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Inc. v. Clair

United States District Court, M.D. Florida, Fort Myers Division

February 27, 2018

CHICO'S FAS, INC., a Florida corporation Plaintiff,
v.
ANDREA CLAIR, ANASTASIOS KOSKINAS and 1654754 ONTARIO, INC., Defendants.

          OPINION AND ORDER [1]

          SHERI POLSTER CHAPPELL UNITED STATES DISTRICT JUDGE.

Pending before the Court is United States Magistrate Judge Mac R. McCoy's Report and Recommendation. (Doc. 166). Judge McCoy recommends (1) denying Plaintiff Chico's FAS, Inc.'s Renewed Motion and Memorandum to Find this Case Exceptional and Award Chico's Reasonable Attorneys' Fees; but (2) granting in part Chico's request for costs against Defendants Andrea Clair, Anastasios Koskinas, and 1654754 Ontario, Inc. (Id.). Chico's objects only to Judge McCoy's recommendation to deny it attorneys' fees. (Doc. 167). Defendants have not responded to Chico's objection, and the time to do so has expired. For the following reasons, the Court overrules Chico's objection and adopts the Report and Recommendation.

         BACKGROUND

         Chico's request for attorneys' fees is the final chapter in this patent infringement suit. More than four years ago, Chico's asked this Court to declare that it had not infringed on Defendants' design and utility patents[2] for a camisole bra and that the patents were invalid. (Doc. 1; Doc. 4; Doc. 28). A year later, Chico's added a claim for inequitable conduct after it discovered that Clair and Koskinas supposedly did not alone invent the patented bra. (Doc. 59). The three-count Third Amended Complaint became the operative pleading. (Doc. 61).

         Both parties moved for summary judgment, which the Court granted in part. For Defendants, the Court found that Chico's had not produced evidence to render the patents unenforceable based on Clair's and Koskinas' alleged inequitable conduct. (Doc. 129). For Chico's, the Court invalidated the utility patents based on a prior art - i.e., another camisole bra - that existed in the market before Clair and Koskinas applied for the patents. (Doc. 128). It also found Beverly Johnson, a third-party seamstress, to be an inventor of the patented bra. (Id.). This finding was important because the patents did not name Johnson as an inventor and misnamed Koskinas as one.

         Almost immediately after the Court issued its decisions on summary judgment, Johnson assigned Chico's her rights to the patents. Because federal patent law does not allow a patent owner to sue a co-owner for infringement (absent consent), the Court dismissed Defendants' infringement counterclaims. (Doc. 138). The Court also dismissed Chico's other claims for the same reason. (Doc. 140).

         Defendants appealed to the United States Court of Appeals for the Federal Circuit but lost. Chico's Fas, Inc. v. Clair, 676 F. App'x 1006, 1007 (Fed. Cir. 2017). The Federal Circuit affirmed that Johnson was an inventor of the patents and that Koskinas was not. It also concluded that Johnson did not abandon her ownership rights in the patents and that Chico's acquired them. Consequently, the Federal Circuit remanded the case to this Court to correct investorship, which it did (Doc. 162). That Order ended the merit side of this case.

         All that remains now is Chico's request for attorneys' fees and costs. It seeks $454, 440.40 in attorneys' fees under 35 U.S.C. § 285 (Doc. 157) and $26, 148.65 in taxable costs (Doc. 158). Defendants, unsurprisingly, oppose the half-million dollar request for fees and costs. (Doc. 164). The Undersigned referred the matter to Magistrate Judge McCoy, who recommends denying attorneys' fees because this case is not “exceptional” under § 285. (Doc. 166). A dissatisfied Chico's objects to that recommendation.

         STANDARD OF REVIEW

         The district court may accept, reject, or modify, in whole or in part, the magistrate judge's report and recommendation. 28 U.S.C. § 636(b)(1). It reviews de novo any portion of a magistrate judge's report and recommendation to which a party has properly objected. Id. But “[w]hen no timely objection is filed, the court need only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.” Fed. R. Civ. P. 72's advisory committee's note (1983) (citations omitted).

         DISCUSSION

         Section 285 of the Patent Act authorizes a district court to award attorney's fees in patent litigation. It provides that “[t]he court in exceptional cases may award reasonable fees to the prevailing party.” 35 U.S.C. § 285. The Supreme Court's decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S.Ct. 1749 (2014) is the seminal case on the statute. It said that § 285 “imposes one and only one constraint on district court's discretion to award attorney's fees in patent litigation: The power is reserved for ‘exceptional' cases.” Id. at 1755-56. It explained,

an “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. District courts may determine whether a case is “exceptional” in the case-by-case exercise of their discretion, considering the totality of the circumstances. . . . [And] [t]here is no precise rule or formula for making these determinations, but instead equitable discretion should be exercised in light of the considerations we have identified.

Id. at 1756 (internal quotations, citations, and footnotes omitted). The party moving for an award of attorney's fees must show by a preponderance of the evidence that the case is exceptional. NXP B.V. v. Blackberry, ...


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