United States District Court, D. Minnesota
JODI A. SCHWENDIMANN, f/k/a JODI DALVEY, Plaintiff,
ARKWRIGHT ADVANCED COATING, INC., Defendant. ARKWRIGHT ADVANCED COATING, INC., Counterclaim Plaintiff,
JODI A. SCHWENDIMANN, f/k/a JODI DALVEY and COOLER CONCEPTS, INC., Counterclaim Defendants.
A. Davenport, Devan V. Padmanabhan, and Michelle E. Dawson,
WINTHROP & WEINSTINE, PA, for Jodi A. Schwendimann and
Cooler Concepts, Inc.
Katherine J. Rahlin, Kurt J. Niederluecke, and Laura L.
Myers, FREDRIKSON & BYRON, PA, for Arkwright Advanced
MEMORANDUM OPINION AND ORDER DENYING MOTION FOR
R. TUNHEIM CHIEF JUDGE
Jodi Schwendimann brought this patent-infringement action
against Defendant Arkwright Advanced Coating, Inc.
(“AACI”), alleging infringement of a number of
patents related to dark T-shirt transfer technology. (Compl.,
Apr. 1, 2011, Docket No. 1.) In October 2017, the case
proceeded to trial. The jury found that AACI infringed at
least one claim of Schwendimann's patents and returned a
verdict in favor of Schwendimann. (Am. J., Nov. 14, 2017,
Docket No. 705.) The jury also found that AACI infringed
willfully. (Id.) Schwendimann now moves for attorney
fees. (Pl.'s Mot. for Attorney Fees, Nov. 6, 2017, Docket
No. 694.) Because the Court will find that this case is not
exceptional, it will deny Schwendimann's motion.
Court must decide whether to award Schwendimann attorney fees
pursuant to 35 U.S.C. § 285. Schwendimann estimates that
a fair estimate of her attorney fees and related nontaxable
expenses is approximately $3.3 million. (Pl.'s Sealed
Mem. Supp. Mot. for Attorney Fees (“Attorney Fees
Supp.”) at 35-36, Nov. 6, 2017, Docket No. 696.)
may award “reasonable attorney fees” to the
prevailing party in a patent case when the case is
“exceptional.” 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., 134
S.Ct. 1749, 1756 (2014). The court has discretion to award
attorney fees on a case-by-case basis, considering the
totality of the circumstances. Id. In assessing the
totality of the circumstances, courts consider
“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 (quoting Fogerty v. Fantasy,
Inc., 510 U.S. 517, 534 n.19 (1994)).
provides a laundry list of “bad acts” committed
by AACI that she argues warrant an award of attorney fees.
The Court is unpersuaded that this case is exceptional under
the totality of the circumstances. Octane Fitness,
134 S.Ct. at 1756.
Schwendimann argues that AACI acted in subjective bad faith,
engaging in inappropriate litigation tactics to waste
Schwendimann's time and money. (Attorney Fees Supp. at
22-27.) Indeed, a party's motive to harass or burden an
opponent can warrant an award of attorney fees.
Checkpoint Sys., Inc. v. All-Tag Sec. S.A., 858 F.3d
1371, 1375 (Fed. Cir. 2017). The Court finds that AACI's
litigation conduct was reasonable. Schwendimann vastly
overstates the nature of the facts that she contends
constitute egregious litigation conduct. For example,
Schwendimann argues that “AACI lied to the jury about
its 889 product.” (Attorney Fees Supp. at 23.) During
opening statements, AACI's counsel stated that the CTM60
product was “essentially” the same as the 889
product. (See Trial Tr. Vol. I at 58:5-11, Nov. 27,
2017, Docket No. 760.) The Court finds that this statement
was supported by the testimony of Melissa
Jendzejec-Blanchard, who stated that AACI had not made
significant changes in the CTM60 before selling as the 889
product. (Trial Tr. Vol. VI at 1152:21-24, Nov. 27, 2017,
Docket No. 765.) However, the Court acknowledges that
AACI's counsel misrepresented Schwendimann's expert
conclusions about infringement of the '093 patent.
