General Protecht Group, Inc. v. Leviton Manufacturing Co. (122 F. Supp. 3d 1114, 2015)

United States District Court for the District of New Mexico 2015-08-03

Judiciary and Judicial Procedure Title 85

Citations

Full opinion text

MEMORANDUM OPINION

JAMES O. BROWNING, District Judge. '

THIS MATTER comes before the Court on the Plaintiffs Motion for Finding Exceptional Case Under 85 U.S.C. § 285 and Award of Attorneys’ Fees, filed June 22, 2012 (Doc. 202)(“Motion”). The Court held a hearing on March 6, 2013. The primary issue is whether Defendant Levi-tón Manufácturing Co. should pay some or all of the Plaintiffs’ attorneys fees, which would require the Court to find that Levi-tón Manufacturing litigated so unreasonably or from such a weak position that the case is “exceptional” under 35 U.S.C. § 285. The Court concludes that (i) Levi-tón Manufacturing’s position" was incorrect but not exceptionally so; and' (ii) Levitón Manufacturing did not litigate in an excessively unreasonable manner by asserting its faulty position. Consequently, the Court concludes the case is not exceptional, and, thus, no attorneys’ fees are warranted. Nonetheless, the Court will consider the reasonableness of the Plaintiffs’ requested attorneys’ fees and find that, even if the Court had found the case exceptional, it would not have awarded fees for: (i) clerical or secretarial tasks that paralegals performed;' (ii) work performed relating to a separate trade dispute; (iii) three attorneys to attend- single depositions; or (iv) travel expenses to send an attorney to China:

FACTUAL BACKGROUND

General Protecht Group, Inc.- and Levi-tón Manufacturing build and sell- competing ground fault -circuit interrupter (“GFCI”) products.- See Leviton Mfg. Co. v. Nicor, Inc., 557 F.Supp.2d 1231, 1235 (D.N.M.2007); Leviton Mfg. Co. v. Nicor, Inc., No. CIV 04-0424, 2006 WL 4079129, at *1 (D.N.M. May 23, 2006); Memorandum at 7. GFCIs are safety devices that reduce the risk of electrocution. See Leviton Mfg. Co. v. Nicor, Inc., 2006 WL 4079129, at *1. General Protecht markets and sells GFCI products to 'United States distributors, including Plaintiffs Harbor Freight Tools USA, Inc., Central Purchasing, LLC, G-Techt Global Corp., SecurE-lectric Corp., and Warehouse-Lighting.com LLC. See Leviton Mfg. Co. v. Zhejiang Dongzheng Elec. Co., 506 F.Supp.2d 646, 648-49 (D.N.M.2007); Leviton Mfg. Co. v. Nicor, Inc., 557 F.Supp.2d at 1235; Memorandum at 7. General Protecht manufactures its GFCI products in China. See Leviton Mfg. Co. v. Zhejiang Dongzheng Elec. Co., 506 F.Supp.2d at 648-49; Memorandum at 7.

1. The Prior Actions,

In 2004 and 2005, Levitón Manufacturing asserted claims of patent infringement of U.S. Patent Nos. 6,246-,558 (“the-'558 Patent”) and 6,864,766 (“the '766 patent”) in the United States District Court for the District of New Mexico. See Memorandum at 8; Defendant Levitón Manufacturing Co.’s Memorandum of Law in Opposition to Plaintiffs’ Motion for Temporary Restraining Order and Preliminary Injunction at 3, filed November 12, 2010 (Doc. 18) (“Response”). In these actions, Levitón Manufacturing alleged that General Pro-techt, Harbor Freight, Central Purchasing, and Nicor, Inc. infringed Leviton’s '558 patent and '766 patent through them sale of GFCIs that General Protecht manufactured. See Leviton Mfg. Co. v. Nicor, Inc., Nos. CIV 04-0424 JB/RHS, CIV 04-1295 JB/ACT (D.N.M.); Leviton Mfg. Co. v. Zhejiang Dongzheng Elec., Co., No. CIV 05-0301 JB/DJS (D.N.M.). On March 5, 2007, the Court made a Markman . ruling, which adopted General Protecht, Harbor Freight, Nicor, Inc., and Central Purchasing’s construction of the terms “movable bridge,” “predetermined condition,” and “reset portion.” Leviton Mfg. Co. v. Zhejiang Dongzheng Elec. Co., 506 F.Supp.2d at 648. On July 10, 2007, the Court granted summary judgment of non-infringement to General Protecht, Harbor Freight, and Nicor, Inc. with respect to the 558 patent. See Leviton Mfg. Co. v. Nicor, Inc., 557 F.Supp.2d at 1235, 1250-51.

2. The CSA.

In October 2007, Levitón Manufacturing, General Protecht, Harbor Freight, Nicor, Inc., and Central Purchasing entered into a confidential settlement agreement (“CSA”) to resolve the patent infringement actions pending in the Court. See Memorandum at 9; Response at 3. The CSA included a covenant not to sue. The covenant stated:

2.1 Levitón ... hereby covenants not to sue (1) Defendants, their officers, directors, shareholders, members, employees, subsidiaries, or affiliates for alleged infringement of the '558 and/or '766 patents based on the Dongzheng products currently accused of infringement in the '558 and/or '766 actions; and (2) Defendants, their officers, directors, shareholders, members, employees, subsidiaries, or affiliates for alleged infringement of the '558 patent and/or the '766 patent with respect to an anticipated future new GFCI product that Defendant Dongzheng has indicated its intent to market in the U.S. in the future,....

2.2 The dismissals and covenant not to sue by Levitón in Article 2.1 shall also apply to Defendants’ customers of the Dongzheng Products including, but not limited to, Interline Brands, Inc., provided such customers do not seek to invalidate any claim of the '558 or '766 patents or seek to have those patents declared invalid or unenforceable through any presently existing or future court action or administrative filing.

CSA §§ 2.1, 2.2, at 4-5. The CSA also contained a section regarding the District of New Mexico’s '766 Markman order.

