating a Court Order; and (5) deny Escort's motion to declare Fleming's patents invalid due to his inequitable conduct before the Patent and Trademark Office. The Court's analysis is set forth below.
ANALYSIS
In this action, plaintiff Fleming claimed that defendant Escort manufactured and sold radar detectors that infringed Fleming's '038 and '653 patents. A jury found that Escort had infringed a number of Claims of both patents, and awarded Fleming $750,000. See Special Verdict Form (Dkt. No. 304). Specifically the jury found that the following Escort products were infringing: GX65, Passport 9500, Passport 9500i, and Passport IQ. The jury also found that other Claims of the two patents were invalid because they were anticipated by the prior art. The Court directed Escort to place the $750,000 sum in escrow, and Escort has now complied with that direction. Motion for Attorney Fees & Motion To Award Prevailing Party Status to Defendants
Plaintiff Fleming seeks an award of attorney fees under 35 U.S.C. § 285. That statute states that "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party."
Escort responds that Fleming was not a prevailing party and hence cannot seek fees under § 285. To be a "prevailing party," Fleming must obtain "at least some relief on the merits . . . [and] [t]hat relief must materially alter the legal relationship between the parties by modifying [Escort's] behavior in a way that "directly benefits" [Fleming]. Shum v. Intel, 629 F.3d 1360 (Fed.Cir. 2010) (quoting Farrar v. Hobby, 506 U.S. 103, 111-13 (1992)).
Fleming meets that test here. The jury found that Escort infringed both patents at issue and awarded Fleming $750,000. Escort points out that it prevailed on some issues and convinced the jury to award far less than Fleming demanded. But Farrar held that "[a] judgment for damages in any amount, whether compensatory or nominal, modifies the defendant's behavior for the plaintiff's benefit by forcing the defendant to pay an amount of money he otherwise would not pay." Farrar, 506 U.S. at 113. Here, Escort must pay Fleming $750,000 for the right to make and sell the infringing products. That is relief that materially alters Escort's behavior in a way that directly benefits Fleming. Hence Fleming is a prevailing party.
With that issue resolved, the remaining analysis under § 285 involves a two-step process. First, the Court must determine whether Fleming has proved by clear and convincing evidence that the case is "exceptional." Second, if the Court finds the case to be exceptional, it must then determine whether an award of attorney fees is appropriate. Forest Laboratories v. Abbott Laboratories, 339 F.3d 1323 (Fed.Cir. 2003).
Section 285 is an exception to the "American Rule" concerning attorney fees, and is limited to circumstances in which the award of fees is necessary "to prevent a gross injustice." Aspex Eyewear Inc. v. Clariti Eyewear, Inc., 605 F.3d 1305 (Fed.Cir. 2010). In light of this high standard, recovery of attorney fees under § 285 "clearly was never contemplated to become an ordinary thing in patent suits." Forest Labs., 339 F.3d at 1329. At the same time, "litigation misconduct and unprofessional behavior may suffice, by themselves, to make a case exceptional under § 285." Monolithic Power Systems, Inc. v. O2 Micro Intern, 726 F.3d 1359, 1366-67 (Fed.Cir. 2013). "[T]he aim of § 285 is to compensate a [party] for attorneys' fees it should not have been forced to incur." Kilopass Technology, Inc. v. Sidense Corp., 738 F.3d 1302, 1313 (Fed.Cir. 2013).
In the present case, there is clear and convincing evidence that Escort's counsel pursued a strategy in this litigation that vexatiously increased the fees incurred by Fleming. There were numerous discovery disputes caused by Escort's meritless refusals to turn over discoverable information. Escort forced further litigation over its unsuccessful attempt to add 286 new patent invalidity contentions over 18 months after the deadline for those to be exchanged. On another occasion, Escort vehemently objected to turning over sensitive trade secrets in discovery only to later allow those same "secrets" to be publically disclosed at trial.
This is just a small sample of Escort's vexatious conduct. While it is true that most of Escort's legal work was within the bounds of zealous advocacy, about 10% of the litigation costs incurred by Fleming were caused directly by this vexatious conduct by Escort's counsel. To that degree, the Court finds this an exceptional case under § 285.
