United States District Court, D. Colorado
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT'S MOTION FOR ATTORNEYS' FEES
William J. Martinez United States District Judge
Plaintiff
Andersen Manufacturing, Inc. (“Andersen”),
brought this suit against Defendant Wyers Products Group,
Inc. (“Wyers”), for patent infringement. The
inventions at issue are an adjustable-height trailer hitch
made from aluminum, as described in U.S. Patent No. 7, 156,
412 (“412 Patent”); and a process for
manufacturing that hitch, as described in U.S. Patent No. 7,
222, 510 (“510 Patent”). At summary judgment, the
Court found that (i) the 412 Patent was invalid as
anticipated and (ii) Wyers did not infringe the 510 Patent
(“Summary Judgment Order”). Andersen Mfg.
Inc. v. Wyers Prod. Grp., Inc., 2019 WL 479777 (D. Colo.
Feb. 7, 2019) (ECF No. 114). The Court entered final judgment
in Wyers's favor on February 7, 2019. (ECF No. 115.)
Currently
before the Court is Wyers's Motion to Declare this Case
Exceptional and for Award of Attorney Fees and Costs. (ECF
No. 118.) For the reasons explained below, the Court grants
this motion in part and denies it in part, awarding Wyers
$131, 542.07 in attorneys' fees.
I.
LEGAL STANDARD
“The
court in exceptional cases may award reasonable attorney fees
to the prevailing party [in a patent case].” 35 U.S.C.
§ 285. “[A]n ‘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.” Octane Fitness, LLC v. ICON Health
& Fitness, Inc., 572 U.S. 545, 554 (2014). The
question of whether a case is exceptional is evaluated
“case-by-case . . . considering the totality of the
circumstances, ” and is within the trial court's
discretion. Id. Moreover, the two types of
“exceptionality”-i.e., “the
substantive strength [or weakness, rather] of a party's
litigating position” and “the unreasonable manner
in which the case was litigated, ” id.- are
“ultimately consider[ed] . . . together under the
‘totality of the circumstances, '” SFA
Sys., LLC v. Newegg Inc., 793 F.3d 1344, 1347 (Fed. Cir.
2015). The burden of proof is preponderance of the evidence.
Octane Fitness, 572 U.S. at 557.
II.
BACKGROUND
A.
The Patents and Related Prior Art
1.
The 412 Patent
The
U.S. Patent & Trademark Office (“PTO”) issued
the 412 Patent to Andersen on January 2, 2007. See
412 Patent, cover sheet. The field of the invention is towing
hitches, such as for towing a boat or RV behind a truck.
Id. at 1:14-62. As relevant here, the patent
discloses a “stepped” (adjustable) hitch
assembly, which permits the user to attach trailers of
varying heights while keeping the trailer level. In the
following illustrations from the patent, Figure 5 depicts the
“drop bar” component whose upper (horizontal)
segment slides into the towing vehicle's hitch adapter,
and whose other (vertical) segment is a series of graded
steps over which the "sleeve" in Figure 6 can
slide, locking into various heights. The hollow column
disclosed in Figure 6 secures the ball mount-the item that
actually makes contact with the trailer-illustrated in Figure
7.
(Image
Omitted)
As will
become clear below, the 412 Patent was not the first to
propose this basic design. The patentable innovation asserted
in the 412 Patent is that the components are made of
aluminum, rather than steel. Id. at 1:42-2:4.
2.
The 510 Patent
The PTO
issued the 510 Patent to Andersen on May 29, 2007, from an
application that traces back to the same application from
which the 412 Patent arose. See 510 Patent, cover
sheet. The 412 and 510 Patents share the same specification,
but in terms of the claimed invention, the 510 Patent
emphasizes the method for creating aluminum drop bars, as
compared to the 412 Patent's emphasis on the hardware
itself.
The
illustrations relevant to the 510 Patent focus on a
non-adjustable drop bar, i.e., one that emerges
horizontally from the vehicle's hitch adapter, then
slopes downward, then bends again into a lower horizontal
component, to which the ball adapter is attached, as in the
following:
(Image
Omitted)
With
this end product in mind, the patent illustrates how aluminum
may be extruded through a die to form a thick metal sheet
with the appropriate drop bar profile (Figure 1), after which
the sheet can be sliced into multiple proto-drop bars that
are machined into their final form (Figure 2):
(Image
Omitted)
Although
these illustrations only show the vaguely S-shaped,
non-adjustable drop bar, the 510 Patent does not limit itself
to manufacturing that shape. It also applies to extrusion of
aluminum drop bars in the upside-down-L shape of the drop bar
emphasized in the 412 Patent. See 510 Patent, fig.
5; id. at 6:12-17.
3.
Moss 472 & Moss 405
In this
case, whether the patents-in-suit describe anything
novel-particularly the 412 Patent-has mostly revolved around
the significance of two prior art references. The first is a
June 5, 2002 patent application by Newell Ryan Moss et
al., U.S. Patent Application Pub. No. 2003/0052472 A1,
to which the parties refer as "Moss 472." Moss 472
disclosed a vertically adjustable hitch assembly similar to
that disclosed in the 412 Patent, save that Moss's
stepped gradations are a series of holes drilled through the
middle of the vertical segment of the drop bar:
(Image
Omitted)
Moss
472, fig. 1. Moss 472 states that, "[i]n certain
embodiments of the present invention, the apparatus 10 and
the components thereof are made of steel, however,
aluminum, ferrous alloys, or any other material
possessing sufficient strength and durability may be
used." Moss 472 ¶ 57 (emphasis added).