The parties will jointly request that the Court vacate its '766 Order in ... the Court’s Memorandum Opinion and Order dated March 5, 2007, by submitting a ¡joint motion and proposed form of Order to the Court— However, Levi-tón agrees not to challenge any proposed claim construction of a '766 patent claim that is reflected in the '.766 Markmcm Order, which any' of the Defendants, their officers, directors, shareholders, members, employees, subsidiaries, affiliates (or their customers) may propose in connection with any claim of infringement of a '766 patent claim. Defendants and their officers, directors, shareholders, members, employees, subsidiaries, affiliates (or their customers) are not precluded from proposing said claim construction in any action or proceeding asserting infringement of any patent related to the '766 patent, although Levitón may challenge such proposed claim construction. Levitón and defendants agree that neither the fact of the Court’s decision to vacate- or not vacate its '766 Markman Order, nor the fact that the parties requested that the Court vacate its '766 Markman Order, can be used by a party to this Agreement to support or challenge a proposed construction of a claim related to the '766 patent.

CSA § 4.1.

The CSA also contained a section entitled “Governing Law/Venue.” CSA § 11.2, at 11. This section states: “Any dispute between the Parties relating to or arising out of this [CSA] shall be prosecuted exclusively in the United States District Court for the District of New Mexico. The Parties, consent to the venue and jurisdiction of-such court fot this purpose.” CSA § 11.2, at 11.

3. Leviton’s'124 and '151 Patents.

After executing the CSA, Levitón Manufacturing secured two new patents — U.S. Patent Nos. 7,463,124 (“the '124 patent”) and 7,764,151 (“the '151 patent”). On December 9, 2008, the '124 patent issued from application no. 10/977,929 (“the '929 application”), which Levitón filed on October 28, 2004. See Response at 6; Memorandum at 10. The '151 patent issued on July 27, 2010 from application no. 12/176,-735 (“the .'735 application”), which Levitón Manufacturing filed on July 21, 2008. See Response at 7; Memorandum at 10. The '929 application was filed as a continuation of the '766 application. See Response at 6. The '735 application was filed as a continuation of the- '929 application. See Response at 7.

4. Actions Asserting Infringement of Leviton’s '124 and '151 Patents.

In September 2010, Levitón ■ Manufacturing filed patent infringement - eom-plaints with the International Trade Commission (“ITC”) and in the District Court for the Northern District of California, alleging that General Protecht, Techt, Sec-ureEléctric, ■ Warehouse-Lighting.com, Central Purchasing, Harbor Freight, and other, entities, infringed Levitón Manufacturing’s '124 and '151 patents. Response at 7; Memorandum at 14. In its ITC Complaint, Levitón Manufacturing asserts that six of General Protecht’s GFCI products infringe the '124 and '151 patents. See Declaration of Huaiyin Song ¶ 8, at 4-5 (executed Oct. 29, 2010), filed November 2, 2010 (Doc. 8)(“Song Decl.”); Amended Complaint Under Section 337 of the Tariff Act of 1930, as Amended at i-ii, 1-9, 26-46, filed November 3, 2010 (Doc. 10-1). Levitón Manufacturing’s complaints in the District Court for the Northern "District of California and in the ITC allege identical claims-of patent infringement. See Song Decl. ¶ 7, at 344; Levitón Manufacturing Co.’s First Amended Complaint for Patent Infringement and Trade Secret. Misappropriation, filed November 3, 2010 (Doc. 10-2). The Plaintiffs assert that the CSA licensed the six GFCI products that Levi-tón Manufacturing asserts infringe the '124 and '1511 patents. See Song Decl. ¶¶ 8-10, at 4-5. ■ Huaiyin Song, a manager in General Protecht’s Department of Technology Development and- Product Manufacturing, states that, of the General Protecht GFCI products that Levitón Manufacturing 1 currently accuses " the Plaintiffs' of infringing,’one of them is one of the same, products that Levitón Manufacturing accused the Plaintiffs of infringing in the previous litigation in the District of New Mexico. Song Decl. ¶ 10, at 4. He states that the other five products are, together, the “anticipated future new” product identified in § 2.1(2) of the CSA. Song Decl. ¶ 9, at 4. Levitón Manufacturing asserts that the ITC action is not limited to the six identified General Pro-techt products, because Levitón Manufacturing has a right, through discovery in the ITC action, to" assert that additional products infringe its patents. See Response at 8.

PROCEDURAL BACKGROUND

On October 28, 2010, the Plaintiffs filed their Complaint for Declaratory and In-junctive Relief. See Doc. 1 (“Complaint”). They assert ten Counts against Levitón Manufacturing: (i) Count I is a claim for declaratory judgment and injunctive relief, requesting a ruling from the Court that Levitón Manufacturing violated the CSA’s exclusive forum-selection provision; " (ii) Count II is a claim for declaratory judgment of non-infringement based on license or estoppel; (iii) Count III is a claim for declaratory judgment of non-infringement of the '124 patent; (iv) Count IV is a claim for declaratory judgment of non-infringement of the '151 patent; (v) Count V is a claim for declaratory judgment of invalidity of the '124 patent; (vi) Count VI is a claim for declaratory judgment of invalidity of the '151 patent; (vii) Count VII is a claim for declaratory judgment of invalidity of the '124 and '151 patents because of prosecution laches; (viii) Count VIII is a claim for declaratory judgment of inequitable conduct with respect to the '124 and '151 patents; (ix) Count IX is a claim for attorneys’ fees on the ground that this case is an “exceptional case” under 28 U.S.C. § 285; and (x) Count X is a claim for breach of contract. Complaint ¶¶ 40-116, at 9-23. Levitón Manufacturing asserts three counterclaims against the Plaintiffs: (i) Counterclaim I is for infringement of the '124 patent; (ii) Counterclaim II is for infringement of the '151 patent; and (iii) Counterclaim III is a claim for trade-secret misappropriation under Georgia Code §§ 10-1-763. through 64. See Defendant Levitón Manufacturing Co. Inc.’s Answer, Defenses, and Counterclaims to" Complaint for Declaratory and Injunctive Relief at 19-25, filed December 15, 2010 (Doc. 59)(“Answer”). Levitón Manufacturing asserts Counterclaim III against GPG only. See Answer ¶¶ 162-73, at 22-24.