An exceptional case finding based on litigation misconduct "usually does not support a full award of attorney's fees." Monolithic Power Systems, 726 F.3d at 1369. Instead, the fee award "must bear some relation to the extent of the misconduct, and compensate a party for the extra legal effort to counteract the misconduct." Id.
Fleming estimates that his total fees would be $1.2 million. This would result in a fee award of about $120,000 under the Court's calculation.
Fleming asks for an opportunity to submit a detailed statement of attorney fees and the Court will grant him that opportunity. The Court will grant this motion for an award of fees under 35 U.S.C. § 285. Assuming the final figure is about $1.2 million, the Court will award 10% of that figure as attorney fees to Fleming under § 285. Motion for Pre-judgment & Post-judgment Interest
Fleming seeks an award of pre-judgment and post-judgment interest. In calculating pre-judgment interest, Fleming alleges that the infringement started on January 8, 2007, and that pre-judgment interest should run from that date at the rate of 12% (under Idaho law) until the date the Judgment was entered (March 27, 2013) in the sum of $750,000. The pre-judgment interest calculated in this manner comes to $559,479.45.
Escort does not dispute the dates or mathematical computations, but argues that Fleming is not entitled to an award because he could have accepted Escort's settlement offer of $1.3 million and received his money long ago. This argument violates the Court's Order that anything related to the settlement process "may not be used in any way against any party." See Order (Dkt. No. 92). Because of that Order, there is nothing in the record detailing the settlement offer and so the Court cannot evaluate the role it played in this litigation. That was the entire point: The Court-ordered confidentiality was intended to promote a full and frank discussion during the settlement conference. Consequently, the Court rejects Escort's attempt to use its settlement offer to its advantage, and will take up this issue in more detail below in ruling on Fleming's motion for sanctions.
Escort also argues that Fleming delayed filing this suit and cannot benefit from that delay with an award of pre-judgment interest. But Escort raised these same arguments earlier and they were rejected. See Memorandum Decisions (Dkt. Nos. 169 & 336). The Court finds no reason to reconsider that ruling.
The award of pre-judgment interest is "the rule, not the exception." Sanofi-Aventis v. Apotex, Inc., 659 F.3d 1171, 1177 (Fed.Cir.2011). An award of pre-judgment interest carries out Congress's "overriding purpose of affording patent owners complete compensation" since a patentee's damages also include the "forgone use of the money between the time of infringement and the date of judgment." Whitserve, LLC v. Computer Packages, Inc. 694 F.3d 10, 36 (Fed.Cir. 2012). An award of pre-judgment interest - starting from the date of infringement, which is when royalty payments should have started - "merely serves to make the patent owner whole, since his damages consist not only of the value of the royalty payments but also of the forgone use of the money between the time of infringement and the date of judgment." Sanofi-Aventis v. Apotex Inc., 659 F.3d 1171, 1179 (Fed.Cir. 2011) (quoting Gen. Motors Corp. v. Devex Corp., 461 U.S. 648, 655-56 (1983)).
The Court shall therefore award pre-judgment interest calculated on the Judgment sum of $750,000, starting on January 8, 2007, and running at the rate of 12% until the date the Judgment was entered (March 27, 2013). These figures and dates are not disputed by Escort. The pre-judgment interest calculated in this manner comes to $559,479.45.