But
before Moss filed the document known as Moss 472, he filed
U.S. Patent Pub. No. 2002/0113405 A1, to which the parties
refer as "Moss 405." Moss 472 expressly
incorporates Moss 405. See Moss 472 ¶ 17
(declaring "U.S. patent application Ser. No. 10/078,
322," which became the Moss 405 publication, to be
"incorporated herein by reference"). Moss 405
discloses essentially the same invention as in Figure 1 of
Moss 472, reproduced above, but Moss 405 also discloses a
different potential embodiment, designed not to be a trailer
hitch, but a mount for something like a flagpole:
(Image
Omitted)
Moss
405 names item 98-comprising the tube (100) and its adjoining
bracket (102)- the "standard," which then attaches
to the horizontal segment (34) that is meant to be inserted
into a hitch adapter. Id. ¶ 69.
Regarding
Figure 15, Moss 405 states the following:
Aluminum may serve well for the standard 98. Similarly, the
trunnion 12 [sic: 34] may be fabricated of aluminum
for ease in fabrication. Since the standard 98 need not
sustain the same loads as may a hitch 10, lighter materials
such as aluminum, or metals of lighter gauges may serve as
the standard 98 and trunnion 34.
Id. ¶ 70. This suggests that, when Moss filed
the document that became Moss 405, he viewed aluminum as
unsuitable for trailer hitches. The incorporation by
reference of Moss 405 into Moss 472 thus creates a tension
with Moss 472's endorsement of aluminum for trailer
hitches.
B.
Diversi-Tech Lawsuit
Andersen
owns a third patent related to trailer hitches, U.S. Patent
No. 6, 908, 099 ("099 Patent"), issued on June 21,
2005. It discloses minor variations on the method of
manufacturing a drop bar that would eventually become the 510
Patent.[1]
In
November 2005, Andersen sued a company named Diversi-Tech for
infringement of the 099 Patent (“Diversi-Tech
Lawsuit”). See Andersen Mfg., Inc. v. Diversi-Tech
Corp., No. 2:05-cv-9923 (D. Utah, Nov. 4, 2005).
Andersen moved for a preliminary injunction, and
Diversi-Tech's response brief highlighted Moss 472 as
teaching that aluminum could be used for a trailer hitch.
(ECF No. 118-3 at 24-25.)[2] Without mentioning
Moss 472, U.S. District Judge Dee Benson denied the
preliminary injunction in July 2006, reasoning that there was
prior art evidence of using aluminum for trailer hitches and
for manufacturing them in the way claimed by the 099 Patent,
so there was a strong question of invalidity and therefore
Andersen had failed to show a likelihood of success on the
merits. (ECF No. 96-8 at 60-63.)
In July
2007, Judge Benson denied a second preliminary injunction
motion, this one based on the newly issued 412 Patent. (ECF
No. 96-10.) He again found that there were substantial prior
art references both to drop-bar-style trailer hitches and the
use of aluminum “in the trailer hitch industry.”
(Id. at 3-4.) So, again, he held that there was a
strong question of invalidity and therefore Andersen had
failed to show a likelihood of success on the merits.
(Id. at 4.)
The
Federal Circuit affirmed Judge Benson's two denials. (ECF
No. 28-3.) “Practically no activity” took place
in the action after that, and Judge Benson dismissed it with
prejudice for lack of prosecution on October 5, 2009. (ECF
No. 96-12 at 2-3.)
C.
Wyers's Hitch
Since
2012, Wyers has offered for sale its "Razor"
adjustable hitch, which is made of aluminum and is remarkably
similar to the device disclosed in the 412 Patent:
(Image
Omitted)
(ECF No. 96-32 at 2.) As this photograph shows, the only
apparent differences between the Razor and the invention
disclosed in the 412 Patent are that the graded steps face
toward the towing vehicle, and the surface facing away from
the towing vehicle is rounded.
D.
Origins of this Lawsuit and Proceedings Before
Transfer
This
case began in January 2016 in the United States District
Court for the District of Idaho, the Hon. B. Lynn Winmill
presiding. (ECF No. 1.) In May 2016, Wyers filed with the PTO
a request for ex parte reexamination of the 412
Patent. (ECF No. 28-1 at 3; ECF No. 29-2 through 29-9.)
Shortly afterward, Wyers moved for a stay of the lawsuit
pending the outcome of the reexamination. (ECF No. 28-1.)
Andersen opposed, arguing that whether the PTO would grant
Wyers's request remained speculative, and, in any event,
Wyers's request for ex parte reexamination (as
opposed to inter partes review) would not
definitively resolve anything because the results of ex
parte proceedings may be re-litigated in court. (ECF No.
34 at 2-3.) Andersen further asserted that
“reexaminations could take five years or more, ”
and so a stay “would be highly prejudicial” due
to the delay. (Id. at 3; see also id. at 10
(“Although[] the Patent Office resolves 95% of ex
parte reexaminations within 25 months, if there is an
appeal to the Patent Trial and Appeals Board or the Federal
Circuit, the reexamination can take much longer.”).)
In
September 2016-before a ruling from Judge Winmill-Wyers
informed the Court that the PTO had granted the reexamination
request. (ECF Nos. 45-1, 45-3.) Andersen responded that it
still opposed to stay because “[r]esolution of the
reexamination including any appeal could take five years or
more.” (ECF No. 49 at 1-2.)
Judge
Winmill denied the motion to stay in December 2016, reasoning
that the stay would be unduly prejudicial to Andersen given
the length of reexamination proceedings-“[m]ost of
these reexaminations, including the inevitable appeal to the
Patent Trial and Appeal Board, take three to five years to
...