The Court issued a Memorandum Opinion and Order, 2010'WL 5559750 (Doc. 41)(“Nov. 30, 2010 MOO”) on the Plaintiffs’ Motion for Temporary Restraining Order and Preliminary Injunction, filed November 2, 2010 (Doc. 5), granting the Plaintiffs’ request for a preliminary injunction. The Court enjoined Levitón Manufacturing to take all actions necessary to secure dismissal of all claims of patent infringement asserted against the Plaintiffs in the ITC action and the action in the Northern District of California. See Nov. 30, 2010 MOO at 46. The Plaintiffs also requested a temporary restraining order compelling Levitón Manufacturing to stay the ITC action, but the Court denied that requested ruling, finding it unnecessary in light of the 'Court’s granting of the preliminary injunction. See Nov. 30, 2010 MOO at 46. On December 8, 2010, Levitón Manufacturing filed a Notice of Appeal, appealing the Court’s grant. of -the, preliminary injunction to the United States Court of Appeals for the Federal-Circuit. See Notice of Appeal at 1, filed December 8,- 2010 (Doe. 53). On July 8, 2011, the Federal Circuit issued a Judgment affirming the Court’s grant of the preliminary injunction. See Judgment at 1, filed October 5, 2011 (Doc. 146).

In early 2011, General Protecht moved to dismiss Levitón Manufacturing’s trade-secret claim for lack of subject-matter jurisdiction. See GPG’s Motion to Dismiss Leviton’s Trade Secret Misappropriation Counterclaim for Lack of Jurisdiction at 1, filed January 10, 2011 (Doc. 73)(“GPG’s MTD”). General Protecht asserts that there is no common nucleus of fact between the federal causes of action relating to patent infringement, over which the Court has original subject-matter jurisdiction under 28 U.S.C.' § 1331, and the trade-secret counterclaim Levitón Manufacturing asserts against General Protecht. See Memorandum in Support of GPG’s Motion 'to Dismiss Leviton’s Trade Secret Misappropriation Counterclaim for Lack óf Subject Matter Jurisdiction at 1-3, filed January 10, 2011 (Doc. 74)(“GPG’s MTD Memo.”). It notes that the Court has only supplemental jurisdiction over the trade-secret claim. See GPG’s MTD Memo, at 3. General Protecht asserts that diversity jurisdiction does not exist in this case, because some Plaintiffs and the Defendant share citizenship, thus destroying complete diversity. See GPG’s MTD Memo, at 3. General Protecht asserts that the dispute underlying the trade-secret claim is not so related as to be part of the same case or controversy as the dispute underlying the patent claims. See GPG’s MTD Memo, at 3-4. General Protecht argues that, even if supplemental jurisdiction exists over the trade-secret claim, the Court should decline to exercise supplemental jurisdiction over that claim. See GPG’s MTD Memo, at 4-6.,

, On November 3, 2011, Levitón Manufacturing filed its response to General. Pro-techt’s motion to dismiss. See Leviton’s Memorandum of Law in Opposition to GPG’s Motion to Dismiss Leviton’s Trade Secret Counterclaim for Lack of Subject Matter Jurisdiction (Doc. 150) (“Response to GPG’s MTD”). It asserts that its trade-secret counterclaim arises out of the same common nucleus of operative fact as the patent dispute. See Response to GPG’s MTD at 1. It contends that “[t]he trade secret counterclaim involves GPG’s efforts to misappropriate Leviton’s trade secrets, including those related to ground fault circuit interrupters (‘GFCIs’), the same type of products at - issue in .the patent claims and counterclaims.” Response to GPG’s MTD at 1. Levitón Manufacturing notes that “[t]he trade secret misappropriation occurred in 2008, before the ink was dry on the October 2007 Settlement Agreement that forms the basis of the,of [sic], GPG’s breach of contract claim.” Response to GPG’s MTD at 1-2. Levitón Manufacturing argues that there will be “substantial factual overlap” between the trade-secret claim and the patent claims. Response to GPG’s MTD at 1. Levitón Manufacturing contends that exercising supplemental jurisdiction over the trade-secret claim is appropriate. See Response to GPG’s MTD at 5-8. Levitón does not, however, raise any argument that diversity jurisdiction is present over its trade-secret claim. See Response to GPG’s MTD at 1-8; Answer ¶¶ 132-33, at 15. General Pro-techt filed its reply brief on November 21, 2011. See Reply Brief in Support of GPG’s Motion to Dismiss Leviton’s Trade Secret Misappropriation Counterclaim for Lack of Subject Matter Jurisdiction (Doc. 151).

In October of 2011, Levitón Manufacturing filed a motion to dismiss. See Defendant Levitón Manufacturing Co., Ine.’s Motion to Dismiss Patent Claims and Counterclaims at 1, filed October 11, 2011 (Doc. 144)(“Leviton’s MTD”). Levitón Manufacturing asks the Court to enter “an order dismissing its First and Second Counterclaims” for patent infringement with prejudice. Levitón Manufacturing Co., Ine.’s Memorandum of Law in Support of Its Motion to Dismiss Patent Claims and Counterclaims at 1, filed October 11, 2011 (Doc. 145)(“Leviton’s MTD Memo.”). It argues that “[t]he dismissal of its Patent Counterclaims with prejudice by Levitón coupled with the this [sic] Court’s decision, as affirmed by the” Federal Circuit’s decision, that the “Plaintiffs have an implied license to the '124 and '151 patents for the products currently at issue, render moot both the Patent Counterclaims and Patent Claims.” Leviton’s MTD Memo, at 1-2 (footnote omitted). It contends that the Court should dismiss Counts II through VIII as moot. See Leviton’s MTD Memo, at 2-5. Levitón Manufacturing asserts that, once it dismisses its patent counterclaims, there will “no longer [be] a ‘substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.’ ” Leviton’s MTD Memo.' at 3-4 (quoting MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 126, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007)). It contends that the Federal-Circuit has recognized that “a covenant not to sue already exists” in the parties’ earlier settlement agreement and that, thus, the case is now moot. Leviton’s MTD Memo, at 4,

