Spineology, Inc. v. Wright Medical Technology Inc. , 910 F.3d 1227 ( 2018 )

United States Court of Appeals
for the Federal Circuit
______________________
SPINEOLOGY, INC.,
Plaintiff-Appellee
v.
WRIGHT MEDICAL TECHNOLOGY, INC., A
DELAWARE CORPORATION,
Defendant-Appellant
______________________
2018-1276
______________________
Appeal from the United States District Court for the
District of Minnesota in No. 0:15-cv-00180-JNE-FLN,
Judge Joan N. Ericksen.
______________________
Decided: December 14, 2018
______________________
RANDALL THOMAS SKAAR, Skaar Ulbrich Macari, P.A.,
Minnetonka, MN, argued for plaintiff-appellee.
ANTHONY JAMES FITZPATRICK, Duane Morris LLP,
Boston, MA, argued for defendant-appellant. Also repre-
sented by CHRISTOPHER S. KROON; DIANA SANGALLI,
THOMAS W. SANKEY, Houston, TX.
______________________
Before PROST, Chief Judge, DYK and MOORE, Circuit
Judges.
2 SPINEOLOGY, INC. v. WRIGHT MEDICAL TECHNOLOGY INC.
MOORE, Circuit Judge.
Wright Medical Technology, Inc., appeals the United
States District Court for the District of Minnesota’s denial
of its motion for attorney fees under 35 U.S.C. § 285.
Because we hold that the district court did not abuse its
discretion in denying Wright’s motion, we affirm.
BACKGROUND
Spineology, Inc., is the assignee of U.S. Patent
No. 6,383,188, reissued as No. RE42,757, which describes
an “expandable reamer” for use in orthopedic surgery.
’757 patent at 1:16–17. Wright manufactures a reamer
known as the X-REAM®. In 2015, Spineology sued
Wright, alleging the X-REAM® infringes claims 15, 21–
23, and 33–35 of the ’757 patent.
The district court issued a claim construction order in
2016. In the order, it acknowledged that the parties
disputed construction of the term “body,” but it declined to
adopt either party’s construction. Wright and Spineology
then filed cross-motions for summary judgment on in-
fringement. Recognizing the alleged infringement de-
pended on how “body” was construed, the district court
construed “body” consistent with Wright’s non-
infringement position and granted Wright’s motion. 1
Wright then moved for attorney fees, arguing Spine-
ology’s proposed construction of “body,” its damages
theories, and its litigation conduct rendered this case
“exceptional” under § 285. The district court denied the
motion. It determined that, while ultimately the court
1 We affirmed this construction and the grant of
summary judgment of non-infringement on appeal.
Spineology, Inc. v. Wright Med. Tech., Inc., 739 F. App’x
633, 637–38 (Fed. Cir. 2018).
SPINEOLOGY, INC. v. WRIGHT MEDICAL TECHNOLOGY INC. 3
rejected Spineology’s proposed construction, “[t]he at-
tempt was not so meritless as to render the case excep-
tional.” J.A. 64. It similarly determined “the arguments
made by Spineology to support its damages theory . . . are
not so meritless as to render the case exceptional.”
J.A. 65. It concluded “[n]othing about this case stands out
from others with respect to the substantive strength of
Spineology’s litigating position or the manner in which
the case was litigated.” J.A. 65–66.
DISCUSSION
Under § 285, “[t]he court in exceptional cases may
award reasonable attorney fees to the prevailing party.”
“[A]n ‘exceptional’ case is 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).
“District courts may determine whether a case is ‘excep-
tional’ in a case-by-case exercise of their discretion, con-
sidering the totality of the circumstances.” Id. We review
“all aspects of a district court’s § 285 determination for
abuse of discretion,” keeping in mind that “the district
court ‘is better positioned’ to decide whether a case is
exceptional, because it lives with the case over a pro-
longed period of time.” Highmark Inc. v. Allcare Health
Mgmt. Sys., Inc., 134 S. Ct. 1744, 1747 (2014) (quoting
Pierce v. Underwood, 487 U.S. 552, 559–60 (1988)).
Because we hold the district court did not abuse its
discretion in denying Wright’s motion for attorney fees
under § 285, we affirm.
I
Wright argues Spineology’s claim construction posi-
tion was so unreasonable it rendered this case “exception-
4 SPINEOLOGY, INC. v. WRIGHT MEDICAL TECHNOLOGY INC.
al” under § 285. It argues Spineology’s proposed construc-
tion of “body” was meritless, and its continued pursuit of
this construction after the district court declined to adopt
it in the claim construction order was unreasonable. We
are unpersuaded.
Prior to the claim construction order, Spineology and
Wright each proposed a construction of “body.” J.A. 18,
21. In the order, the district court “decline[d] to adopt
either party’s proposed construction of ‘body,’” determin-
ing “the claims themselves provide substantial guidance
as to the meaning of the claim.” J.A. 22. It was not until
summary judgment that the district court construed
“body” consistent with Wright’s, rather than Spineology’s,
proposed construction.
We agree with the district court that, while Spineolo-
gy’s proposed construction of “body” was ultimately re-
jected at summary judgment, “[t]he attempt was not so
meritless as to render the case exceptional.” J.A. 64. As
we have stressed, “[a] party’s position . . . ultimately need
not be correct for them not to ‘stand[] out’.” SFA Sys.,
LLC v. Newegg Inc., 793 F.3d 1344, 1348 (Fed. Cir. 2015).