Post-judgment interest is governed by 28 U.S.C. § 1961(a), which states that "[i]nterest shall be allowed on any money judgment in a civil case recovered in a district court." The purpose of § 1961 is to "ensure[ ] that the plaintiff is further compensated for being deprived of the monetary value of the loss from the date of ascertainment of damages until payment by defendant." American Tel. & Tel. Co. v. United Computer Systems, Inc., 98 F.3d 1206, 1209 (9th Cir. 1996). Given the compensatory purpose of § 1961, courts have computed post-judgment interest on the sum of the verdict plus the amount of pre-judgment interest. Fuchs v. Lifetime Doors, Inc., 939 F.2d 1275, 1280 (5th Cir. 1991). The Court will do likewise. The Court finds that Fleming is entitled to post-judgment interest at the rate set by § 1961, from March 27, 2013, the date of the Judgment, on the sum of the Judgment plus the sum of pre-judgment interest, for a total sum of $1,309,479.45. Fleming has calculated post-judgment interest to be paid each year as follows:
Escort does not dispute this calculation, and the Court will order it. Motion for On-Going Royalty or an Injunction
Interest
Interest payment date
$1,501.42
January 1, 2014
$1,966.47
January 1, 2015
$1,969.42
January 1, 2016
$1,972.38
January 1, 2017
$1,975.33
January 1, 2018
$1,978.30
January 1, 2019
$1,981.26
January 1, 2020
$1,984.24
January 1, 2021
In this motion, Fleming seeks to (1) enjoin any further sales of Escort's infringing devices or (2) receive an ongoing royalty for each device sold. The issues raised in this motion have been fully resolved in a later-filed case involving the same parties, Fleming v. Escort 1:12-CV-66-BLW. In that case, Fleming sought damages from Escort for continuing to sell the radar detectors that infringed the '038 and '653 patents. Escort responded that Fleming was barred from such damages because the jury verdict in this case represented a paid-up license covering both past and future use of the patented technology. After reviewing the jury instructions and verdict in this case, the Court agreed with Escort and ruled as follows:
In conclusion, the jury's verdict, when read together with the jury instructions, demonstrates that the jury's verdict was intended to require Escort to pay $750,000 for a paid-up license covering all pastMemorandum Decision (Dkt. No. 61) in Fleming v Escort 1:12-CV-66-BLW at pg. 7. Accordingly, the Court will deny this motion. Fleming's Motion for Judgment re Abandonment, Suppression or Concealment
and future use of the technology set forth in '038 and '653 patents. Escort has paid that sum into an escrow account as requested by Fleming until all appeals are completed. In essence, Escort has a paid-up license. Fleming's attempt to receive further damages in this lawsuit for selling devices infringing the '038 and '653 patents is barred by the prohibition against a double recovery.
Fleming seeks judgment on his claim that Escort failed to carry its burden of proving that Orr did not suppress or conceal his invention. The jury found otherwise on the Special Verdict Form, answering that Escort had carried its burden of proof.
That verdict, however, was advisory because "[w]hether suppression or concealment has occurred is a question of law". Apotex U.S.A., Inc. v. Merck & Co., 254 F.3d 1031, 1036 (Fed. Cir. 2001). Thus, the Court must now determine if Escort has carried its burden of proof on this issue.
At trial, Escort argued that Robert Orr had conceived of his invention in 1988 and reduced it to practice in 1996, well-ahead of the time he filed for a patent in 1999. The issue at trial was whether Escort suppressed or concealed Orr's invention between 1996 and 1999, because the product was not placed on the market during that time and no patent application - with its accompanying public record - was filed until 1999. If Escort suppressed or concealed Orr's invention between 1996 and 1999, Escort would not get the benefit of the 1996 reduction to practice in fixing the date for the invention.
An issued patent is presumed valid. 35 U.S.C. § 282. A patent may be invalidated if "the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it." 35 U.S.C. § 102(g). Escort has the burden of proving by clear and convincing evidence that Orr did not suppress or conceal his invention. Apotex, 254 F.3d at 1037.
The concealment must be intentional. Concealment "refers to situations in which an inventor designedly, and with the view of applying it indefinitely and exclusively for his own profit, withholds his invention from the public." Eolas Technologies, Inc. v. Microsoft Corp., 399 F.3d 1325, 1333 (Fed. Cir. 2005). Intentional concealment can be inferred "based upon the prior inventor's unreasonable delay in making the invention publicly known." Dow Chem. Co. v. Astro-Valcour, Inc., 267 F.3d 1334, 1342 (Fed. Cir. 2001). On the other hand, there is no suppression or concealment where there is "slow (even fitful), but inexorable progress toward disclosure . . . ." Fujikawa v. Wattanasin, 93 F.3d 1559, 1568, 1567 (Fed. Cir. 1996). For example, the Federal Circuit found no suppression or concealment where the inventor delayed about 17 months from reducing the invention to practice and filing for a patent because he was "engaged in significant steps towards perfecting the invention," and because of the "complexity of the subject matter." Id. at 1568-69. On the other hand, evidence that the delay was simply due to the inventor's desire to retain the invention as a trade secret would be evidence of concealment. Apotex, 254 F.3d at 1039.