On November-3, 2011, the Plaintiffs responded to Leviton’s MTD. See Plaintiffs’ Response to Leviton’s Motion to Dismiss Patent Claims and Counterclaims (Doc. 149) (“Response -to Leviton’s MTD”). The “Plaintiffs agree that Leviton’s infringement counterclaims should be dismissed with prejudice,” and they- also consent to dismissal of Counts III and IV without prejudice. Response to Leviton’s MTD at 1. They oppose dismissal of the remaining Counts that they have asserted against Levitón Manufacturing. See Response to Leviton’s MTD at 1. They assert that, rather than dismiss Count II as moot, the Court should enter judgment in favor of the Plaintiffs on Count II based on the Federal Circuit’s finding that the Plaintiffs have an implied license to the '124 and '151 patents for the products described in the parties’ settlement < agreement. S.ee Response to Leviton’s MTD at 3. The Plaintiffs recognize, however, that “the Federal Circuit’s opinion was technically only affirming this Court’s grant of a preliminary injunction.” Response to Levi-ton’s MTD at 3. They also assert that, even if Levitón Manufacturing dismisses its patent-infringement claims with prejudice, their claims ■ asserting that Levitón Manufacturing’s patents are unenforceable and/or invalid are not moot. See Response to Leviton’s MTD at 4-5, 9-13. The Plaintiffs contend that Leviton’s argument that a covenant not to sue makes this dispute moot is not persuasive given that “Levitón did not offer a covenant, not to sue during the litigation.” Response to Leviton’s MTD at 6. They argue that, “[i]nstead[,] there has been an adjudication of non-infringement based on implied license, and it is only the adjudicated finding of non-infringement — not any voluntary change of position prior to adjudication — that prevents Levitón from pursuing its infringement claims against Plaintiffs.” Response to Leviton’s MTD at 6 (emphasis in original). The Plaintiffs also argue that, “[e]ven if the Court were to agree with Levitón that Plaintiffs’ invalidity and unen-forceability claims are moot, the Court retains subject matter jurisdiction to decide Plaintiffs’ unenforceability claims based on Plaintiffs’ claim for attorneys’ fees under § 285.” Response to Leviton’s MTD at 13.

On November 21, 2011, Levitón Manufacturing filed its reply brief to the Response to Leviton’s MTD. See Leviton’s Reply to Plaintiffs’ Opposition to Leviton’s Motion to Dismiss Patent Claims and Counterclaims (Doc. 154)(“Reply to Response to Leviton’s MTD”). It asserts that, even if the Court can exercise jurisdiction over the remaining patent claims in the Plaintiffs’ declaratory judgment action, it should decline to do so. See Reply to Response to Leviton’s MTD at 7-10. On November 30, 2011, the Plaintiffs filed a surreply brief. See Plaintiffs’ Surreply Brief in Opposition to Leviton’s Motion to Dismiss Patent Claims and Counterclaims (Doc. 158-l)(“Surreply”). The Plaintiffs argue that the Federal Circuit’s “finding of implied license renders the infringement issue fully litigated.” Surreply at 2.

On. January 18, 2012, Harbor Freight and Central Purchasing informed the Court that, in contradiction to their earlier position, they now consent “to the dismissal of Counts III-VIII as they apply to” them, “so long as the dismissal is” without prejudice. Letter to the Court from Mark J. Rosenberg at 1 (dated Jan. 18, 2012), filed January 17, 2012 (Doc. 165). On February 14, 2012, the remaining Plaintiffs, .besides Harbor Freight and Central Purchasing, informed the Court that .they are “willing to consent to dismissal of Counts III through VIII” if dismissal is without prejudice. Letter to the Court from William F. Long at 1 (dated February 14, 2012), filed February 14, 2012 (Doc. 168).

At the hearing on February 16, 2012, the Court inquired whether considerations of fairness and efficiency have any bearing on its determination whether it has supplemental jurisdiction over the trade-secret claim. See Transcript of Hearing at 13:11-15 (taken Feb. 16, 2012)(Court)(“Feb. 16, 2012 Tr.”). Levi-tón Manufacturing acknowledged that the Court must first decide whether it has supplemental jurisdiction over the claim and then it can decide whether it will choose to exercise supplemental jurisdiction over that claim. See Feb. 16, 2012 Tr. at 13:16-19 (Shatzer). Levitón Manufac-taring asserted that its trade-secret claim shares the most facts in common with the patent-infringement claims it has asserted against the Plaintiffs and with the- Plaintiffs’ claims of non-infringement., See Feb. 16, 2012 Tr. at 14:19-15:2 (Court, Shatzer). The Plaintiffs acknowledged that .the Court is competent, to handle the trade-secret claim, .but emphasized that the Court has no jurisdiction to hear that claim. See Feb. 16, 2012 Tr. at 15:25-16:7 (Long). The Plaintiffs asserted" that the alleged misappropriation of the trade secrets took place at least in part in Georgia and that the alleged injury occurred in New York. See Feb. 16,2012 Tr. at 16:9-18 (Court, Long). Levitón Manufacturing noted that it would have the same expert testify regarding damages for each of its counterclaims.- See Féb. 16, 2012 Tr. ‘at 21:9-22:16 (Shatzer).

During a discussion of Levitan’s MTD Memo., Levitan asserted that the Court should not1 state whether the dismissal of the claims to which the parties ' have agreed to dismissal is with dr without prejudice, but should state instead that it will dismiss the claims for lack- of subject-matter jurisdiction based on the lack of a case or controversy. See Feb. 16, .2012 Tr. at 26:10-22 (Shatzer). The Plaintiffs argued that, rather than agreeing with Levitan that the claims they have asserted in Counts III through VIII are moot, they have chosen not to oppose Levitan’s MTD Memo, seeking dismissal of those claims as long as dismissal is without prejudice. See Feb. 16, 2012 Tr. at 28:8-10 (Long). The Plaintiffs argued that, because a dismissal for lack of subject-matter jurisdiction is, under rule 41(b) of the Federal Rules of Civil Procedure, without prejudice, the Court" does not need to specify whether the dismissal is with or without prejudice.. See Feb. 16, 2012 Tr. at 28:16-20 (Long).' The Court inquired whether the parties would find it acceptable for the Court to dismiss the claims asserted in Counts III through VIII for lack.of subject-matter jurisdiction without mentioning whether the dismissal is with or without prejudice. See Feb, 16, 2012 Tr. at 30:8-5 (Court). Levitón- Manufacturing asserted that it was amenable to this proposal. See Feb. 16, 2012 Tr. at 30:6-7 (Shatzer). The Plaintiffs stated that this proposal was acceptable given that the dismissal would ultimately be without prejudice, but noted that they are having trouble understanding why Levitan Manufacturing would not agree to the order stating the dismissal is without prejudice. See Feb. 16, 2012 Tr. at 30:8-12 (Long); id. at 31:20-32:3 (Long).