And Wright cannot fairly criticize Spineology for continu-
ing to pursue a construction not adopted by the district
court in the claim construction order, since the district
court declined to adopt Wright’s proposed construction as
well. We see no abuse of discretion here.
II
Despite the fact that this case was resolved on sum-
mary judgment of non-infringement with no consideration
of or rulings on damages, Wright argues the district court
should have, as part of its exceptional case determination,
reviewed the parties’ various expert reports on damages
and assessed the merits of Spineology’s damages theories.
Wright argues that, after such a review, the district court
should have concluded that Spineology’s damages theories
SPINEOLOGY, INC. v. WRIGHT MEDICAL TECHNOLOGY INC. 5
were so unreasonable as to render this case “exceptional”
under § 285. Wright criticizes the lost profits analysis
offered by Spineology’s expert, Mr. Nantell, as improperly
calculating the sales Wright would have made “but for”
Spineology’s infringement. It also criticizes Mr. Nantell’s
reasonable royalties analysis as improperly relying on the
entire market value rule (“EMVR”) and employing a
flawed royalty rate. We are unpersuaded.
“This court has affirmed lost profit awards based on a
wide variety of reconstruction theories,” Versata Software,
Inc. v. SAP Am., Inc., 717 F.3d 1255, 1263–64 (Fed. Cir.
2013), and Spineology marshaled case law to make a
colorable argument in support of Mr. Nantell’s reliance on
the EMVR, e.g., Interactive Pictures Corp. v. Infinite
Pictures, Inc., 274 F.3d 1371, 1384–86 (Fed. Cir. 2001).
Perhaps Spineology’s damages theories would not have
prevailed, but “a strong or even correct litigating position
is not the standard by which we assess exceptionality.”
Stone Basket Innovs., LLC v. Cook Med. LLC, 892 F.3d
1175, 1180 (Fed. Cir. 2018). The district court explained
that, even if it had excluded Spineology’s damages expert,
Spineology’s damages theories are not so meritless as to
render the case exceptional. J.A. 65. Wright argues on
appeal that the district court did not do enough to analyze
the merits of Spineology’s damages theory. We do not
agree. On this record, where the district court never
reached the parties’ damages arguments, we are in no
position to upend its determination that Mr. Nantell’s
analysis was not meritless.
Wright asks this court to basically decide the damages
issues mooted by summary judgment in order to deter-
mine whether it ought to obtain attorney fees for the
entire litigation. This we will not do. We will not force
the district court, on a motion for attorney fees, to conduct
the trial it never had by requiring it to evaluate Mr.
Nantell’s “but for” calculations or royalty rates, and we—
6 SPINEOLOGY, INC. v. WRIGHT MEDICAL TECHNOLOGY INC.
an appellate court—will certainly not conduct that trial in
the first instance.
A district court need not, as Wright seems to urge, lit-
igate to resolution every issue mooted by summary judg-
ment to rule on a motion for attorney fees. And we need
not, as Wright requests, get into the weeds on issues the
district court never reached. We see no abuse of discre-
tion in the district court’s determination that “the argu-
ments made by Spineology to support its damages theory
. . . are not so meritless as to render the case exceptional.”
J.A. 65. We see no error in the district court’s determina-
tion that, on this record, the case was not exceptional, and
we caution future litigants to tread carefully in their
complaints about district courts not doing enough.
III
Wright further challenges as “exceptional” Spineolo-
gy’s conduct during litigation. It criticizes Spineology for
allegedly attempting to mislead the district court with a
cropped and annotated version of Figure 2, ignoring
evidence that undermined its proposed construction of
“body,” and withholding its expert’s measurements of the
X-REAM®. Again, we are unpersuaded.
As the district court observed, nothing Wright points
to makes this case “stand[] out from others with respect to
. . . the unreasonable manner in which the case was
litigated.” J.A. 65-66. The district court has “live[d] with
the case over a prolonged period of time.” Highmark, 134
S. Ct. at 1747–48 (quoting Pierce, 487 U.S. at 559–60). It
saw Spineology’s version of Figure 2, considered the
evidence regarding claim construction, and compelled
production of the X-REAM® measurements. The district
court is undoubtedly “‘better positioned’ to decide whether
[this] case is exceptional.” Id. We see no abuse of discre-
tion in the district court’s determination that it is not.
SPINEOLOGY, INC. v. WRIGHT MEDICAL TECHNOLOGY INC. 7
IV
Wright requests that, at a minimum, we remand this
case for a more complete assessment of whether the
“totality of the circumstances” renders this case excep-
tional. Octane Fitness, 134 S. Ct. at 1756. We see no
need to do so.
After reviewing Wright’s arguments regarding Spine-
ology’s claim construction position, damages theories, and
litigation conduct, the district court concluded “[n]othing
about this case stands out from others with respect to the
substantive strength of Spineology’s litigating position or
the manner in which the case was litigated.” J.A. 65–66.
The district court “had no obligation to write an opinion
that reveals [its] assessment of every consideration,” and
remand is unnecessary to obtain one. Univ. of Utah v.
Max-Planck-Gesellschaft, 851 F.3d 1317, 1323 (Fed. Cir.
2017).
CONCLUSION
Because we review “all aspects of a district court’s
§ 285 determination for abuse of discretion,” and we see
no abuse here, we affirm. Highmark, 134 S. Ct. at 1747.
We remind that “fee awards are not to be used ‘as a
penalty for failure to win a patent infringement suit.’”
Checkpoint Sys., Inc. v. All-Tag Sec. S.A., 858 F.3d 1371,
1376 (Fed. Cir. 2017).
AFFIRMED
COSTS
Costs to Spineology.