IN THE UNITED STATES DISTRICT COURT
`FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
`GREENSBORO DIVISION
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`Civil Action No.
`17-cv-00687-WO-JLW
`
`OPTOLUM, INC.,
`Plaintiff,
`
`v.
`CREE, INC.,
`Defendant.
`
`
`
`DEFENDANT CREE, INC.’S REPLY BRIEF IN SUPPORT OF
`MOTION FOR ATTORNEYS’ FEES
`Defendant, Cree, Inc. (“Cree”) submits this reply brief
`in support of its Motion for Attorneys’ Fees against
`Plaintiff OptoLum, Inc.’s (“OptoLum”).
`The record in this case shows that OptoLum pursued
`legal theories regarding brand value and willful
`infringement that had no basis in law or fact. OptoLum
`attempts to defend its litigation tactics by isolating
`specific instances and then arguing that, alone, those
`instances do not support a fees award. However, OptoLum’s
`argument ignores the fundamental premise that whether to
`award fees focuses on the “totality of the circumstances.”
`Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572
`U.S. 545, 554 (2014).
`
`
`
`- 1 -
`
`
`
`Case 1:17-cv-00687-WO-JLW Document 374 Filed 03/21/22 Page 1 of 14
`
`
`FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
`GREENSBORO DIVISION
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`Civil Action No.
`17-cv-00687-WO-JLW
`
`OPTOLUM, INC.,
`Plaintiff,
`
`v.
`CREE, INC.,
`Defendant.
`
`
`
`DEFENDANT CREE, INC.’S REPLY BRIEF IN SUPPORT OF
`MOTION FOR ATTORNEYS’ FEES
`Defendant, Cree, Inc. (“Cree”) submits this reply brief
`in support of its Motion for Attorneys’ Fees against
`Plaintiff OptoLum, Inc.’s (“OptoLum”).
`The record in this case shows that OptoLum pursued
`legal theories regarding brand value and willful
`infringement that had no basis in law or fact. OptoLum
`attempts to defend its litigation tactics by isolating
`specific instances and then arguing that, alone, those
`instances do not support a fees award. However, OptoLum’s
`argument ignores the fundamental premise that whether to
`award fees focuses on the “totality of the circumstances.”
`Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572
`U.S. 545, 554 (2014).
`
`
`
`- 1 -
`
`
`
`Case 1:17-cv-00687-WO-JLW Document 374 Filed 03/21/22 Page 1 of 14
`
`
`
`Here, consideration of all of the relevant facts and
`circumstances within the context of the entire litigation
`establishes that this case is exceptional because the
`pursuit of brand value and willful-infringement theories,
`as executed by OptoLum, was unreasonable and makes this
`case stand out from others. Accordingly, for the reasons
`explained in Cree’s motion and further below, this Court
`should grant Cree’s motion and award its reasonable
`attorneys’ fees.
`I.
`Argument
`A.
`OptoLum’s Brand-Value Theory Was Unreasonable
`Cree’s motion explains how OptoLum’s brand-value
`contention pursued damages beyond the reasonable royalty
`permitted by 35 U.S.C. § 284. D.I. 369 at 3-11. OptoLum
`sought to influence the jury’s consideration of damages
`through improper allegations of misappropriation of
`OptoLum’s technology which allegedly increased the brand
`value of Cree’s company. See 11/9/21 Tr. at 37-40
`(OptoLum’s counsel, in closing argument, contending that
`Cree’s “success” was driven by “brand awareness” and
`arguing that Cree’s damages expert testimony did not “mean
`that [Cree] didn’t gain brand recognition by selling
`
`
`
`- 2 -
`
`
`
`Case 1:17-cv-00687-WO-JLW Document 374 Filed 03/21/22 Page 2 of 14
`
`
`
`[bulbs] at a loss”). This brand-value theory of damages
`was the same theory underlying OptoLum’s claims for Lanham
`Act false advertising and unjust enrichment, which had been
`dismissed from the case. OptoLum now contends there is no
`relationship between the dismissed claims and the brand-
`value damages theory. D.I. 373 at 10. The record shows
`otherwise.
`The Lanham Act and unjust-enrichment claims were
`specifically based on the theory that Cree’s brand value
`increased due to the misappropriation and use of OptoLum’s
`technology.1 Despite the dismissal of those claims, OptoLum
`heedlessly continued its attempt to recover brand-value
`damages by improperly inflating its requested reasonable
`royalty with a brand-value component not tied to any
`applicable reasonable royalty for patent infringement. As
`OptoLum’s own expert testified, the 5% increase in asserted
`royalty damages associated with “the value of the brand”
`was completely irrelevant to making, using, or selling the
`
`
`1 As explained in Cree’s motion, the alleged bases for
`the brand-value damages theory was substantially similar to
`the allegations for the dismissed false-advertising and
`unjust-enrichment claims. D.I. 369 at 5-6.