Levitan Manufacturing asserted that entering judgment in favor of the Plaintiffs on Count II is not appropriate given that the Federal Circuit’s decision was a ruling on an appeal of á preliminary junction as opposed to a dispositive motion. See Feb. 16, 2012 Tr. at 32:13-33:18 (Shatzer). Levitan Manufacturing argued that, instead, dismissal of Count II as moot is appropriate in light of its agreement to dismiss its patent counterclaims with prejudice. See Feb. 16, 2012 Tr. at 32:13-33:18 (Shatzer). The Plaintiffs explained that they had previously believed, based on Levitan Manufacturing’s briefing, that it had conceded that "entry" of judgment in the Plaintiffs’ favor was appropriate for Count II. See Feb. 16, 2012 Tr. at 35:9-20 (Long). The Plaintiffs related that, in light of Levitón Manufacturing’s clarification of its position at the hearing, they planned to file a motion for summary judgment if the Court denies Levitan’s MTD Memo.’ See Feb. 16, 2012 Tr. at 35:9-20 (Long). The Plaintiffs asserted that they read certain statements in Levitan Manufacturing’s briefing as admissions that the Plaintiffs have an implied license regarding the '124 and '151 patents, but noted that those statements may not have been intended as admissions. See Feb. 16, 2012 Tr, at 36:6-25 (Long).

Levitón Manufacturing argued that Count II, a claim seeking a declaration of non-infringement, is now moot, given that Levitón Manufacturing has agreed to dismiss with prejudice its infringement claims based on those same patents. See Feb, 16, 2012 Tr. at 37:9-38:7 (Shatzer). Levitón Manufacturing contended that, to the extent that the question whether the Plaintiffs have an implied license regarding the '124 and T51 patents is a question of law, it does not intend to contest that the Plaintiffs have an implied license in light of the Federal Circuit’s opinion ruling on the preliminary injunction. See Feb. 16, 2012 Tr. at 41:20-42:4 (Shatzer). It- argued that any dispute regarding the scope of that license is now moot in light -of its agreement to dismiss its patent-infringement claims with prejudice. See Feb. 16, 2012 Tr. at 42:1-4 (Shatzer). Levitón Manufacturing reiterated that entering judgment based on holdings in the Federal Circuit’s decision affirming the grant of a preliminary injunction would not be appropriate. See Feb. 16, 2012 Tr. at 42:9-12 (Shatzer). The Plaintiffs responded that Levitón Manufacturing is trying , to avoid an adverse judgment against it and that there is still an ongoing dispute. See Feb. 16, 2012 Tr. at 43:11-16 (Long). Levitón Manufacturing argued that the Plaintiffs are seeking to litigate the implied license’s scope in case they intend to bring other products to the market in the future and that any decision the Court renders would be an advisory opinion. See Feb. 16, 2012 Tr. at 43:17-44:3" (Shatzer). The Plaintiffs asserted that they want as much clarity as possible on the resolution of the current dispute before the Court to avoid future litigation and to avoid Levitón Manufacturing in the future saying that the Plaintiffs do not have an implied license because that issue has not been decided. See Feb. 16; 2012 Tr. at 44:4-45:5 (Long).

Following" the February 16, 2012 hearing, the Plaintiffs filed a separate motion for summary judgment in which they sought summary judgment in their favor on Counts I and II. See Plaintiffs’ Motion for . Summary Judgment that- Levitón Breached its Implied License at 1, filed March 8,- 2012 - (Doe. 171)(“Plaintiffs’ MSJ”). Later that month, Levitón Manufacturing filed- a cross-motion- for summary judgment on Counts I and II. See Levi-ton’s Memorandum of Law in Opposition to Plaintiffs’- Motion -for Summary Judgment that Levitón Breached its Implied License, filed March 26, 2012 (Doc. 182)(“Leviton’s MSJ”).

On May 12, 2012, 2012 WL 1684573, the Court issued á Memorandum Opinion and Order (Doc. 193)(“May 12, 2012 MOO”) on several motions: (i) QPG’s MTD; (ii) Levi-ton’s MTD; (iii) the Plaintiffs’ MSJ; and (iv) Leviton’s MSJ. The Court granted GPG’s MTD, dismissing Leviton’s Counterclaim III. See May 12, 2012 MOO at 2. The Court also partially granted Leviton’s MTD, dismissing Counterclaims I and II with prejudice. ' See May 12, 2012 MOO at 2. With Counterclaims'I and II dismissed, the Court dismissed Count II as moot. See May 12, 2012 MOO at 2. The Court declined to exercise supplemental jurisdiction over the remaining state-law claims— Counts I and X.' See May 12, 2012 MOO at 2. With Count II moot and the Court declining supplemental jurisdiction over Count I, the Court denied both parties’ MSJs as moot. See May" 12, 2012 MOO at 2. The Court retained jurisdiction, however, over the question of attorneys’ fees under 35 U.S.C. § 285. See May 12, 2012 MOO at 2. The Court entered a final judgment on May 14, 2012. See Final Judg; ment at 2, filed May. 14, 2012 (Doc. Í94).

On June 22, 2012, the Plaintiffs filed a Brief in Support of Motion for Finding of Exceptional Case Under 35 U.S.C. § 285 and Award of Attorneys’ Fees, filed June 22, 2012 (Doc.' 203)(“Plaintiffs’ Exceptional Case Brief’). It asserts that this case is exceptional under § 285, because Levitón Manufacturing “failed to abide by the express and implied terms of the Settlement Agreement and ... filed baseless infringement claims in improper forums and asserted baseless counter claims before this Court.” Plaintiffs’ Exceptional Case Brief at 2.