There is no doubt that Orr kept his invention from public view - he admitted as much from the stand during his testimony. If his intent was to retain a trade secret, he would be guilty of concealment under § 102(g). But if his intent was to diligently work to refine his invention with the goal of eventually filing a patent application, he is not guilty of concealment under § 102(g).
Under this standard, the Court finds, after an independent review, that it agrees with the jury verdict, which was only advisory. There is clear and convincing evidence that Orr's delay in filing his patent application was due to his attempts to refine his invention. The subject matter was complex, and Escort's predecessor (Orr's employer at the time) struggled financially, filing for bankruptcy in 1997. All of this supported Orr's own testimony that he was diligently attempting to perfect his invention to support a patent filing, that was eventually made in 1999.
For all of these reasons, the Court will deny this motion. Motion for Judgment on Issue of Patent Validity
The jury found that Claims 1, 18, 45, 47, and 48 of the '038 patent were invalid in light of prior art, that included Orr's Prior Invention and patents by Hoffberg, Ross, and Valentine. Fleming seeks to overturn the jury's verdict under Rule 50(b), arguing that Escort failed to produce sufficient evidence of invalidity regarding these five Claims.
Before turning to the arguments of the parties, the Court must first consider the impact of the rejection of these Claims by the Patent and Trademark Office (PTO) in a reexamination proceeding. On March 14, 2013, after the jury's verdict in this case, the PTO issued an "Office Action" that rejected Claims 1-8, 18, 25, 26, and 45-48 as obvious in light of the prior art represented by the Hoffberg and Ross patents. See Exhibit A (Dkt. No. 365-1).
It is well-established that the cancellation of a patent's claims in a reexamination proceeding "cannot be used to reopen a final damages judgment ending a suit based on those claim." Fresenius USA, Inc. v. Baxter Intern., Inc., 721 F.3d 1330, 1346 (Fed.Cir. 2013). It is true that the PTO's reexamination decision was issued about two weeks before this Court entering Judgment. See Judgment (Dkt. No. 337). The PTO issued its reexamination decision on March 14, 2013, and about two weeks later on March 27, 2013, the Court filed its Judgment. But the reexamination process is not complete until the PTO issues a Certificate pursuant to 35 U.S.C. § 307 and 37 C.F.R. § 1.570. No such Certificate has yet issued, and the PTO's reexamination decision is presently on appeal before the Board of Patent Appeals and Interferences. See Application No. 90/012,220. Because the validity of the Claims has not yet been finally adjudicated, Fresenius dictates that any subsequent issuance of a Certificate invalidating those Claims will have no impact on these proceedings because a Judgment has been entered.
The appeal is noted at http://portal.uspto.gov/pair/PublicPair.
The Court will now turn to the arguments of the parties. Fleming argues that the jury's verdict declaring those Claims invalid should be set aside because Escort failed to present the expert testimony required to explain in detail how each claim element is disclosed in the prior art references. Specifically, with regard to the impact of the prior art reference known as Orr's Prior Invention, Fleming argues the Court must ignore the testimony of Steven Orr (the purported inventor of Orr's Prior Invention) and consider only the testimony of Escort's expert Dr. Grindon.
