UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF NORTH CAROLINA
`CHARLOTTE DIVISION
`3:17-cv-00072-FDW-DSC
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`vs.
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`COMPOSITE RESOURCES, INC., )
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`COMBAT MEDICAL SYSTEMS,
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` LLC and ALPHAPOINTE,
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`Defendants.
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`___________________________________ )
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`Plaintiff,
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`ORDER
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`THIS MATTER is before the Court on Defendants Combat Medical Systems, LLC and
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`Alphapointe’s (“Defendants”) Motion for Attorney’s Fees, based on fees incurred in defending
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`against Plaintiff’s patent infringement claim in this Court. (Doc. No. 235).
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`I.
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`BACKGROUND
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`Plaintiff Composite Resources, Inc. (“CRI”) initially filed this lawsuit on February 22,
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`2017, alleging that the Tactical Mechanical Tourniquet (“TMT”) manufactured by Defendant
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`Alphapointe and distributed by Defendant Combat Medical Systems, LLC infringed Claims 15
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`and 16 of CRI’s U.S. Patent No. 7,842,067 (the “‘067 Patent”) and Claim 9 of CRI’s U.S. Patent
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`No. 7,892,253 (the “‘253 Patent”). (Doc. No. 5). Defendants counterclaimed that the TMT did
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`not infringe CRI’s ‘067 or ‘253 Patents, and further claimed that the asserted patent claims were
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`invalid for indefiniteness. (Doc. Nos. 26–27). On December 15, 2020, the Court entered a
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`summary judgment order finding that the TMT did not infringe the ‘067 Patent. (Doc. No. 230).
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`This order also found that the ‘067 Patent was not invalid. See id.
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`Defendants’ instant motion seeks the recovery of attorneys’ fees, alleging that CRI filed
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`suit to prevent Defendants from competing; CRI had no clear infringement theory throughout the
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`Case 3:17-cv-00072-MOC-DSC Document 251 Filed 04/08/21 Page 1 of 5
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`litigation; Defendants exhibited to CRI that the TMT did not infringe; and CRI engaged in
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`improper litigation tactics.
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`II.
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`DISCUSSION
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`Since a discretionary fee-shifting provision was added to the Patent Act in 1946, courts
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`have “viewed the award of fees not ‘as a penalty for failure to win a patent infringement suit,’
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`but as appropriate ‘only in extraordinary circumstances.’” Octane Fitness, LLC v. ICON Health
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`& Fitness, Inc., 572 U.S. 545, 548–49 (2014) (quoting Park-In-Theaters, Inc. v. Perkins, 109
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`F.2d 137, 142 (9th Cir. 1951)). The Supreme Court has emphasized that fee recovery for a
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`“prevailing party” under § 285 of the Patent Act begins and ends with a single inquiry: is the
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`case “exceptional?” Id. at 549–51. Succinctly, “an ‘exceptional’ case is simply one that stands
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`out from others with respect to the substantial strength of a party’s litigating position
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`(considering both the governing law and the facts of the case) or the unreasonable manner in
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`which the case was litigated.” Id. at 554. While Defendants argue many issues in their motion,
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`none support an “exceptional case” fee award under § 285.
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`35 U.S.C. § 285 provides: “The court in exceptional cases may award reasonable attorney
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`fees to the prevailing party.” As a result, a party must also prove that the case is exceptional to
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`receive attorneys’ fees. LendingTree, LLC v. Zillow, Inc., 54 F. Supp. 3d 444, 455 (W.D.N.C.
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`2014) (“In other words, to receive attorneys’ fees under § 285, a party must demonstrate: (1) it is
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`the prevailing party; and (2) the case is ‘exceptional.’”). The Supreme Court has required parties
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`to prove entitlement to fees by a preponderance of the evidence. Octane Fitness, 572 U.S. at
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`557–58. As such, an entry of judgment against CRI cannot alone make Defendants’ case
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`“exceptional,” entitling Defendants to attorneys’ fees under § 285. See, e.g., Dunhall Pharm.,
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`Inc. v. Discus Dental, Inc., 243 F.3d 564 (Fed. Cir. 2000) (affirming “district court’s grant of
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`Case 3:17-cv-00072-MOC-DSC Document 251 Filed 04/08/21 Page 2 of 5
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`summary judgment of no infringement and its denial of attorney’s fees”); see also Stone Basket
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`Innovations, LLC v. Cook Med. LLC, 892 F.3d 1175, 1178 (Fed. Cir. 2018) (denying attorneys’
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`fees to defendants pursuant to Section 285 because the case was not exceptional, although the
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`court granted plaintiff’s motion to dismiss with prejudice).
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`The United States Supreme Court has identified that the Patent Act fails to define
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`“exceptional,” and therefore the term must be construed in accordance with its ordinary meaning.
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`Octane Fitness, 572 U.S. at 553 (citations omitted). “In 1952, when Congress used the word in §
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`285 (and today, for that matter), ‘[e]xceptional’ meant ‘uncommon,’ ‘rare,’ or ‘not ordinary.’”