The Plaintiffs argue this case is an exceptional one, because Levitón Manufacturing acted in “[b]ad [f]aith” by: (i) filing suits against the Plaintiffs in forums other than the District of New Mexico, in breach of the CSA; and (ii) asserting patent infringement counterclaim for licensed patents. Plaintiffs’ Exceptional Case Brief at 8-9. The Plaintiffs contend that “Levi-ton’s bad faith disregard of the terms of the [CSA] effectively forced the Plaintiffs to commence this action for declaratory judgment and move for preliminary injunction.” Plaintiffs’ Exceptional Case Brief at 9.

The Plaintiffs argue that courts can infer bad faith “[w]hen the patentee is manifestly unreasonable in assessing the infringement, while continuing to assert infringement in court, whether grounded in or denominated wrongful intent, recklessness, or gross negligence.” Plaintiffs’ Exceptional Case Brief at 10 (quoting Phonometrics, Inc. v. Westin Hotel Co., 350 F.3d 1242, 1246 (Fed.Cir.2003))(internal quotations omitted). Similarly, according to the Plaintiffs, Levitón Manufacturing “was grossly negligent in asserting its infringement claims and counterclaims,” because, “[g]iven the well-established law regarding implied licenses, had Levitón conducted any research on the issue before commencing its litigation strategy, it would have known that the Settlement Agreement granted GPG and Habor Freight an implied license.” Plaintiffs’ Exceptional Case Brief at 11. The Plaintiffs- contend that “the question of infringement was not close because, as this court and the Federal Circuit affirmed, the patents-in-suit were covered by an implied license that Levitón granted to the Plaintiffs through the Settlement Agreement.” Plaintiffs’ Exceptional Case Brief at 10.

The Plaintiffs assert they are the “prevailing party” under 35 U.S.C. § 285 because: (i) the Court granted their requested injunction against Levitón; and (ii) Levitón ultimately dismissed its patent infringement counterclaims against the Plaintiffs “with prejudice and without any agreement that the parties would bear their respective attorneys’ fees.” Plaintiffs’ Exceptional Case Brief at 7.

' The Plaintiffs argue that they are entitled to the attorneys’ fees they accrued defending Levitón Manufacturing’s appeal of the Court’s preliminary injunction. See Plaintiffs’ Exceptional Case Brief at 12. The Plaintiffs argue that Levitón Manufacturing “conducted a ‘scorched earth’ strategy for [its] appeal, when it should have simply complied with the injunction.” Plaintiffs’ Exceptional Case Brief at 12. They contend that, instead, Levitón Manufacturing appealed to the Federal Circuit “despite the clear contract provisions and the clear law establishing the implied license,” moved both the Court and the Federal Circuit to stay the injunction pending appeal, sought amicus support, and requested en banc rehearing after the Federal Circuit affirmed fhe injunction. Plaintiffs’ Exceptional Case Brief at 12. They further argue that “[e]ach of Levi-ton’s actions required a response from the Plaintiffs; indeed the Federal Circuit ordered the Plaintiffs to respond to Leviton’s petition for rehearing en banc.” Plaintiffs’ Exceptional Case Brief at 12.

General Protecht seeks $1,047,155.95 in attorneys’ fees and related expenses. See Plaintiffs’ Exceptional Case Brief at 12. Harbor Freight seeks $181,568.82. See Plaintiffs’ Exceptional Case Brief at 13. Both General Protecht and Harbor Freight submitted invoices detailing attorneys’ fees, billing rates, time expended, and descriptions of work performed. See Plaintiffs’ Exceptional Case Brief at 13. GPG and Harbor Freight also submitted “documentation supporting the reasonableness” of each attorney’s hourly rate. Plaintiffs’ Exceptional Case Brief at 13. The requested amounts include fees that the attorneys have incurred-but the clients have not yet paid, costs non-lawyer .personnel accrued, and out-of-pocket disbursements, all of which the Plaintiffs contend are recoverable under 35 U.S.C. § 285. See Plaintiffs’ Exceptional Case Brief at 14-15. The Plaintiffs assert that “these rates and times should be used by the Court as the lodestar amount to calculate reasonable attorney’s fees.” Plaintiffs’ Exceptional Case Brief at 15.

Less than a month later, Levitón Manufacturing filed its Memorandum of Law in Opposition to Plaintiffs’ Motion for Finding of Exceptional Case Under 35 U.S.C'. § 285 and Award of Attorneys’ Fees and Motion to Tax Costs, filed July 16, 2012 (Doc. 213)(“ECB Response”). It contends that “[n]othing about this case was exceptional ... [,][and] every objective factor indicates that this case involved a non-frivolous dispute and that Levitón acted reasonably and with the aim of resolving the dispute as efficiently as possible.” ECB Response at 1. Should the Court choose to award attorneys’ fees, Levitón Manufacturing contends that the Plaintiffs have requested payment of fees “to which they are not entitled ...[,] including] fees and costs for time spent on paralegals performing tasks secretarial in nature and for claims not within the scope of 35 U.S.C. § 285.” ECB Response at 1.

Levitón Manufacturing asserts that it did not act in bad faith to avoid the Court’s jurisdiction. See ECB Response at 3. Lev-itón Manufacturing represents that it chose the ITC “for the unique relief available from that venue” and filed in the Northern District of California because “it provided the only venue where there was [personal] jurisdiction over all twenty-nine named parties.” ECB Response at 3. Moreover, “[i]t was also Leviton’s belief at the time that since the patents in -issue were excluded from the Settlement Agreement the forum selection clause was not an issue.” ECB Response at 3.

