Forcillo v. Lemond Fitness, Inc.

NOTE: Pursuant to Fed. Cir. R. 47.6, this disposition is not
citable as precedent. It is a public record.
United States Court of Appeals for the Federal Circuit
05-1390
JOHN FORCILLO,
Plaintiff-Appellee,
v.
LEMOND FITNESS, INC. and BRUNSWICK CORPORATION, INC.,
Defendants-Appellants.
__________________________
DECIDED: February 17, 2006
__________________________
Before MICHEL, Chief Judge, MAYER and BRYSON, Circuit Judges.
MICHEL, Chief Judge.
LeMond Fitness, Inc. and Brunswick Corporation, Inc. (collectively “LeMond”)
appeal an order denying their motion for attorney’s fees under 35 U.S.C. § 285.
Because the district court did not clearly err in finding the unproven and unadjudicated
allegations of inequitable conduct insufficient to render this case exceptional, we affirm.
I. BACKGROUND
John Forcillo is the holder of United States Patent Nos. 6,612,970 and 6,669,603,
both directed to stationary exercise bicycles. Forcillo sued LeMond in the United States
District Court for the Southern District of Illinois, alleging infringement of the ‘970 patent.
Upon LeMond’s motion, the action was transferred to the Western District of
Washington on April 14, 2004. LeMond asserted counterclaims that the ‘970 and ‘603
patents were not infringed, were invalid and unenforceable, as well as violations of the
Washington Consumer Protection Act.
Numerous motions, including several motions for summary judgment filed by
defendants, were filed in the months that followed. Most relevant to this appeal was
LeMond’s motion for summary judgment that the patents-in-suit were unenforceable
due to inequitable conduct. In short, LeMond accused Forcillo of failing to disclose as
prior art an exercise bicycle called the Body Bike, which he had purchased before
developing his own exercise bicycle.
After that motion was fully briefed (but before it was decided), however, Forcillo
moved for leave to voluntarily dismiss the case with prejudice, reportedly because he
did not have the financial resources to continue litigating. The district court granted
Forcillo’s motion in an order dated February 11, 2005.1 Judgment was entered the
same day, although it was subsequently amended on February 18, 2005, to reflect that
LeMond’s counterclaims were dismissed without prejudice, rather than with prejudice.
On March 4, 2005, LeMond filed two additional motions, seeking, respectively:
(1) costs of $36,544.64 as the prevailing party; and (2) attorney’s fees in the amount of
$543,313.80, arguing that the alleged inequitable conduct rendered the case
exceptional pursuant to 35 U.S.C. § 285. By order of April 29, 2005, the court denied
the motion for attorney’s fees and granted-in-part the motion for costs.2 Costs were
1
LeMond did not appeal the order allowing Forcillo’s voluntary dismissal.
2
Although the order was dated February 11, 2005, it was later corrected to
read April 29, 2005, as noted in the docket report on May 9, 2005.
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awarded in the amount of $24,916.60. LeMond now appeals only the denial of its
motion for attorney’s fees. We have jurisdiction pursuant to 28 U.S.C. 1295(a)(1).
II. DISCUSSION
In considering whether attorney’s fees should be awarded, the trial court
undertakes a two-step inquiry. It first determines whether clear and convincing
evidence establishes that the case is exceptional pursuant to 35 U.S.C. § 285 and, if so,
then decides as a matter of discretion whether any award should be granted. On
appeal, whether the case is exceptional is a factual determination reviewed for clear
error, while the decision whether to award fees is reviewed for abuse of discretion.
Evident Corp. v. Church & Dwight Co., 399 F.3d 1310, 1315 (Fed. Cir. 2005).
LeMond’s appeal boils down to an attempt to revive its motion for summary
judgment of unenforceability due to inequitable conduct. Putting aside the question of
whether there was clear and convincing evidence of inequitable conduct, however, the
district court correctly observed that such a finding would not automatically render the
case exceptional nor would it compel an award of attorney’s fees. Lighting World, Inc.
v. Birchwood Lighting, Inc., 382 F.3d 1354, 1367 (Fed. Cir. 2004). Indeed, it concluded
that there was “no gross injustice in this action” and that “even if [the inequitable
conduct allegations were] proven, they do not make this case ‘exceptional.’” Forcillo v.