Orr did testify that he had no expertise in interpreting patent claims. But Orr was qualified to describe in detail the structural and functional aspects of his invention, and he did so in detail. See Trial Tr. (Dkt. No. 322) at 120-27. His factual description of his invention aligned with the language of the Claims at issue here. Id. Following Orr's testimony, Dr. Grindon linked Orr's factual testimony to the Claim language and testified that Orr's Prior Invention anticipated each Claim element. See Trial Tr. (Dkt. No. 324) at 50-58. He also testified that there was motivation for one skilled in the art to combine the other prior art patents - Hoffberg, Ross, and Valentine - with Orr's Prior Invention to render the invention described in the '038 patent obvious. Id. at 58-70.
The issue raised by Fleming is whether the Court must ignore the non-expert testimony of Orr in resolving the issue whether the '038 patent was anticipated by the prior art. There is no rigid requirement of expert testimony in all cases where obviousness is an issue. Wyers v. Master Lock Co., 616 F.3d 1231, 1242 (Fed.Cir.2010). In so ruling, the Federal Circuit relied on the Supreme Court holding in KSR International Co. v. Teleflex Inc. 550 U.S. 398, 415 (2007), requiring an "expansive and flexible approach" in determining whether a patented invention was obvious at the time it was made. In particular, KSR emphasized the role of common sense: "Rigid preventative rules that deny factfinders recourse to common sense . . . are neither necessary under our case law nor consistent with it." Id. at 421. Following KSR, the Federal Circuit has held that the legal determination of obviousness, especially where the technology at issue is "easily understandable," "may include recourse to logic, judgment, and common sense, in lieu of expert testimony." Wyers, 616 F.3d at 1239, 1242. "Thus, in appropriate cases, the ultimate inference as to the existence of a motivation to combine references may boil down to a question of 'common sense." Id. at 1240.
Escort established its defense based on Orr's Prior Invention by using both the factual account of Orr to establish the structural and functional aspects of his invention and the testimony of an expert, Dr. Grindon, to tie these facts to an obviousness defense. Given KSR's holding that the obviousness inquiry is to be "expansive and flexible," the Court refuses to ignore the testimony of Orr in determining whether Escort established the obviousness defense. KSR, 550 U.S. at 415.
Obviousness is a question of law based on underlying findings of fact. In re Enhanced Sec. Research, LLC, 739 F.3d 1347, 1351 (Fed.Cir. 2014). The differences between the claimed invention and the prior art as well as what a reference actually teaches are questions of fact. Id. Orr and Dr. Grindon established the similarities between Orr's Prior Invention and the Claims in Fleming's '038 patent. On a Rule 50(b) motion, the Court cannot question the credibility of Orr's account concerning how he invented the radar detector. See Experience Hendrix LLC v Hendrixlicensing.com Ltd., 2014 WL 306600 (9th Cir. Jan. 29 2014). Dr. Grindon testified as to what was taught by the Hoffberg, Ross, and Valentine patents and described the motivation of one skilled in the art to combine those prior art patents with Orr's Prior Invention to render the invention described in the '038 patent obvious. This is sufficient, and for that reason, the Court will deny Fleming's motion for judgment as a matter of law on the obviousness issue. Fleming's Motion for Judgment for Lack of Corroboration
Fleming argues that Escort failed to present sufficient corroborating evidence to establish Orr's Prior Invention as prior art that anticipated Fleming's patents. There is no dispute that Escort was required to submit more than Orr's testimony to establish that Orr's Prior Invention anticipated Fleming's patents. An individual who claims to have reduced to practice the patented device prior to the patent must offer more than just his testimony to prove his claim. Medichem, S.A. v. Rolabo, S.L., 437 F.3d 1157 (Fed.Cir. 2006). This corroboration requirement "provides an additional safeguard against courts being deceived by inventors who may be tempted to mischaracterize the events of the past through their testimony." Id. at 1170.
The sufficiency of the corroboration is evaluated under a "rule of reason" standard. Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333, 1346 (Fed.Cir. 2013). In applying the "rule of reason" test, all pertinent evidence is examined in order to determine whether the testimony is credible. Id. This includes both documentary evidence and testimony from others. Id. In analyzing the sufficiency of corroborative evidence, the Court must keep in mind that "corroboration is fundamentally about credibility . . . ." Medichem, 437 F.3d at 1171.