Levitón Manufacturing contends that it did not engage in any misconduct or vexatious litigation; rather, it “advanced [only] non-frivolous arguments and acted professionally and ethically at every step.” ECB Response at 9. Levitón Manufacturing notes that “[s]imply losing ... does not mean that engaging in the litigation was unreasonable.” ECB Response at 10. Contrary to the Plaintiffs’ assertion that the law regarding implied licenses is so well-established that Levitón should have anticipated the case’s outcome, Levitón Manufacturing contends that “judicially implied licenses are rare under any doctrine.” ECB Response at 10 (quoting Wang Labs., Inc. v. Mitsubishi Elecs. Am., Inc., 103 F.3d 1571, 1581 (Fed.Cir. 1997)). Furthermore, Levitón Manufacturing asserts that “[i]nfringement is often difficult to determine, and a patentee’s ultimately incorrect view of how a court will find does not of itself establish bad faith.” ECB Response at 10 (quoting Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378, 1381 (Fed.Cir.2005))(internal quotation marks omitted). Levitón Manufacturing-contends that “the question of infringement was close because there was substantial and reasonable disagreement as to whether an implied license existed.” ECB Response at 12. Levitón Manufacturing argues that “this Court’s lengthy opinion and the precedential Federal Circuit Opinion that came as a result of Leviton’s appeal” demonstrate that “this case was subject to reasonable dispute.” ECB Response at 10. Additionally, Levi-tón Manufacturing disputes the Plaintiffs’ argument that TransCore LP v. Elec. Transaction Consultants, Corp., 563 F.3d 1271 (Fed. Cir.2009) (“TransCore”), set clear precedent, describing it as “a recently decided case that has not been explained or. clarified 'in subsequent precedent.” ECB Response at 12.

Levitón Manufacturing also contends that it “acted carefully and with a goal of resolving this dispute as efficiently as possible,” promptly complying with the preliminary injunction and dismissing its patent counterclaims once the Federal Circuit’s decision was final. ECB Response . at 11. Levitón. Manufacturing contends it also cooperated with the Plaintiffs to .create a Joint Status Report and Provisional Discovery Plan, and “[t]he only discovery dispute that needed to be brought to the Court’s attention ... was resolved in Leviton’s favor.” ECB Response at 11. Levitón Manufacturing asserts that “[njothing suggests [it] tried to impose unnecessary cost or burdens on Plaintiffs, [or] engage in fraud or material misrepresentations.” ECB Response at 11.

■ Levitón Manufacturing notes that not all Plaintiffs could assert a defense based on an implied license. See ECB Response at 11. Levitón Manufacturing argues that “the fact that the crux of Plaintiffs’ arguments, the existence of an implied license, did not extend to all [of Leviton’s] infringement allegations before this Court further undermines any suggestion that Leviton’s position was objectively baseless.” ECB Response at 12,

Levitón argues - that' the Court has already indicated it does not consider the litigation baseless. See ECB Response at 14. For instance, Levitón Manufacturing notes that the Court wrote that “[n]o New Mexico Court or Tenth Circuit court has addressed whether a forum selection clause applies to actions where the contract containing the forum selection clause is raised only as a defense.” ECB Response at 14 (quoting Nov. 30, 2010 MOO at 34)(internal quotation marks omitted). Additionally, Levitón Manufacturing argues that, when the .Court found that “the best construction” of the Settlement Agreement is that it establishes an implied license to the '124 and '151 patents, the Court implicitly acknowledged that the Settlement Agreement may- allow for other constructions. ECB Response at 14 (quoting Nov. 30, 2010 MOO)(internal quotation marks omitted). Finally, Levitón Manufacturing argues that the “Court’s-lengthy opinion[,] followed by Oral argument and a precedential opinion at the Federal Circuit[,] suggest that this case is far from frivolous, ie., objectively baseless.” ECB Response at 14.

Levitón Manufacturing argues that it did not act with subjective bad faith, because “Levitón understood [the] [Settlement Agreement’s] language to apply only to the '558 and '766 patents [and not] to any other patents existing at the time or that might issue in the future.” ECB Response at 15 (quoting Declaration of Meir Y. Blonder in Support of Defendant Levitón Manufacturing Co., Inc.’s Opposition to Plaintiffs Motion for Temporary Restraining Order and Preliminary Injunction (executed Nov. 5, 2010), filed on Nov. 12,2012 (Doc. 20)(“Blonder Deel.”)).

Levitón Manufacturing contends that, even if the Court rules that this case is exceptional, an award of attorneys’ fees is not warranted, because “none of the relevant factors, such as ‘the closeness of the case, the tactics of counsel, the flagrant or good faith character of the parties’ conduct, and any other factors contributing to imposition of punitive sanctions or to.fair allocation of the burdens-of litigation,’ warrants a fees award.” ECB Response at 15 (quoting Delta-X Corp. v. Baker Hughes Prod. Tools, Inc., 984 F.2d 410, 414 (Fed. Cir.1993)). Levitón Manufacturing contends that, in any ease, the prevailing party has an obligation to “make a good faith effort to exclude from a fee request hours that are excessive, rédundant, or otherwise unnecessary,” ECB Response at 16 (quoting Hensley v. Eckerhart, 461 U.S. 424, 434, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983) (“Hensley”)), and that the “Plaintiffs have made little, if any, effort to comply with these obligations,” ECB Response at 16. Levitón Manufacturing. identifies several fees and costs that it contends are not within the scope of .recovery ■ under 35 U.S.C. § 285. See. ECB Response, at 16. These excessive fees and costs include: (i) fees relating. to the trade secret claim, which “this Court expressly found- ... w[ere] not related to the patent claim,” ECB Response at 16; (ii) fees related to the ITC action, “which is outside the jurisdiction of this Court,” ECB Response at 16; (iii) fees accrued during the appeal to the Federal Circuit, because the Plaintiffs have not established that the appeal itself was exceptional, see ECB Response at 18-19; (iv) paralegal fees, because those are recoverable only to the extent that the paralegal is performing work that an attorney would traditionally do, and, according to Levitón Manufacturing, the Plaintiffs’ invoices fail to demonstrate that the work satisfies this standard; see -ECB Response at 20-21; and (v) other excessive expenses, including fees for three attorneys at single depositions, excessive discussions about hiring an interpreter, and travel expenses “for their lead counsel to travel to China and participate in a press conference,” ECB . Response at 21. Levitón ¡Manufacturing also notes. that its litigation fees were less than half of the Plaintiffs’ fees. See ECB Response at 21. Levitón Manufacturing argues that, because the Plaintiffs have “failed to comply with [their]obligation to eliminate unrecoverable and unreasonable fees and expenses,” the Court should deny the Plaintiffs’ fee requests entirely. ECB Response at' 17. Should the Court award attorneys’ fees anyway, however, Levitón Manufacturing argues that the Court should exclude the improperly requested fees and expenses, which Levitón Manufacturing calculates to a total of $243,975.73. See ECB Response at 17-18.