`
`
`
`- 3 -
`
`
`
`Case 1:17-cv-00687-WO-JLW Document 374 Filed 03/21/22 Page 3 of 14
`
`
`
`accused light bulbs. D.I. 369 at 6-7. Instead, it was for
`“something else.” Id.
`In view of that admission of what the brand-value
`damages component was, and since the alleged bases for the
`5% increase were substantially similar to those with
`respect to the dismissed claims (D.I. 369 at 6 n.1),
`OptoLum’s objective was transparent: To seek brand-value
`damages - based on alleged conduct associated with
`dismissed claims - which had no applicable evidentiary
`record support. OptoLum’s conduct in pursuit of brand-
`value damages makes this case stand out from the rest and
`thus exceptional.
`OptoLum also argues that Cree’s contention about the
`unreasonableness of their brand-value theory is based on a
`single stricken answer at trial and the exclusion of a
`portion of Mr. Scally’s report. OptoLum’s attempt to
`minimize the steady drum beat of their brand-value
`assertions ignores the realities of what actually happened
`at trial.
`While exclusion of portions of Mr. Scally’s expert
`report and testimony indeed support Cree’s motion for fees,
`see Magnetar Technologies Corp, et. al. v. Six Flags Theme
`
`
`
`- 4 -
`
`
`
`Case 1:17-cv-00687-WO-JLW Document 374 Filed 03/21/22 Page 4 of 14
`
`
`
`Park Inc., et. al. 2015 WL 4455606 at *11 (DDE Jul. 21,
`2015) (holding expert report so lacked any reliable
`methodology under Daubert that it should have been apparent
`to plaintiffs and so their reliance on the report was
`objectively unreasonable), OptoLum did not stop there.
`Throughout the trial OptoLum took numerous opportunities
`to, again and again, emphasize “brand” to the jury. See
`11/9/21 Tr. at 37-40 (OptoLum’s counsel raising “brand”
`arguments to the jury during closing arguments, as noted
`above). This ongoing effort even prompted this Court to
`admonish counsel for OptoLum that it “could draw some
`adverse inferences from what [was] going on” and that
`branding had been “beat to death in this trial.” 11/2/21
`Tr. at 114:18-22. Despite that, OptoLum continued to seek
`testimony based on branding. D.I. 369 at 9-10.
`Lastly, OptoLum asserts that this Court rejected Cree’s
`argument that OptoLum’s brand-value strategy was not
`relevant. D.I. 373 at 11-12. That argument is clearly
`wrong. Cree filed a motion seeking exclusion of Mr.
`Scally’s brand value testimony, and this Court granted that
`motion in part because the brand-value opinions – seeking
`damages above and beyond a royalty for allegedly infringing
`
`
`
`- 5 -
`
`
`
`Case 1:17-cv-00687-WO-JLW Document 374 Filed 03/21/22 Page 5 of 14
`
`
`
`products – lacked any methodology tied to the reasonable
`royalty determination. D.I. 315 at 14. That ruling
`further shows that OptoLum’s brand-value theory for damages
`never had any basis in law or fact.
`B.
`OptoLum’ Willful-infringement Claim Was
`Unreasonable
`OptoLum contends that its “willfulness contentions were
`brought in good faith based on the first-hand knowledge and
`experiences of OptoLum’s founder and the inventor of the
`asserted patents, in combination with the opinions of two
`of its experts.” D.I. 373 at 12. Again, the record shows
`otherwise.
`OptoLum wielded its willful-infringement assertions as
`a basis for extensive discovery and trial testimony. Yet,
`OptoLum never presented any evidence that would even
`remotely give rise to willful infringement under the law.
`At trial OptoLum completely failed to carry its burden of
`proof on willfulness. Cree filed a motion for judgment as
`a matter of law (“JMOL”). D.I. 323. The Court granted
`that motion and dismissed OptoLum’s willful-infringement
`claims. D.I. 345.
