DS Advanced Enterprises, LTD. v. Lowe's Companies, Inc.
- Proceeding
- district
- Area
- civil
- Panel
- Cathy Ann Bencivengo (author)
Analysis
The court considered defendant Lowe's Home Centers' motion to find the case exceptional under 35 U.S.C. § 285 and to award attorney fees against plaintiff DS Advanced Enterprises and its counsel under 35 U.S.C. § 1927. The court denied both requests, finding that while the plaintiff's claim construction was objectively unreasonable, it was not asserted in bad faith or for an improper purpose.
| What the court decided | The model |
|---|---|
Motion to find case exceptional under 35 U.S.C. § 285 and award attorney fees denied“Lowe’s HC’s motion to find the case exceptional and request for an award of attorneys’ fees and expenses pursuant to 35 U.S.C. § 285 is DENIED.” | agree with court The court correctly applied the *Octane Fitness* standard, which requires a case to stand out from others with respect to the substantive strength of a party's litigating position or the unreasonable manner in which the case was litigated. The court found that while the plaintiff's construction of 'metal housing' was 'almost frivolous' and contrary to the plain meaning of the claim, the plaintiff did not act in bad faith or for an improper purpose (such as settlement extraction). Under the totality of the circumstances, a position that is merely 'wrong' or objectively unreasonable, without evidence of subjective bad faith or improper motive, does not necessarily rise to the level of an 'exceptional case' warranting a fee shift. The court's reliance on the lack of bad faith/improper purpose aligns with the discretionary nature of § 285 awards. |
Motion for attorney fees against plaintiff's counsel under 35 U.S.C. § 1927 denied“The request for a fee award against counsel is also DENIED.” | agree with court Section 1927 allows fees when counsel multiplies proceedings unreasonably and vexatiously. The court found that while counsel's style was 'overly aggressive' and 'somewhat condescending,' it did not rise to the level of intentional harassment or bad faith required for a § 1927 award. The court distinguished this from the separate Protective Order violations which were already sanctioned. This application is consistent with the high bar for § 1927 sanctions, which require a showing of intent to harass or delay. |
Plaintiff's argument that the fee motion was untimely/waived rejected“DS Advanced’s contention that the motion should be deemed waived as untimely is rejected.” | agree with court The court noted that final judgment had not yet been entered due to a pending sanctions motion and a specific scheduling order for the exceptional case determination. Therefore, filing the motion before final judgment was timely. This is a procedural determination based on the docket history and prior orders. |
The order itself: sound — The order is sound. It correctly identifies the legal standard for § 285 and § 1927 fee awards. It applies the standard to the specific facts of the case, distinguishing between an objectively unreasonable position (which was present) and a position asserted in bad faith or for an improper purpose (which was not). The court explicitly addresses the plaintiff's timeliness argument and the defendant's reliance on other litigation and protective order violations, explaining why those factors did not lead to a fee award in this specific proceeding. The reasoning is clear and directly answers the motion.
Opinion
1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 DS ADVANCED ENTERPRISES, Ltd., Case No.: 3:23-cv-01335-CAB-JLB 12 Plaintiff, ORDER ON DEFENDANT’S 13 v. MOTION FOR ATTORNEYS’ FEES AND RELATED EXPENSES 14 LOWE’S HOME CENTERS, LLC, 15 Defendant. [Doc. No. 77] 16 17 18 Before the Court is a motion brought by defendant Lowe’s Home Centers, LLC 19 (“Lowe’s HC”) as the prevailing party in this litigation, for the Court to find this case 20 exceptional pursuant to 35 U.S.C. § 285, and to award defendant its reasonable attorney 21 fees and expenses against plaintiff DS Advanced Enterprises, Ltd. (“DS Advanced”). 22 Lowe’s HC also seeks an award of fees and expenses against plaintiff’s counsel pursuant 23 to 35 U.S.C. § 1927, asserting that counsel’s bad faith conduct unreasonably multiplied the 24 proceedings. [Doc. No. 77.] DS Advanced filed an opposition. [Doc. No. 81.] Lowe’s 25 HC filed a reply. [Doc. No. 84.] The Court determined this motion could be decided on 26 the papers. Civ.LR 7.1.d.1. 27 A district court in exceptional cases may award reasonable attorney fees and non- 28 taxable costs to the prevailing party. 35 U.SC. § 285. “An exceptional case is simply one 1 that stands out from others with respect to the substantive strength of a party’s litigating 2 position . . . or the unreasonable manner in which the case was litigated.” Dragon 3 Intellectual Prop. v. Dish Network, 101 F.4th 1366 1369-70 (Fed. Cir. 2024) citing Octane 4 Fitness LLC v. ICON Health & Fitness, Inc. 572 U.S. 545, 554 (2014). 5 A district court may determine whether a case is exceptional in the case-by-case 6 exercise of its discretion considering the totality of the circumstances. OneSubsea IP UK 7 Ltd. v. FMC Tech., Inc., 68 F.4th 1285, 1294 (Fed. Cir. 2023). A party seeking fees under 8 § 285 must prove the case is exceptional by a preponderance of the evidence. Id., citing 9 Octane Fitness, 572 U.S. at 554.1 10 As an initial matter the Court finds that Lowe’s HC’s fee motion was submitted 11 timely. Although the Court granted Lowe’s HC’s summary judgment of non-infringement 12 on September 30, 2024, the order specifically stated final judgment would not be entered 13 until a pending motion for sanctions was resolved. [Doc. No. 67.] Further on October 15, 14 2024, the Court issued a scheduling order for the filing of an exceptional case determination 15 after entry of final judgment, which still has not occurred. [Doc. No. 74.] That order 16 notwithstanding, Lowe’s HC filed its motion on October 23, 2024, in advance of the entry 17 of final judgment. DS Advanced’s contention that the motion should be deemed waived 18 as untimely is rejected. 