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Parallel Networks Licensing, LLC v. International Business Machines Corp.

United States District Court, D. Delaware

July 31, 2017

PARALLEL NETWORKS LICENSING, LLC, Plaintiff,
v.
INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendants.

          Adam W. Poff, Esq., Pilar G. Kraman, Esq., Young Conaway Stargatt & Taylor, Counsel for Plaintiffs

          Jack B. Blumenfeld, Esq., Rodger D. Smith, II, Esq., Jeremy A. Tigan, Esq., Morris, Nichols, Arsht & Tunnell, LLP, Counsel for Defendants

         Of Counsel:

          Douglas A. Cawley, Esq., Christopher T. Bovenkamp, Esq., Eric S. Hansen, Esq., Avery R. Williams, Esq., Justin W, Allen, Esq., McKool Smith, PC, Angela M. Vorpahl, Esq., McKool Smith, PC, 1 Bryant Park, John B. Campbell, Esq., Leah Bhimani Buratti, Esq., Kevin P. Hess, Esq., McKool Smith, PC, 300 W.

         John M. Desmarais, Esq., Jon T. Hohenthaner, Esq., Andrew G. Heinz, Esq., Jeffrey S. Seddon, II, Esq., William D, Findlay, Esq., Desmarais LLP

          MEMORANDUM OPINION

          JOKDAN, Circuit Judge.

         I. Introduction

         On April 27, 2017, 1 entered final judgment of non-infringement for IBM in this patent infringement case. (Docket Item ("D.I.") 413.) I had previously entered a partial summary judgment order, ruling that Parallel Networks could not prevail on its theory of indirect infringement. (D.I. 367.) I also granted a motion in limine excluding Parallel Networks' damages theory as it pertained to direct infringement. (D.I. 406.) In the face of those rulings, the parties filed a joint stipulation seeking entry of final judgment. (D.I. 411.)

         Currently before me is IBM's motion for attorneys' fees and costs under 35 U.S.C. § 285. (D.I. 415.) Having reviewed the briefing on this motion, and considering the parties' conduct during the course of litigation, [1] I conclude that this is not a case to be called "exceptional" and does not warrant the imposition of fees. I will therefore deny IBM's motion.

         II. Legal Standards

         Pursuant to 35 U.S.C. § 285, a court "may award reasonable attorney fees to the prevailing party" in "exceptional cases[.]" In Octane Fitness, LLC v. ICON Health & Fitness, Inc., the Supreme Court articulated the standards that courts should use to determine whether a case qualifies as "exceptional." 134 S.Ct. 1749, 1756 (2014). It held that "an 'exceptional' case is simply one that stands 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." Id. Whether a case qualifies as "exceptional" is a question of judicial discretion. Id. When deciding whether a case is "exceptional, " courts should consider the totality of the circumstances. Id. (recognizing that "there is no precise rule or formula for making these determinations" and that district courts should exercise "equitable discretion" (quotation marks and alteration omitted)).

         Following Octane Fitness, the Federal Circuit has instructed that "[t]he ... purpose behind § 285 is to prevent a party from suffering a 'gross injustice'" and that "[t]he exercise of discretion in favor of awarding attorney fees should be bottomed upon a finding of unfairness or bad faith in the conduct of the losing party, or some other equitable consideration ... which makes it grossly unjust that the winner ... be left to bear the burden of his own counsel fees." Checkpoint Sys., Inc. v. All-Tag Security S.A., 858 F.3d 1371, 1376 (Fed. Cir. 2017) (alterations and quotations omitted). In other words, "fee awards are not to be used 'as a penalty for failure to win a patent infringement suit.'" Id. (quoting Octane Fitness, 134 S.Ct. at 1753).

         III. Discussion

         Viewed in its totality, Parallel Networks' conduct over the course of this case does not qualify as exceptional. Based on the record, it appears that Parallel Networks succeeded in obtaining discovery that it demanded, worked to narrow the issues in the case, and presented at least one claim that withstood summary judgment. (D.I. 366.) Despite that, IBM presents four reasons why it believes this case is exceptional and Parallel Networks ...


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