Mobiloc LLC v. Neutron Holdings Inc ( 2022 )

1 2 3 4 5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 MOBILOC, LLC, 8 No. 2:20-CV-1570-BJR 9 Plaintiff, v. ORDER ON DEFENDANT’S MOTION 10 FOR ATTORNEY FEES NEUTRON HOLDINGS, INC. DBA LIME, 11 12 Defendant. 13 This matter is before the Court on Defendant’s Motion for Attorney Fees. Dkt. No. 63. 14 Having reviewed the materials submitted by the parties and the balance of the record in this case, 15 16 the Court DENIES Defendant’s motion. The reasons for the Court’s decision are set forth 17 below. 18 I. BACKGROUND 19 Plaintiff Mobiloc, LLC filed this case on October 23, 2020, against Defendant Neutron 20 Holdings Inc., which is doing business as “Lime.” Plaintiff owns U.S. Patent No. 8,854,207 21 (“the ‘207 patent”), which is entitled “Mobile Lock with Retractable Cable.” Dkt. No. 9. The 22 ‘207 patent discloses a mobile lock that includes “a location component inside the body 23 24 component” of the lock. Id., Claim 1. The “location component” includes a Global Positioning 25 System (GPS) location chip set. Id. 26 ORDER - 1 1 Defendant operates fleets of electric bicycles (“e-bikes”) that are available for rent to 2 customers through a mobile phone application. Plaintiff’s complaint alleged that Defendant’s 3 “Model 5.5 JUMP e-bike” directly infringed the ‘207 patent. 4 In response to Plaintiff’s complaint, Defendant denied infringement and asserted that its 5 e-bikes “do not include the claimed ‘mobile lock’ with ‘a location component inside the body 6 component’ as required by every claim of the ‘207 patent.” Dkt. No. 34 at 5. Although 7 Defendant’s e-bike has a lock with a retractable cable, the lock does not have a “location 8 9 component” (e.g, a GPS chip) inside of it. Instead, the accused e-bike has a GPS chip in an 10 electronics module on the handlebars of the bike, which is connected by a wire to the inside of 11 the bike’s lock. 12 On March 2, 2021, the parties filed a stipulation indicating that they had “identified an 13 issue that may be case dispositive, and agree[d] that it would streamline matters in this case to 14 have the Court’s determination of this issue before time consuming and expensive claim 15 16 construction proceedings and further exchange of discovery.” Dkt. No. 37 at 1-2. The parties 17 indicated that Defendant planned to file a motion for summary judgment asserting that its 18 accused e-bikes do not infringe any claim of the ‘207 patent because all claims require “a 19 location component inside [a] body component” of a lock, and the accused e-bikes do not have a 20 location component “inside” the body component of their locks. Id. at 2. In this stipulation, 21 Plaintiff acknowledged that the “location component” of the accused e-bike is not located inside 22 the “body component” of a lock; however, Plaintiff asserted that Defendant’s e-bike nonetheless 23 24 infringed the ‘207 patent under the doctrine of equivalents. Id. Based on this stipulation, the 25 Court granted the parties’ request to stay discovery and claim construction briefing pending a 26 ruling on Defendant’s motion for summary judgment. ORDER - 2 1 On August 19, 2021, the Court issued an order granting Defendant’s motion for summary 2 judgment of non-infringement. The Court concluded that no reasonable jury could find 3 infringement under the doctrine of equivalents.1 Dkt. No. 52. 4 The Court’s order resolved Plaintiff’s claims against Defendant for patent infringement, 5 but did not resolve Defendant’s counterclaim which alleged that the ‘207 patent was invalid (the 6 “Invalidity Counterclaim”). The Court directed Defendant to inform the Court by August 30, 7 2021, whether it intended to pursue this counterclaim. On August 27, 2021, Defendant’s counsel 8 9 notified Court staff by email that it planned to dismiss this counterclaim without prejudice and 10 indicated that the parties were negotiating a stipulation of dismissal. Dkt. No. 54-1. However, 11 the parties were unable to agree on a stipulated dismissal. As a result, Defendant filed a motion 12 to dismiss its Invalidity Counterclaim without prejudice. On September 27, 2021, the day before 13 Plaintiff’s response to Defendant’s motion was due, Plaintiff’s counsel filed a motion to 14 withdraw as attorneys in this matter. Plaintiff filed no response to Defendant’s motion to dismiss 15 16 the Invalidity Counterclaim. 17 On October 26, 2021, the Court entered an order: (1) granting Defendant’s motion to 18 dismiss its Invalidity Counterclaim without prejudice; and (2) granting Plaintiff’s counsel’s 19 motion to withdraw. The Court entered judgment in this matter on the same day. 20 On November 9, 2021, Defendant filed the pending motion for attorney fees. Plaintiff, 21 appearing through new counsel, opposes the motion. 