(Cf. Trial Tr. Vol. I 52:19-53:1 (mischaracterizing
statements made by Schwendimann's expert).) However, the
Court concludes that this misrepresentation was immaterial
because the Court had already granted AACI's motion for
summary judgment with respect to infringement of the '093
patent and AACI had an opportunity to cross-examine the
expert. The Court therefore concludes that AACI's
litigation conduct does not make this case exceptional.
Schwendimann argues that AACI's claims and defenses were
exceptionally meritless. (Attorney Fees Supp. at 28-31.)
Again, the Court disagrees. AACI secured a grant of summary
judgment with respect to infringement of the '093 patent.
Schwendimann v. Arkwright Advanced Coating, Inc.,
220 F.Supp.3d 952, 962-63 (D. Minn. 2016). AACI also secured
a grant of judgment as a matter of law on the issue of
lost-profit damages. (Trial Tr. Vol. IX at 1917:2-23, Nov.
27, 2017, Docket No. 768.) Schwendimann's arguments all
concern factual and credibility disputes best left to be
resolved by the jury. Had the Court believed these claims or
defenses indisputably meritless, it would have granted
summary judgment or judgment as a matter of law at the
appropriate time. While the jury ultimately found that these
claims and defenses were meritless, the Court does not find
that they were so exceptionally meritless as to warrant an
award of attorney fees in this case.
Schwendimann argues that AACI engaged in
“unreasonable” conduct by ignoring rulings from
the Court and engaging in willful infringement. AACI is
correct that district courts “have tended to”
award attorney fees in cases where there is a finding of
willful infringement. S.C. Johnson & Son, Inc. v.
Carter-Wallace, Inc., 781 F.2d 198, 200 (Fed. Cir.
1986). Although a finding of willful infringement may well
support an award of attorney fees, it does not compel one.
This case was a closer call on the issue of willful
infringement than in many other cases and, therefore, the
Court finds that willful infringement alone does not support
a finding of exceptionality. (Trial Tr. Vol. VIII at
1835:22-25, Nov. 27, 2017, Docket No. 767 (describing the
motion for judgment as a matter of law with respect to the
claim of willful infringement as “somewhat
close”). In light of the totality of the circumstances
of this case, the Court concludes that the finding of willful
infringement is insufficient to make this case exceptional.
and finally, the Court concludes that the jury's
significant damages award is more than sufficient to deter
AACI from future bad conduct. The Court does not believe that
an attorney fees award is necessary for deterrence.
Court has had a long and drawn-out opportunity to oversee the
conduct of the parties in this case. Both parties engaged in
excessive motion practice, dilatory tactics, and histrionic
argumentation. For example, the issue of inexorable flow came
before the Court three times before Schwendimann presented
sufficient evidence at trial. Each time the Court warned
Schwendimann about her burden, but the Court did not see an
improvement in the briefing or the evidence
submitted. As another example, AACI's counsel
placed his own human hair on the projector to demonstrate
whether fibers would show on a white background. (Trial Tr.
Vol. V at 807:22-808:4, Nov. 27, 2017, Docket No. 764.) That
tactic may be exceptionable, but it is not exceptional in
light of the fact that Schwendimann escalated the matter on
redirect: there was a notable pause in trial as
Schwendimann's counsel tried to locate either AACI's
counsel's hair or a pair of scissors with which to cut
his own hair before settling on the use of a paper clip as a
demonstrative. (Trial Tr. Vol. V at 881:21-882:15, Nov. 27,
2017, Docket No. 764.) This sort of upstaging was unnecessary
and further delayed a nearly two-week trial. Both parties are
at fault for the length of litigation.
the Court finds - considering the totality of the
circumstances - that this is not an exceptional case. This
case does not stand 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 ...