United States District Court, D. Maryland
Decided April 19, 2013
For IA Labs CA, LLC, Plaintiff, Counter Defendant: Robert Scott Brennen, LEAD ATTORNEY, Miles and Stockbridge PC, Baltimore, MD; Adam G Price, PRO HAC VICE, Andrew G DiNovo, PRO HAC VICE, Jay David Ellwanger, PRO HAC VICE, Raymond W Mort, III, PRO HAC VICE, Stefanie T Scott, PRO HAC VICE, William M Parrish, PRO HAC VICE, DiNovo Price Ellwanger and Hardy LLP, Austin, TX; Katherine B Hill, Miles and Stockbridge PC, Baltimore, MD.
For Nintendo Co., Ltd., Nintendo of America, Inc., Defendants: Marie Celeste Bruce, LEAD ATTORNEY, Rifkin Livingston Levitan and Silver LLC, Bethesda, MD; Terrance Jay Wikberg, LEAD ATTORNEY, Perkins Coie LLP, Washington, DC; C Mark Kittredge, PRO HAC VICE, Perkins Coie LLP, Phoenix, AZ; Jerry A Riedinger, PRO HAC VICE, Jessica Lynn Rossman, PRO HAC VICE, Stevan R Stark, PRO HAC VICE, Tyler C Peterson, PRO HAC VICE, Perkins Coie LLP, Seattle, WA; Joseph A Rhoa, Nixon and Vanderhye PC, Arlington, VA.
For Edell Shapiro and Finnan, LLC, Movant: Robert N Levin, Law Offices of Robert N Levin PC, Gaithersburg, MD.
For Nintendo of America, Inc., Nintendo Co., Ltd., Counter Claimants: Terrance Jay Wikberg, LEAD ATTORNEY, Perkins Coie LLP, Washington, DC; C Mark Kittredge, PRO HAC VICE, Perkins Coie LLP, Phoenix, AZ; Jerry A Riedinger, PRO HAC VICE, Jessica Lynn Rossman, PRO HAC VICE, Stevan R Stark, PRO HAC VICE, Perkins Coie LLP, Seattle, WA; Joseph A Rhoa, Nixon and Vanderhye PC, Arlington, VA; Marie Celeste Bruce, Rifkin Livingston Levitan and Silver LLC, Bethesda, MD.
PETER J. MESSITTE, UNITED STATES DISTRICT JUDGE.
The background of this patent infringement case has been laid out in two prior opinions. See IA Labs CA, LLC v. Nintendo Co., Ltd., 863 F.Supp.2d 430 (D. Md. 2012); IA Labs CA, LLC v. Nintendo Co., Ltd., 2012 WL 1565296 (D. Md. May 1, 2012). IA Labs CA, LLC (" IA Labs" ) sued Nintendo Co., Ltd. and Nintendo of America, Inc. (collectively, " Nintendo" ) for infringement of two patents. The Court granted Nintendo's motion for summary judgment, finding that there was no infringement as a matter of law. IA Labs, 863 F.Supp.2d at 433. Nintendo then moved for attorneys' fees on the ground that IA Labs had brought one of its two infringement claims in bad faith and without a reasonable basis. IA Labs, 2012 WL 1565296, at *2. The Court agreed and entered judgment against IA Labs in the amount of $218,159.25 in attorneys' fees and $17,924.82 in litigation expenses, for a total award of $236,084.07. [WL] at *4. IA Labs noted an appeal to the United States Court of Appeals for the Federal Circuit, and filed a Motion for Stay of Execution of Judgment Pending Appeal and to Post Alternate Security (Paper No. 396). Nintendo opposed the Motion and, at a minimum, sought limited discovery to determine whether IA Labs in fact had the wherewithal to post bond. The Court permitted Nintendo to take discovery, following which the parties filed supplemental briefs. The Court orally advised the parties that it had DENIED IA Labs' Motion, indicating that a written opinion would follow. Here, then, is that Opinion.
The specific issue currently before the Court is whether IA Labs may be excused from posting a supersedeas bond or be permitted to post some alternative bond. It may avail itself of neither.
As a rule, an appeal does not automatically stay a judgment, but an appellant may obtain a stay of the judgment by posting supersedeas bond. Fed.R.Civ.P. 62(d). The requirement of posting bond performs two functions: first, it protects the prevailing party " against any loss sustained as a result of being forced to forgo execution on a judgment during the course of an ineffectual appeal" ; and second, it gives the losing party the option of avoiding " the risk of satisfying the judgment only to find that restitution is impossible after reversal on appeal." Poplar Grove Planting and Refining Co., Inc. v. Bache Halsey Stuart, Inc., 600 F.2d 1189 (5th Cir. 1979). " Unless otherwise ordered by the Court, the amount of any supersedeas bond filed to stay execution of a money judgment pending appeal shall be 120% of the amount of the judgment plus an additional $500 to cover costs on appeal." Local Rule 110(1)(a). In some
cases, courts may excuse the requirement of posting bond and stay execution of a judgment. The Federal Rules of Appellate Procedure specifically authorize parties to move for " a stay of the judgment or order of a district court pending appeal." Fed. R. App. P. 8(a)(1)(A). A party may make that request in the district court, and may only request a stay from the circuit court once the request was made in the district court, unless the movant can make a showing " that moving first in the district court would be impracticable." Id.; S.E.C. v. Dunlap, 253 F.3d 768, 774 (4th Cir. 2001).
Rather than post bond consistent with the requirements of Rule 62 and Local Rule 110, IA Labs has requested the Court stay the judgment pending appeal without bond or permit it to post its patents as alternative security. It argues that posting a full bond would render it insolvent, relying on Poplar Grove for the proposition that a court may excuse the requirement to post bond or permit ...