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`Id. (citations omitted). As such, the Supreme Court has held
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`that 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. District courts may determine whether a case is “exceptional”
`in the case-by-case exercise of their discretion, considering the totality of the
`circumstances.
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`Id. at 554; see also Sociedad Espanola de Electromedicina y Calidad, S.A. v. Blue Ridge X-Ray
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`Co, Inc., 226 F. Supp. 3d 520, 533 (W.D.N.C. 2016), aff’d sub nom. Sociedad Espanola De
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`Electromedicina Y Calidad, S.A. v. Blue Ridge X-ray Co., Inc., 721 F. App’x 989 (Fed. Cir.
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`2018).
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`This Court, looking to the United States Supreme Court, has identified examples of
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`exceptional cases:
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`A “district court may award fees in the rare case in which a party’s unreasonable
`conduct—while not necessarily independently sanctionable—is nonetheless so
`‘exceptional’ as to justify an award of fees.” Additionally, “a case presenting
`either subjective bad faith or exceptionally meritless claims may sufficiently set
`itself apart from mine-run cases to warrant a fee award.” The Octane Fitness
`Court suggested district courts consider several “nonexclusive” factors, including
`“frivolousness, motivation, objective unreasonableness (both in the factual and
`legal components of the case) and the need in particular circumstances to advance
`considerations of compensation and deterrence.”
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`LendingTree, 54 F. Supp. 3d at 456 (emphasis added) (quoting Octane Fitness, 572 U.S. at 555;
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`then quoting id.; and then quoting id. at 554 n.6 (citation omitted)).
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`A district court may decline to award attorneys’ fees, as finding a case to be exceptional
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`is in the Court’s discretion. Gardco Mfg., Inc. v. Herst Lighting Co., 820 F.2d 1209, 1215 (Fed.
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`Cir. 1987) (noting that “[a]fter the district court determines that a case is exceptional, there
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`remains in every case its freedom to exercise its discretion ‘informed by the court’s familiarity
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`with the matter in litigation and the interest of justice” (alteration in original) (citation omitted)).
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`Keeping with the Court’s ability to exercise its discretion in awarding attorneys’ fees pursuant to
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`35 U.S.C. § 285, this Court’s sister court in the Eastern District of North Carolina has stated, “It
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`is the exception and not the rule to award counsel fees in cases of this nature.” Davis Harvester
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`Co. v. Long Mfg. Co., 283 F. Supp. 536, 538 (E.D.N.C. 1967) (citations omitted); see also
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`Checkpoint Sys., Inc. v. Knogo Corp., 490 F. Supp. 116, 123 (E.D.N.Y. 1980) (citing Larchmont
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`Eng’g, Inc. v. Toggenburg Ski Ctr., Inc., 444 F.2d 490 (2d Cir. 1971), to note that attorneys’ fees
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`awards are “discretionary” and should be used “sparingly”).
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`Here, Defendants contend that CRI engaged in frivolous, unreasonable behavior
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`throughout the course of this lawsuit. (See Doc. No. 237 at 20 (“Plaintiff’s conduct demonstrates
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`the zenith of frivolousness, and objective unreasonableness . . . .”)). Defendants further assert
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`that CRI’s alleged claims in “bad faith” that were “meritless.” (See id. at 1, 21). Yet, Defendants’
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`notion of exceptionality hinges on Defendants’ theories that CRI filed this lawsuit for an
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`“anticompetitive purpose” rather than to protect its intellectual property, that Defendants had no
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`clear patent infringement theory, that Defendants allegedly offered convincing arguments that
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`the TMT did not infringe the ‘067 Patent, and that CRI allegedly engaged in improper litigation
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`tactics.
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`The Court acknowledges that there remains a great deal of disagreement between the
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`parties about how each party conducted themselves throughout this litigation. But the Court also
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`does not find that Defendants have offered sufficient evidence to prove by a preponderance of
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`the evidence that this case is exceptional. First, CRI may have been partially motivated to file
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`this suit in order to protect its market share, but CRI also clearly appears motivated by a desire to
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`protect its intellectual property. Second, CRI’s infringement arguments throughout this lawsuit
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`have not been “nonsensical” as Defendants allege. On the contrary, CRI’s claims required
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`rigorous analysis from this Court as evidenced by the Court’s decisions not to resolve the case on
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`earlier Motions for Summary Judgment. (See Doc. Nos. 57 and 99). Third, Defendants have not
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`demonstrated that CRI’s patent infringement claims were entirely baseless.
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`Therefore, this Court, exercising its discretion, finds that this is not a rare case where
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`attorneys’ fees and sanctions are merited.
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`III. CONCLUSION
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`After a careful review of the evidence put forward by Defendants to show that this is an
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`exceptional case, the Court finds that it is not so exceptional in patent law as to merit the rare
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`remedy of awarding attorneys’ fees and sanctions. The Court therefore DENIES Defendants’
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`Motion for Attorney’s Fees. (Doc. No. 235).
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`IT IS SO ORDERED.
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`Signed: April 7, 2021
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`Case 3:17-cv-00072-MOC-DSC Document 251 Filed 04/08/21 Page 5 of 5
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