22 23 24 25 26 1 The Court did not reach additional arguments offered by Defendant for summary judgment based on the disclosure-dedication doctrine and ensnarement. Dkt. No. 9 n.5. ORDER - 3 1 II. DISCUSSION 2 Defendant seeks an award of attorney’s fees pursuant to 35 U.S.C. § 285. This provision 3 of the Patent Act provides that “[t]he court in exceptional cases may award reasonable attorney 4 fees to the prevailing party.” (emphasis added). The United States Supreme Court has held that 5 an “exceptional case” is “simply one that that stands out from others with respect to the 6 substantive strength of a party’s litigating position (considering both the governing law and the 7 facts of the case) or the unreasonable manner in which the case was litigated.” Octane Fitness, 8 9 LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 554 (2014). “District courts may determine 10 whether a case is ‘exceptional’ in the case-by-case exercise of their discretion, considering the 11 totality of the circumstances.” Id. Factors that district courts may consider include 12 “frivolousness, motivation, objective unreasonableness (both in the factual and legal components 13 of the case) and the need in particular circumstances to advance considerations of compensation 14 and deterrence.” Id. at 554 n.6 (quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 15 16 (1994)). 17 Defendants argue that this case should be deemed “exceptional” under 35 U.S.C. § 285 18 for several reasons, including: (1) Plaintiff’s failure to conduct a reasonable pre-suit 19 investigation; (2) Plaintiff’s decision to continue litigating after Defendant demonstrated that the 20 accused e-bike lacked a location component inside the lock; (3) Plaintiff’s speculative assertion 21 that a former Jump employee stole the invention and gave it to his former employer; (4) the 22 substantial difference between the accused e-bike and the patented bike lock; (5) Plaintiff’s 23 24 refusal to stipulate to Defendant’s dismissal of its Invalidity Counterclaim after summary 25 judgment was granted in Defendant’s favor on noninfringement; and (6) similarities between this 26 ORDER - 4 1 case and other cases that courts have found to be “exceptional” for purposes of an award of 2 attorney’s fees under 35 U.S.C. § 285. 3 In response, Plaintiff maintains that its infringement position, though unsuccessful, was 4 not frivolous and was “well within the normal range for patent cases.” Dkt. No. 74 at 5. 5 Plaintiff argues that it litigated this case reasonably, noting that it agreed early in the case to stay 6 further discovery and claim construction proceedings until the Court ruled on Defendant’s 7 motion for summary judgment of noninfringement. Plaintiff also contends that there is no 8 9 evidence that its pre-filing investigation was inadequate and asserts that its pre-filing 10 investigation is protected attorney work product. Plaintiff notes that it revealed its infringement 11 position early in the litigation, and points out that neither Defendant nor Defendant’s 12 predecessor-in-interest responded to pre-suit correspondence from Plaintiff offering to license 13 the ‘207 patent. 14 Defendant’s motion presents a relatively close question for the Court. Pointing to the 15 16 attorney work product doctrine, Plaintiff has not provided the Court with any basis to evaluate 17 the adequacy of Plaintiff’s pre-suit investigation. It appears clear that Plaintiff filed this lawsuit 18 without knowing the actual location of the GPS chip in the accused e-bike, and Plaintiff does not 19 respond to Defendant’s contention that Plaintiff could have determined the location of the GPS 20 chip in the bike before filing this lawsuit by accessing public records from the Federal 21 Communications Commission. Plaintiff plainly erred in its complaint when it alleged direct 22 infringement of the ‘207 patent by Defendant, and Plaintiff’s fallback position that the accused e- 23 24 bike infringed the ‘207 patent under the doctrine of equivalents was not strong. In addition, 25 Plaintiff’s allegations of copying by a former Jump employee were speculative and not well- 26 supported. ORDER - 5 1 Nonetheless, the Court does not find that this case stands out as exceptionally weak. 2 Although the Court ruled against Plaintiff on summary judgment, the Court did not find 3 Plaintiff’s infringement position under the doctrine of equivalents to be frivolous or raised in bad 4 faith. Plaintiff also acted reasonably by stipulating early in the litigation to stay further discovery 5 and claim construction proceedings until the Court ruled on Defendant’s motion for summary 6 judgment of non-infringement. Although Plaintiff acted less reasonably by refusing to stipulate 7 to dismissal of Defendant’s Invalidity Counterclaim, this refusal did not substantially impact the 8 9 difficulty or expense of resolving this case. Under the totality of the circumstances, the Court 10 does not find this case to be exceptional for the purpose of awarding attorney’s fees to Defendant 11 under 35 U.S.C. § 285. 12 III. Conclusion 13 For the foregoing reasons, the Court DENIES Defendant’s motion for attorney fees (Dkt. 14 No. 63). 15 16 Dated: March 24, 2022 17 A 18 19 Barbara Jacobs Rothstein U.S. District Court Judge 20 21 22 23 24 25 26 ORDER - 6