19 The briefing on this motion by both parties highlights that this has been an 20 acrimonious litigation with both sides hurling assertions of bad faith and misconduct. 21 Lowe’s HC accuses DS Advanced and its counsel of harassing litigation tactics and shifting 22 frivolous infringement contentions. DS Advanced accuses Lowe’s counsel of making false 23 statements to the Court and violations of Rule 11. 24 25 26 27 1 Counsel for DS Advanced erroneously argued that the standard to prove the exceptional nature of the case is clear and convincing evidence [Doc. No. 81, at 6], citing to case law that preceded the Supreme 28 1 The Court in assessing whether this case merits an exceptional case finding considers 2 only the matters before it. As evidence of plaintiff’s bad faith and harassment, Lowe’s HC 3 references other litigations in other districts filed by DS Advanced against other Lowe’s 4 entities or affiliates regarding the same patent at issue in this litigation. These matters are 5 not before this Court and will be left to those district judges to determine if they were 6 improvidently or maliciously filed. 7 Lowe’s HC also references a violation by counsel for DS Advanced of the Protective 8 Order entered in this case. That discovery matter was addressed by the magistrate judge 9 in a Report and Recommendation made to this Court. [Doc. No. 99.] Counsel’s violations 10 were found to be unjustified, careless failures to adhere to the terms of the Protective Order 11 but not bad faith, and counsel has already been sanctioned. 12 The Court focuses on the history of this case and the litigation position of DS 13 Advanced. The case was filed on July 21, 2023. [Doc. No. 1.] Lowe’s HC contends that 14 DS Advanced improperly named multiple defendants without justification, however DS 15 Advanced voluntarily dismissed those parties on August 21, 2023, before any substantial 16 expense or inconvenience was incurred. [Doc. No 5.] 17 DS Advanced filed an amended complaint on October 16, 2023. [Doc. No. 17.] 18 Lowe’s HC filed a motion to dismiss willfulness allegations which the Court denied finding 19 that, based only on the allegations of the complaint, DS Advanced plausibly stated a claim 20 for willful infringement. [Doc. No. 24.] Lowe’s HC then filed its answer on January 29, 21 2024. [Doc. No. 27.] In March 2024, the parties entered into a Scheduling Order [Doc. 22 No. 31] and a Protective Order [Doc. No. 33]. Nothing else appears on the docket until 23 Lowe’s HC filed its motion for summary judgment of non-infringement on June 10, 2024. 24 [Doc. No. 34.] 25 After receipt of DS Advanced’s infringement contentions, Lowe’s HC presented its 26 motion to the Court for summary judgment of non-infringement. Based on proposed 27 constructions of three limitations of the patent’s only independent claim, Lowe’s HC 28 argued for a finding of non-infringement asserting that the aspects of the accused devices 1 that DS Advanced contended satisfied those claim elements could not as a matter of law 2 infringe. [Id.] 3 Lowe’s HC briefed the three claim limitations. The Court after construing the “metal 4 housing” limitation found it unnecessary to reach the two other challenged limitations. DS 5 Advanced proposed a construction for “metal housing” that it contended encompassed the 6 accused devices. The Court rejected the proposed construction as contrary to the plain 7 meaning of the claim term and the specification. [Doc. No. 67.] Lowe’s HC correctly 8 states that the Court was highly skeptical of the construction being proffered by DS 9 Advanced and remarked that it was “almost frivolous.” 10 The question before the Court now is whether DS Advanced’s interpretation of the 11 claim limitation was so objectively unreasonable that the circumstances support an 12 exceptional case finding. The construction of “metal housing” was put before the Court 13 relatively early in the litigation, just three months after the entry of the Scheduling Order 14 and Protective Order. DS Advanced appears to have consistently identified in its 15 infringement contentions the aspects of the accused device it alleged met this claim 16 limitation based on its expansive interpretation of the claim. 17 The Court does not find that DS Advanced asserted its construction in bad faith or 18 for an improper purpose, such as to extract a settlement. See Extremity Medical, LLC v. 19 Nextremity Solutions, Inc. 2024 WL 4384202, *2 (Oct. 3, 2024, D.Del.) (pursing baseless 20 litigation for a quick pay day). DS Advanced failed to convince the Court of its 21 interpretation of the patent and the Court found the proposed construction strained the plain 22 reading of the claim. Under the totality of the circumstances however the Court is not 23 convinced that DS Advanced knowingly and intentionally asserted a meritless position for 24 improper purposes. It was just wrong. 25 Lowe’s HC’s motion to find the case exceptional and request for an award of 26 attorneys’ fees and expenses pursuant to 35 U.S.C. § 285 is DENIED. 27 The Court also does not find that DS Advanced’s counsel intentionally and in bad 28 faith unreasonably multiplied the proceedings justifying a fee award pursuant to 35 U.S.C. 1 1927. Counsel has a litigation style that is perhaps overly aggressive and at times 2 reflected a somewhat condescending attitude toward the Court, but the Court does not find 3 was intentionally harassing or advanced in bad faith. The request for a fee award against 4 || counsel is also DENIED.” 5 It is SO ORDERED. 6 Dated: February 24, 2025 € ZL 7 Hon. Cathy Ann Bencivengo 8 United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 > The sanction award against counsel for DS Advanced for his violations of the Protective Order however remains affirmed.