Fleming argues that the corroboration evidence must corroborate every element of every Claim that Escort seeks to invalidate. Yet Fleming cites no case so holding. Fleming's promotion of a rigid standard does not align with the rule of reason and ignores KSR's holding that obviousness is to be judged by an "expansive and flexible" standard. KSR, 550 U.S. at 415. Ultimately, the corroboration requirement is intended to determine credibility, and such evidence could establish the credibility of the purported inventor without establishing every element of every Claim. That is the case here. Orr produced many documents that corroborated his testimony, and his allegations were supported by the testimony of John Kuhn and Tom Humphrey. The jury reasonably concluded that the corroboration requirement was satisfied, and the Court will accordingly deny this motion. Motion for Sanctions
Fleming seeks sanctions against defense counsel for willfully violating an Order of this Court. The Order at issue was entered by Magistrate Judge Bush prior to holding a settlement conference in this case. That Order states in pertinent part as follows:
All oral statements, written documents, or other materials considered during the settlement procedure shall be held in confidence and may not be used in any way against any party to this litigation.See Order (Dkt. No. 92) at ¶ 10. Despite this prohibition, Escort's counsel argues to this Court - in a number of post-trial motion briefs - that during the settlement conference, Fleming rejected Escort's offer of $1.3 million to settle and instead "held out for a lottery-type verdict . . . ." See Escort's Brief (Dkt. No. 351) at pp. 2-3, 7. For example, this was the principal argument advanced by Escort to show that it was the prevailing party in this litigation.
Escort violated the Order by revealing the settlement offer and Fleming's response, matters that - according to the Order - "shall be held in confidence and may not be used in any way against any party to this litigation." In response, Escort argues that it revealed nothing to the jury. But the Order's ban is not limited to the jury only. The Order states that settlement material "may not be used in any way against any party to this litigation." This broad wording clearly prohibits revealing settlement offers in the briefing on post-trial motions to this Court.
Escort argues that "it merely recited to the Court what Fleming had already disclosed to it." See Escort Brief (Dkt. No. 366) at p. 3. In support, Escort cites Fleming's Motion for Entry of Judgment (Dkt. No. 130). If Escort is arguing that Fleming's Motion somehow opened the door to Escort's violation of the Court's Order, Escort is wrong. Fleming's Motion contains absolutely nothing regarding the settlement conference, and indeed was filed well-before the settlement conference even took place.
Escort cites numerous cases holding that settlement offers are relevant to the issues raised by the pending motions. But Escort cites no case holding that a party can willfully violate a court order to bring that settlement material to the Court's attention.
This Court has the inherent power to sanction a party or its lawyers if they act in willful disobedience of a court's order. Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015, 1035 (9th Cir. 2012). A "willful" violation of a court order "does not require proof of mental intent such as bad faith or an improper motive, but rather it is enough that a party acted deliberately." Id.
There is no doubt that Escort's counsel acted deliberately here. They do not argue otherwise in their briefing - instead they argue that they were justified in violating the Order, an argument the Court has rejected above.
An appropriate sanction is an award of attorney fees levied against counsel, rather than the party, and measured by the fees incurred by opposing counsel in his attempts to block the improper use of the confidential information. Id. Here, Fleming had to respond to Escort's use of settlement material in a number of briefs. It would be very difficult to cull out the time Fleming's counsel spent responding to that issue as opposed to the time he spent responding to all other issues. A more accurate method would be to award the amount of fees Fleming incurred in filing his motion for sanctions, and then increasing that sum by 20% representing the time Fleming's counsel had to spend responding in his various response briefs. The Court will accordingly grant the motions for sanctions along these lines. Motion to Vacate Judgment
Escort seeks to vacate the Court's Judgment on the ground that Fleming is guilty of inequitable conduct before the PTO. Specifically, Escort argues that Fleming represented to the PTO that the Hoffberg and Murakami references only disclose a radar detector with a remote GPS unit (that is external to the radar detector). Escort argues that Fleming's statements constitute misrepresentations and that they have now been rejected by four different patent examiners at the PTO. Escort asks the Court to find that Fleming has committed inequitable conduct before the PTO, a finding that Escort argues would result in Fleming's patents being declared invalid.