LeMond Fitness, Inc., No. C04-848, slip op. at 3 (W.D. Wa. Apr. 29, 2005). Even if it
had found this case to be exceptional, it would have been within the district court’s
discretion to decline an award of attorney’s fees.
In any event, the district court did not clearly err in finding that the record before it
was insufficient to prove inequitable conduct by clear and convincing evidence.
05-1390 3
LeMond relied on the same evidence it had previously proffered with its summary
judgment motion to support its assertion that the case was exceptional. Unlike the
cases cited by LeMond, there was never a finding (as opposed to an unproven
allegation) of inequitable conduct. Even if the district court had ruled on the pending
motion, summary judgment would have been inappropriate because there were genuine
factual disputes concerning both the materiality of the Body Bike and Forcillo’s alleged
intent to deceive. No other evidence (of litigation misconduct, for example), much less
clear and convincing evidence, was proffered to demonstrate that this case was
exceptional. Thus, it was not clearly erroneous for the district court to find that this case
was not exceptional.
LeMond further asserts that at least a remand is required because the district
court’s order was overly conclusory and lacked detailed findings of fact. This argument
is rejected. Considering the unusual procedural posture of this case, the district court
justifiably declined to have a bench trial on the issue of inequitable conduct after the
complaint had been voluntarily dismissed with prejudice and judgment had already been
entered. See Lighting World, 382 F.3d at 1366-67 (finding that since the issue had not
been litigated prior to judgment, “the district court was justified in not requiring a full trial
on the issue of inequitable conduct as part of the attorney fee motion or in entering
detailed findings of fact and conclusions of law”). Moreover, it would be a waste of
judicial resources to force further litigation of the inequitable conduct issue because the
conditions of the dismissal order – i.e., the forfeiture of “all rights under the ‘970 and
‘603 Patents to sue Defendants for infringement” by Forcillo as well as “any assignee of
rights,” which was applicable to “any products that Defendants have manufactured,
05-1390 4
distributed, or sold in the past, or are manufacturing, distributing, or selling on the date
of this order” – essentially rendered the patents-in-suit unenforceable against LeMond,
the same relief it would have obtained had it proven its allegations.3
III. CONCLUSION
For the aforementioned reasons, we affirm the district court’s order denying
LeMond’s motion for attorney’s fees.
3
During oral argument, counsel for LeMond argued that these conditions do
not adequately protect against future lawsuits concerning any redesigned or improved
products developed after the date of the dismissal order. It does not follow, however,
that LeMond is entitled to an adjudication of the inequitable conduct issue on the merits
to eliminate the possibility of such lawsuits. Indeed, because counsel conceded that no
new products had been developed yet and the above-stated conditions otherwise
remove any reasonable apprehension of suit that may have existed, any claim for
declaratory relief now asserted by LeMond would be dismissed for lack of jurisdiction.
See 28 U.S.C. § 2201; Medimmune, Inc. v. Centocor, Inc., 409 F.3d 1376, 1379 (Fed.
Cir. 2005) (“When a potential infringer seeks declaratory relief in the absence of a
lawsuit by the patentee, there must be both (1) a reasonable apprehension on the part
of the declaratory judgment plaintiff that it will face an infringement suit; and (2) present
activity by the declaratory judgment plaintiff which could constitute infringement, or
concrete steps taken with the intent to conduct such activity.”); Super Sack Mfg. Corp. v.
Chase Packaging Corp., 57 F.3d 1054, 1058 (Fed. Cir. 1995) (noting that “a patentee
defending against an action for a declaratory judgment of invalidity can divest the trial
court of jurisdiction over the case by filing a covenant not to assert the patent at issue
against the putative infringer with respect to any of its past, present, or future acts”).
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