`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`
`
`
`Case No. 2:15-CV-01047-RSP
`
`
`
`
`
`
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`
`
`
`MEMORANDUM OPINION AND ORDER
`
`ARTHREX, INC.,
`
`
`
`
`
`
`
`
`
`
`
`
`v.
`
`SMITH & NEPHEW, INC.,
`ARTHROCARE, CORP.,
`
`Plaintiff,
`
`Defendants.
`
`
`This patent infringement action proceeded to jury trial on December 2, 2016. At the
`
`conclusion of the five-day trial, the jury rendered a verdict finding that Defendants Smith &
`
`Nephew, Inc. and ArthoCare Corp. willfully infringed claims 10 and 11 of United States Patent
`
`No. 8,821,541, and claims 4, 8, 16, and 27 of United States Patent No. 9,179,907, and that the
`
`asserted claims are not invalid. See Dkt. No. 299. The jury awarded Arthrex, Inc. $17,400,000.00
`
`as a reasonable royalty. Id. Arthrex now moves for attorney fees under 35 U.S.C. § 285. Dkt. No.
`
`317. For the reasons explained below, Arthrex’s motion is DENIED.
`
`DISCUSSION
`
`Section 285 provides that a “court in exceptional cases may award reasonable attorney
`
`fees to the prevailing party.” An exceptional case is one that “stands out from other with respect
`
`to the substantive strength of the 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.” Octane
`
`Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 (2014). Assessing whether a
`
`case is exceptional is left to the Court’s discretion, considering the “totality of the
`
`
`
`1
`
`
`
`Case 2:15-cv-01047-RSP Document 354 Filed 01/25/17 Page 2 of 3 PageID #: 29153
`
`circumstances.” Id. Factors that the Court may consider include “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.” Id. at 1756
`
`n.6. To be considered exceptional, conduct need not be “independently sanctionable” or bad faith
`
`behavior. Id. “[A] case presenting either subjective bad faith or exceptionally meritless claims”
`
`may justify an award of fees. Id. at 1757.
`
`Arthrex does not suggest that Defendants engaged in bad faith litigation behavior. Rather,
`
`Arthrex first argues that the fact that the jury found willful infringement is by itself sufficient for
`
`a fees award. Dkt. No. 317 at 2-4. The Court disagrees.
`
`The Federal Circuit cases supporting Arthrex’s argument, such Modine Mfg. Co. v. Allen
`
`Grp., Inc., 917 F.2d 538 (Fed. Cir. 1990), significantly predate the Supreme Court’s decision in
`
`Octane Fitness. See Dkt. No. 317 at 2-3. Modine, for example, concluded that “[a]n express
`
`finding of willful infringement is a sufficient basis for classifying a case as ‘exceptional,’ and
`
`indeed, when a trial court denies attorney fees in spite of a finding of willful infringement, the
`
`court must explain why the case is not ‘exceptional’ within the meaning of the statute.” 917 F.2d
`
`at 543. Since Octane Fitness, the Federal Circuit has acknowledged that a finding a willfulness
`
`does not necessarily make a case exceptional. See Stryker Corp. v. Zimmer, Inc., 837 F.3d 1268,
`
`1279 (Fed. Cir. 2016).
`
`While Arthrex cites one decision from this district referring to the Modine standard as
`
`late as 2016, see Georgetown Rail Equip. Co. v. Holland L.P., No. 6:13-CV-366, 2016 WL
`
`3346084, at *21 (E.D. Tex. June 16, 2016), the Court did not rely upon it but made extensive
`
`findings concerning the defendant’s “objectively unreasonable” positions which “needlessly
`
`multiplied the proceedings at the expense of the opposing side and the Court.” Modine is also
`
`
`
`2
`
`
`
`Case 2:15-cv-01047-RSP Document 354 Filed 01/25/17 Page 3 of 3 PageID #: 29154
`
`arguably inconsistent with Octane Fitness to the extent that it does not permit a court to consider
`
`the “totality of the circumstances” and instead allows focus solely on one element of a jury
`
`finding, a finding that incidentally is not even mentioned as a relevant factor by Octane Fitness.
`
`See 134 S. Ct. at 1756 n.6 (not including willful infringement in the non-exclusive list of factors
`
`to consider). Even Modine, however, recognizes that if a finding of willfulness makes a case
`
`exceptional, an award of attorney fees is within the discretion of the Court but is not required.
`
`Modine, 917 F.2d at 543.
`
`Arthrex’s second ground for attorney fees is the substantive weaknesses in Defendants’
`
`litigating positions. Dkt. No. 317 at 4-6. The Court does not agree. Having carefully listened to
`
`the testimony during the five-day trial in this case, it cannot be said that Defendants’ litigating
`
`positions were uniformly weak or without merit.
`
`CONCLUSION
`
`Considering the totality of the circumstances, the Court finds that this case is not
`
`exceptional and does not otherwise warrant an award of attorney fees under § 285. Accordingly,
`
`Arthrex’s motion (Dkt. No. 317) is DENIED.
`
`
`
`
`
`3
`
`