To prove inequitable conduct, Escort must show by clear and convincing evidence that Fleming (1) misrepresented or omitted information material to patentability, and (2) did so with specific intent to mislead or deceive the PTO. Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276, 1285 (Fed.Cir. 2011). Because Fleming did provide the Hoffberg and Murakami references to the PTO, this is not a failure-to-disclose case. Rather, the issue here turns on whether Fleming's interpretation of those prior art references constitutes inequitable conduct.
Patent applicants are required to prosecute patent applications with candor, good faith, and honesty. Honeywell Int'l Inc. v. Universal Avionics Sys. Corp., 488 F.3d 982, 999 (Fed.Cir.2007). At the same time, an applicant "is free to advocate [his] interpretation of [his] claims and the teachings of prior art." Innogenetics, N.V. v. Abbott Laboratories, 512 F.3d 1363, 1379 (Fed.Cir. 2008). When the advocate has submitted the prior art to the PTO, the patent examiner "is free to accept or reject the [advocate's] arguments distinguishing its invention from the prior art." Id. "While the law prohibits genuine misrepresentations of material fact, a prosecuting attorney is free to present argument in favor of patentability without fear of committing inequitable conduct." Rothman v. Target Corp., 556 F.3d 1310, 1328-29 (Fed.Cir.2009). The balance between candor and advocacy are explored in two cases discussed below.
In Semiconductor Energy Lab.Co., Ltd. v. Samsung Electronics, 204 F.3d 1368 (Fed.Cir. 2000), counsel committed inequitable conduct in misrepresenting prior art. The prior art was a Japanese reference, and while counsel submitted a full translation of the reference, he also submitted a partial translation that omitted crucial passages detrimental to his case. The Federal Circuit found this deceptive, holding that by submitting the partial translation, the applicant "left the examiner with the impression that the examiner did not need to conduct any further translation or investigation." Id. at 1377.
In Rothman, counsel made legal arguments to the patent examiner about prior art that his opponent characterized as misleading and deceptive. The Federal Circuit disagreed, finding that an attorney's "attempt to characterize . . . prior art in a manner favorable to the attorney's client" was "nothing more than attorney argument" and did not constitute inequitable conduct. Id. at 1329.
This case is far closer to Rothman than to Samsung. Fleming and his counsel were engaged in zealous advocacy in arguing for their interpretation of the Hoffberg and Murakami references. The Court can find no attempt to mislead or deceive; the patent examiners had access to the documents Fleming and his counsel were interpreting and the entire process was open and transparent. Consequently, the Court will deny Escort's motion to vacate the Judgment.
ORDER
In accordance with the Memorandum Decision above,
NOW THEREFORE IT IS HEREBY ORDERED, that the motion for attorney fees (docket no. 338) is GRANTED, and that Escort's motion to enter an order awarding prevailing status (docket no. 343) is DENIED. Fleming shall submit to the Court a petition detailing his fees and the Court will award a precise sum equal to a percentage of that total, pursuant to the discussion above.
IT IS FURTHER ORDERED, that the motion for pre-judgment and post-judgment interest (docket no. 340) is GRANTED. The Court shall enter an Amended Judgment with precise figures once the attorney fee sums are calculated.
IT IS FURTHER ORDERED, that the motion for ongoing royalty or injunction (docket no. 341) is DENIED.
IT IS FURTHER ORDERED, that Fleming's motions for judgment as a matter of law (docket nos. 345, 346 & 347) are DENIED.
IT IS FURTHER ORDERED, that Fleming's motion for sanctions (docket no. 353) is GRANTED and that Fleming shall submit to the Court a petition detailing the fees incurred in preparing the motion for sanctions.
IT IS FURTHER ORDERED, that Escort's motion to vacate judgment due to Fleming's inequitable conduct (docket no. 368) is DENIED.
__________
B. Lynn Winmill
Chief Judge
United States District Court