`In granting Cree’s motion the Court found that OptoLum
`“offered no evidence that anyone at Cree was aware of the
`
`
`
`- 6 -
`
`
`
`Case 1:17-cv-00687-WO-JLW Document 374 Filed 03/21/22 Page 6 of 14
`
`
`
`Asserted Patents at the time of the creation of the accused
`products” and also “presented no evidence that Cree’s
`accused products were created by deliberate or reckless
`infringement as opposed to innocent independent
`development.” D.I. 345 at 7. The fact that OptoLum could
`not present any competent evidence of willfulness at trial
`demonstrates that OptoLum never had any such evidence. The
`fact that OptoLum continued to press its willfulness claims
`throughout the litigation, without ever having competent
`evidence, makes this case stand out as exceptional.
`OptoLum also attempts to distinguish the facts and
`circumstances of the present case from the cases Cree cited
`showing that OptoLum had an ongoing obligation to
`reevaluate the viability of its claims. D.I. 373 at 13-14.
`OptoLum’s distinction is the asserted presence of an
`unfavorable opinion. Id. However, whether or not OptoLum
`had an opinion (unfavorable or not) of infringement is
`irrelevant. What is relevant is that OptoLum did not have
`any evidence on which to sustain a claim of willfulness.
`Any competent lawyer objectively analyzing the basis for a
`willfulness claim would (and should) have recognized this
`
`
`
`- 7 -
`
`
`
`Case 1:17-cv-00687-WO-JLW Document 374 Filed 03/21/22 Page 7 of 14
`
`
`
`fact.2
`OptoLum had an ongoing duty to examine the
`unreasonableness of its positions, including its willful-
`infringement claims. Yet, despite having no evidence in
`support of those claims, OptoLum kept pushing those claims
`throughout discovery and through trial. Doing so was
`objectively unreasonable. See Finjan, Inc. v. Juniper
`Network, Inc., No. C 17-05659 WHA, 2021 WL 75735, at *2
`(N.D. Cal. Jan. 9, 2021) (“Finjan should have dropped the
`‘780 patent after that first round patent showdown, which
`granted Juniper summary judgment of noninfringement on
`claim 1”); Medtronic Navigation, Inc. v. BrainLAB
`Medizinische Computersystems Gmbh, No. CIV 98CV-01072-RPM,
`2008 WL 410413, at *5 (D. Colo. Feb. 12, 2008) (“After
`receiving the Court’s claims construction ruling, however,
`Medtronic and the MWE lawyers had a duty to reexamine this
`
`
`2 As this Court noted, OptoLum “offered no evidence that
`anyone at Cree was aware of the Asserted Patents.” D.I. 345
`at 7. This is not a case, as OptoLum contends, where the
`Court simply did not find the circumstantial evidence
`sufficient to carry the burden. Instead, even in the best
`plausible light, OptoLum’s case was unsupported. Indeed, the
`record was wholly devoid of any “circumstantial evidence of
`Cree copying the technology in the Asserted Patents.” Id. at
`9.
`
`
`
`- 8 -
`
`
`
`Case 1:17-cv-00687-WO-JLW Document 374 Filed 03/21/22 Page 8 of 14
`
`
`
`litigation and make an objective assessment of the validity
`of Medtronic’s claims that BrainLAB's products infringed
`the patent claims as construed.”). Pursuing willfulness
`claims in these circumstances is conduct showing that the
`case stands out and is exceptional.
`C.
`Cree’s Request for Fees is Supported
`OptoLum contends that Cree’s requested fee award is
`overly broad because document productions, depositions, and
`motion practice were independently relevant to issues
`beyond the baseless claims. D.I. 373 at 15. However,
`OptoLum does not (because it cannot) dispute that fee
`awards for the entire litigation may be proper where the
`unfounded assertions permeated throughout the entire case.
`Nor do they dispute that they used the willful-infringement
`allegations to support broad discovery requests, as Cree’s
`motion shows. D.I. 369 at 11.
`Despite OptoLum’s arguments to the contrary, Cree’s
`motion shows Cree had to spend considerable effort
`specifically defending the brand-value damages theory and
`the willful-infringement claim throughout the litigation.
`Moreover, the efforts were not, as OptoLum argues,
`independently relevant. For instance, Cree’s damages
`
`
`
`- 9 -
`
`
`
`Case 1:17-cv-00687-WO-JLW Document 374 Filed 03/21/22 Page 9 of 14
`
`
`
`expert had to rebut OptoLum’s brand-value damages theory in
`his expert reports. D.I. 369-3 (Yerman Dep. Tr.) at 139:4-
`140:18. Cree also had to address excluding OptoLum’s
`brand-value theory at the October 8th hearing before this
`Court, see, e.g., 10/8/21 Tr. at 38:9-24, and at the pre-
`trial conference, see, e.g., Pre-Trial Conference Tr.
