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In re CTP Innovations, LLC Patent Litigation

United States District Court, D. Maryland

September 12, 2017

IN RE CTP INNOVATIONS, LLC, PATENT LITIGATION CTP INNOVATIONS, LLC
v.
GEO GRAPHICS INC. CTP INNOVATIONS, LLC
v.
COMMAND WEB OFFSET COMPANY, INC. CTP INNOVATIONS, LLC
v.
SANDY ALEXANDER, INC. CTP INNOVATIONS, LLC
v.
WORZALLA PUBLISHING COMPANY CTP INNOVATIONS, LLC
v.
SPECIALTY PROMOTIONS, INC.

          MEMORANDUM & ORDER RE: FEE MOTION

          Marvin J. Garbis United States District Judge

         The Court has before it Defendants' Motion for Attorney Fees [ECF No. 385 in 14-md-2581[1] and the materials submitted relating thereto. The Court finds a hearing unnecessary.

         I. BACKGROUND[2]

         Plaintiff, CTP Innovations, LLC (“CTP”) is a non-practicing patent assertion entity that alleged ownership by assignment of United States Patent Nos. 6, 611, 349 (“the ‘349 Patent”) and 6, 738, 155 (“the ‘155 Patent”) (collectively, “the Patents in Suit”).[3] Beginning in 2013, CTP sued more than 75 printing companies for infringement of the Patents in Suit and contacted many more companies and offered licenses to avoid being sued.

         While many of these cases settled, on December 12, 2014, the United States Judicial Panel on Multidistrict Litigation (“MDL”) issued its Transfer Order [ECF No. 1] consolidating the then-pending actions and transferring them for pretrial purposes to this Court. In 2015, more than 20 additional tag-a-long cases were filed and subsequently transferred to this Court under the MDL. In addition, CTP stated an intention to file as many as 200 additional tag-a-long cases.[4]

         On November 29, 2016, this Court issued its Memorandum & Order Resolving Motions [ECF No. 381], holding that CTP did not own the rights to sue for infringement of the Patents in Suit at the time it commenced filing the lawsuits. As a result, the Court granted Defendants' Joint Rule 12(b)(1) Motion to Dismiss for Lack of Subject Matter Jurisdiction Due to Plaintiff's Lack of Standing [ECF No. 354].[5] In its decision, the Court noted: “If the matter were not moot, the Court would have held the Patents in Suit invalid as not claiming patentable subject matter.” Mem. [ECF No 381] at 5, n.4.

         On December 13, 2016, Defendants filed the instant joint Motion for Attorneys' Fees [ECF No. 385] seeking an award of attorney fees and/or sanctions pursuant to one or all of 35 U.S.C. § 285, 28 U.S.C. § 1927, and the court's inherent power to sanction.[6]

         Since the filing of the instant motion, CTP has settled with all but the five remaining defendants.[7] Notice, ECF No. 537; Stipulation of Dismissal, ECF No. 540. The Court herein resolves the pending motion for attorney fees.

         II. LEGAL STANDARD

         A. Patent Act Fee-shifting Provision

         The Patent Act's fee-shifting provision provides that “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U.S.C. § 285.

         To determine whether a party is a prevailing party in patent litigation, courts apply the general principle that “to be a prevailing party, one must ‘receive at least some relief on the merits, ' which ‘alters ... the legal relationship of the parties.'” Inland Steel Co. v. LTV Steel Co., 364 F.3d 1318, 1320 (Fed. Cir. 2004)(quoting Former Employees of Motorola Ceramic Prods. v. United States, 336 F.3d 1360, 1364 (Fed. Cir. 2003)).

         The Patent Act does not define “exceptional, ” but the United States Supreme Court has provided guidance in Octane Fitness, LLC v. ICON Health & Fitness, Inc., __ U.S. __, 134 S.Ct. 1749, 1751 (2014). An exceptional case “is simply one that stands out from others with respect to the 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. at 1756. “District courts may determine whether a case is ‘exceptional' in the case-by-case exercise of their discretion, considering the totality of the circumstances.” Id. at 1756; see also Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., __ U.S. __, 134 S.Ct. 1744, 1748 (2014) (“[T]he determination whether a case is ‘exceptional' under § 285 is a matter of discretion.”).

         The standard of proof for establishing entitlement to fees is by a preponderance of the evidence. Id. at 1758. If the district court finds the case exceptional by a preponderance of the evidence, it must then determine whether it should exercise its discretion to award attorneys' fees. See Icon Health & Fitness, Inc. v. Octane Fitness, LLC, 576 F. App'x 1002, 1005 (Fed. Cir. 2014); Inland Steel, 364 F.3d at 1321; Digeo, Inc. v. Audible, Inc., 505 F.3d 1362, 1366-67 (Fed. Cir. 2007); see also Graco, Inc. v. Binks Mfg. Co., 60 F.3d 785, 794-95 (Fed. Cir. 1995)(“A finding by a court that a case is exceptional is a factual determination, whereas the decision to award fees is discretionary.”).

         The amount to be awarded also lies within the sound discretion of this Court. See Lumen View Tech. LLC v. Findthebest.com, Inc., 811 F.3d 479, 483 (Fed. Cir. 2016); Monolithic Power Sys., Inc. v. O2 ...


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