Palomar Technologies, Inc. v. MRSI Systems, LLC (18-cv-10236).

Palomar had asserted that MRSI infringed its 6,776,327 patent, which was directed to high-accuracy automated placement methods in which a workpiece is moved from a first position to an intermediate position, where the pathway to attach the first workpiece to a second workpiece is recalculated, improving the accuracy of the placement.  In May, MRSI was granted summary judgment that the patent claimed unpatentable abstract ideas, and entered judgment for MRSI.  Judge Saylor noted that, while the patent itself provides a description of systems and procedures to carry out the invention, the claims do not mention (and therefore do not cover) the robotics, computers or software that actually moves the component workpieces from one location to another.  He characterized the claims, boiled down, as claiming generally the notion that moving a part closer to a second part before installation makes it easier to obtain accuracy in the final placement of the part.  He analogized this to golf – it is very difficult to accurately put a small ball in a distant small hole, but by taking shots (drive, chip, etc.) that move the ball closer to the hole, the degree of difficulty is substantially reduced.  He further determined that the claims did not contain the necessary sufficiently inventive concept to save their eligibility under Alice.  He noted that the actual physical components used to carry out the method were described int eh specification as known and conventional.

Judge Saylor has now granted in part MRSI’s motion for costs and denied its motion for attorney’s fees.  He noted that, while there is a presumption favoring cost recovery for prevailing parties, an award of costs is at the discretion of the district court.  The types of costs that may be awarded are limited by 28 U.S.C. §1920 to fees of the clerk and marshall, fees for printed or electronically recorded transcripts necessarily obtained for use in the case; fees for printing and witnesses, and fees for exemplification and costs of making copies of materials where the copies were necessarily obtained for use in the case.  Judge Saylor awarded MRSI $29,120.97 of the $119,670.05 MRSI had sought.  He disallowed pro hac vice costs for seven attorneys, determining that Palomar should not be charged with MRSI’s decision to use out-of-state counsel.  He limited costs for private process servers to the fee that a marshall would have charged.  He disallowed additional costs for the expedition of hearing transcripts where no special circumstances were identified justifying such an award.  Costs related to videotaping of depositions were disallowed, as were all costs relating to depositions of MRSI’s own employees and expert witnesses.  While deposition transcript costs where the transcripts were neither entered into evidence nor relied upon in dispositive motion are generally not allowed, he did grant costs on the remaining transcripts, noting that these would almost certainly have been entered into evidence had the case gone to trial, and MRSI should not be punished for having prevailed on Alice grounds at summary judgment.  Finally, he disallowed considerable printing costs as not sufficiently justified in the motion for costs.

With respect to attorney’s fees, Judge Saylor determined that the case was not exceptional within the meaning of 35 U.S.C. § 285.  MRSI asserted that Palomar should have known that the patent was invalid pursuant to Alice, which had been decided at the time the complaint was filed.  Judge Saylor noted that MRSI’s early motion to dismiss on the same grounds had been denied (without prejudice), with the Court noting that the motion could not be decided without first undergoing claim construction, meaning that Palomar’s litigation position was not objectively unreasonable at the outset of the suit.  Judge Saylor further noted that even post-Markman, the patent was presumed to be valid and that the Alice framework is not so developed to render the outcome obvious.  Judge Saylor also declined to find Palomar’s litigation conduct unreasonable or exceptional.  While agreeing that Palomar’s manner of litigation – withholding of relevant discovery, gamesmanship in preparing witnesses for deposition, and abusive motion practice – he determined that, considering the totality of circumstances, the case was not exceptional.  He noted that MRSI itself contributed to the time and cost of the litigation through its handling of the case, including filing a largely fruitless IPR and forcing a three-day bench trial over staying the case for the IPR, and filing summary judgment motions on many other issues that ultimately did not impact the outcome of the case.

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