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Carnegie Mellon v. Marvell: District Court Denies Request for $17 Million in Attorney’s Fees Without Prejudice Pending Appeal of Underlying Judgment

Carnegie Mellon University (“CMU”) filed a motion for attorney fees pursuant to 35 U.S.C. Section 285, seeking attorney fees of approximately $17.2 Million as a prevailing party at the jury trial against Marvell Technology Group (“Marvell”) that resulted in a jury verdict of over $1 billion. The jury also found that Marvell’s infringement was willful.

Section 285 provides that “the court in exceptional cases may award reasonable attorney fees to the prevailing party.” “Although an attorney fee award is not mandatory when willful infringement has been found, precedent establishes that the court should explain its decision not to award attorney fees.” Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10, 37 (Fed. Cir. 2012) cert. denied, 133 S. Ct. 1291 (2013) (citing Spectralytics, Inc. v. Cordis Corp., 649 F.3d 1336, 1349 (Fed. Cir. 2011)). As the district court explained, “[t]he inquiry into attorney fees is related to both willfulness and enhanced damages as explained under § 284, given similar considerations are relevant to both. Id. at 38. ‘However, the situations in which § 284 and § 285 may be invoked are not identical’ because attorney misconduct or other ‘aggravation of the litigation process’ may weigh heavily in regards to attorney fees, but not as to the enhancement of damages. Id.”

The district court also explained that “[w]hen deciding whether to award attorney fees under § 285, a district court engages in a two-step inquiry. First, the Court ‘must determine whether the prevailing party has proved by clear and convincing evidence that the case is exceptional,’ and then, if the case is exceptional, the Court must decide whether awarding attorney fees is justified. MarcTec, LLC v. Johnson & Johnson, 664 F.3d 907, 915-16 (Fed. Cir. 2012). A case may be deemed exceptional under § 285 where there has been ‘willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Federal Rule of Civil Procedure 11, or like infractions.’ Id. Litigation misconduct and ‘unprofessional behavior may suffice, by themselves, to make a case exceptional under § 285.’ Id. at 919.”

CMU asserted that attorney fees should be awarded not only because of the jury’s finding of willfulness, but also because of Marvell’s litigation tactics, which CMU claimed caused unnecessary delays and drove up litigation costs, including contradictory non-infringement and invalidity defenses, wasteful discovery and other litigation tactics.

In response, Marvell asserted that the infringement was not willful, and that even if it was, the case was not exceptional. Marvell also argued that CMU’s allegations of litigation misconduct were baseless and exaggerated and that the defenses it presented were in good faith and supported by the evidence at trial. Finally, Marvell also argued that CMU’s estimates of attorney fees were excessive and not tied to the alleged misconduct.

The district court then explained that this was one of many post-trial motions that were filed by the parties and that this case would be appealed to the Federal Circuit. “From the Court’s perspective, this motion is one of a host of post-trial motions filed by the parties in this case and they have made it clear there will be an appeal to the Federal Circuit, regardless of the Court’s rulings on same. (Docket No. 881 at 35) (‘the Court of Appeals –everybody knows we’ll get there.’). As an appeal is virtually certain, the Court finds that it is premature to decide the contested issues of attorney fees and to undertake the exceptional task of reviewing the calculations of same, at this juncture. Instead, the Court is persuaded by the procedure employed by Judge Yohn of the U.S. District Court for the Eastern District of Pennsylvania, whereby he denied a motion for attorney fees, without prejudice, to the parties’ right to renew the motion and arguments after the appeal was resolved by the Federal Circuit. Teva Pharm. Indus. Ltd. v. AstraZeneca Pharms. LP, No. 08-4786, 2012 WL 3063994 (E.D. Pa. July 26, 2012). After the Circuit adjudicated the appeal, the parties then renewed their motions and the Court was in a better position to assess whether an award of attorney fees was appropriate.”

The district court here decided to follow a similar procedure and hold the attorney fee motion until after the appeal was decided. “Again, all of the Court’s forthcoming rulings on these issues will undoubtedly be appealed. (Docket Nos. 880 at 29; 881 at 35). Thus, the appropriate course of action for “economy of time and effort for itself, for counsel and for litigants” is to deny the instant motion, without prejudice, to be renewed after the case is fully adjudicated before the Federal Circuit and/or further proceeding at the trial level. Bechtel Corp. v. Local 215, Laborers’ Int’l Union, 544 F.2d 1207, 1215 (3d Cir.1976).”

Carnegie Mellon University v. Marvell Technology Group, LTD, et al., Case No. 09-290 (W.D. Penn. June 26, 2013
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