`29:10-30:15. Similarly, Cree was obligated to produce
`substantial materials allegedly related to the broad-
`encompassing scope of OptoLum’s brand-value theory and
`their related discovery requests. See, e.g., D.I. 236,
`Motion Exh. A, PX17, 311, 312, 315, 452, 705-728. Those
`efforts were specific to OptoLum’s baseless claims.
`Lastly, OptoLum contends that the documentation
`provided by Cree is not sufficiently detailed to attribute
`fees incurred with respect to specific claims. As
`explained in Cree’s motion, however, attorney-fee awards do
`not require the granularity OptoLum asserts. See Homeland
`Housewares, LLC v. Sorensen Rsch., 581 F. App’x 877, 881
`(Fed. Cir. 2014) (holding attorney fee awards do not
`require granularity limited to costs incurred in responding
`to specific acts of litigation misconduct); Large Audience
`Display Sys., LLC v. Tennman Prods., LLC, 745 F. App’x 153,
`
`
`
`- 10 -
`
`
`
`Case 1:17-cv-00687-WO-JLW Document 374 Filed 03/21/22 Page 10 of 14
`
`
`
`157-58 (Fed. Cir. 2018) (holding awarding fees for entire
`litigation was proper particularly where “factual bases for
`exceptionality finding . . . ‘permeated’ the entire
`litigation.”).3
`II. CONCLUSION
`For the foregoing reasons, Cree respectfully requests
`that this Court find, for the purposes of 35 U.S.C. § 285,
`that Cree is the prevailing party, that this is an
`exceptional case, and that OptoLum is liable for the
`attorneys’ fees that Cree was forced to incur in this
`action. Accordingly, this Court should grant Cree’s motion
`and award its attorneys’ fees.
`
`Respectfully submitted, March 21, 2022.
`By: /s/ Blaney Harper
`Blaney Harper
`JONES DAY
`51 Louisiana Avenue, N.W.
`Washington, D.C. 20001-2113
`Telephone: (202) 879-3939
`Facsimile: (202) 626-1700
`Email: bharper@jonesday.com
`
`
`
`
`
`3 To the extent this Court determines, upon a finding of
`liability for fees, that further granularity and
`documentation is necessary, Cree is prepared to submit
`additional supporting non-privileged materials.
`
`
`
`- 11 -
`
`
`
`Case 1:17-cv-00687-WO-JLW Document 374 Filed 03/21/22 Page 11 of 14
`
`
`
`/s/ Peter D. Siddoway
`Peter D. Siddoway
`NC State Bar No. 45647
`SAGE PATENT GROUP
`4120 Main at North Hills St.
`Suite 230
`Raleigh, NC, 27609
`Telephone: 984-219-3358
`Facsimile: (984) 538-0416
`Email: psiddoway@sagepat.com
`
`
`Attorneys for Defendant Cree, Inc.
`
`- 12 -
`
`
`
`Case 1:17-cv-00687-WO-JLW Document 374 Filed 03/21/22 Page 12 of 14
`
`
`
`
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
`GREENSBORO DIVISION
`
`OPTOLUM, INC.,
`Plaintiff,
`
`Civ. Action No. 1:17-cv-
`00687
`
`
`
`v.
`CREE, INC.,
`Defendant.
`CERTIFICATE OF WORD COUNT
`I hereby certify that the foregoing complies with the
`limitations set forth in Local Rule 7.3(d) by not exceeding
`3,125 words, including the body of the memorandum, headings
`and footnotes, but excluding the caption, signature lines,
`certificate of service, cover page, and index.
`/s/ Peter D. Siddoway
`Peter D. Siddoway
`
`
`
`- 1 -
`Case 1:17-cv-00687-WO-JLW Document 374 Filed 03/21/22 Page 13 of 14
`
`
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
`
`OPTOLUM, INC.,
`Plaintiff,
`
`Civ. Action No. 1:17-cv-
`00687
`
`
`
`v.
`CREE, INC.,
`Defendant.
`CERTIFICATE OF SERVICE
`I hereby certify that on March 21, 2022, I
`electronically filed the foregoing with the Clerk of the
`Court using the CM/ECF system, which will send notification
`to counsel of record.
`
`/s/ Peter D. Siddoway
`Peter D. Siddoway
`
`
`
`
`
`- 1 -
`Case 1:17-cv-00687-WO-JLW Document 374 Filed 03/21/22 Page 14 of 14
`
`
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