The Plaintiffs replied to the ECB Response two weeks later, Se'e Reply in Support of Motion for Finding of Exceptional Case Under 35 U.S.C. § 285 and Award of Attorneys’ Fees and Motion to Tax ¡Costs, filed August 2, 2012 (Doc. 220)(“Plaintiffs’ Reply ECB”). The Plaintiffs argue that “[t]his case is exceptional for two reasons: (1) Levitoii’s frivolous assertion that this Court did 'not have jurisdiction over its patent infringement claims, and (2) Leviton’s insistence on continuing the litigation once it had lost at both the District Court and Federal Circuit.” Plaintiffs’ Reply ECB at 1. The Plaintiffs argue that, “[e]ven if Levitón had' a good-faith, belief that tlie. Settlement Agreement, did not cover the '124 and T51 patents, it knew, .or should have known, that Plaintiffs would assert the Settlement Agreement as a defense, thereby necessitating that Leviton’s action be filed in . this Court.” Plaintiffs’ Reply ECB at 2. Furthermore, the Plaintiffs argue that Levitón Manufacturing’s stated reasons for filing in the ITC and Northern District of California are unpersuasive, because: (i) “[a]ny remedy available from the ITC is'available from this Court;” and (ii) “Leviton’s desire to sue additional parties does not justify ignoring the exclusive venue provision to which it had already agreed.” Plaintiffs’ Reply EBG at 2-3. The Plaintiffs argue that the Court “should take into account Leviton’s improper forum shopping when determining whether this case is exceptional, as Leviton’s efforts to avoid this Court’s jurisdiction is ‘an important predicate to understanding and evaluating [Lev-itón Manufacturing’s] litigation misconduct.’ ” Plaintiffs’ Reply ECB at 3 (quoting Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004, 1027 (Fed.Cir.2008)).

Additionally, the Plaintiffs argue that “Levitón prolonged these proceedings unnecessarily at every stage, thereby increasing Plaintiffs [sic] fees and expenses” by seeking a stay in the injunction, appealing to the Federal Circuit, seeking another stay, and attempting to recruit several am-ici. Plaintiffs’ Reply ECB at 3. The Plaintiffs assert that “[e]very effort by Levitón to prolong these proceedings necessitated a response. from Plaintiffs, thereby increasing Plaintiffs’ fees and costs.” Plaintiffs’ Reply ECB at 3.

The Plaintiffs contend that, “although Leviton’s counterclaims may not have been frivolous when originally asserted, [they] became frivolous, at the very'least, after the Federal Circuit affirmed this Court’s' decision— Levitón should have dropped its appeal and its counterclaims at that point rather than seeking an en banc review.” Plaintiffs’ Reply ECB at 3. The Plaintiffs contend that; “[w]hen viewed in isolation, it might appear that Levitón was merely exercising the options available to it under the governing rules[,] ... [b]ut this court should ... evaluate the overall pattern of Leviton’s conduct in which it failed to heed the numerous road signs warning it to' ‘STOP.’ ” Plaintiffs’ Reply ECB at 4. ■

The Plaintiffs argue that an award of attorneys’ .fees is necessary to avoid gross injustice, .because Levitón Manufacturing acted in bad faith. See Plaintiffs’ Reply ECB at 5. The Plaintiffs contend that “[t]here can be no real dispute about the fact [that Levitón Manufacturing] was in possession of objective evidence — the Settlement Agreement — at the outset of the case establishing that its infringement claims ... had to be brought in this District.” Plaintiffs’ Reply ECB at 6. Additionally, the Plaintiffs contend that Levitón Manufacturing was “aware of the legal basis for the Plaintiffs’ implied license argument,” not only because of TransCore, but because “Plaintiffs’ counsel certainly notified Levitón óf their implied license position.” Plaintiffs’ Reply ECB at 6. The Plaintiffs conclude: “That is proof enough of both objective baseléssness, and subjective bad faith.” Plaintiffs’ Reply ECB at 6 (emphasis in original).

The Plaintiffs contend that their fee requests are appropriate, and reasonable. See Plaintiffs Reply ECB at 7. They explain that they requested expenses relating to the ITC proceedings, because “such legal , time was incurred in order to obtain information necessary to proceed with their motion for a preliminary injunction, to ensure. Leviton’s compliance with the Court’s order granting that injunction and to obtain information requested by the Court....” Plaintiffs’ Reply ECB at 7. The Plaintiffs also assert that their requested legal fees are reasonable, because the “Plaintiffs achieved .an excellent result from the litigation, defeating Levitón at every stage, despite Leviton’s scorched earth tactics.” Plaintiffs’ Reply ECB at 7.

The Plaintiffs argue that, if the Court finds that Levitón Manufacturing’s preliminary injunction appeal was not initially frivolous, “the evidence establishes that Levitón conducted its appeal in a vexatious manner, including an excessively aggressive strategy of seeking amici and culminating in seeking en banc review of the Federal Circuit’s opinion.” Plaintiffs’ Reply ECB at 8. Alternatively, the Plaintiffs contend that, “at the very least, Leviton’s appeal became frivolous after ... the Federal Circuit affirmed the preliminary injunction.” Plaintiffs’ Reply ECB at 8. -

The Plaintiffs contend that the Federal Circuit allows parties to collect paralegal fees, even for work that attorneys do not traditionally do. . See Plaintiffs’ Reply ECB at 9. The Plaintiffs contend that Lev-itón Manufacturing’s arguments to the contrary rely on “uncontrolling and inap-posite case law from the Fifth and Eleventh Circuits.” Plaintiffs’ Reply ECB at 9. The Plaintiffs further argue that they seek to recover costs for work that is “not merely clerical in nature[, such as] charges relating to the creation and maintenance of sophisticated computer databases by highly skilled information technology specialists.” Plaintiffs’ Reply ECB at 10.

At the hearing on March 6, 2013, Levi-tón Manufacturing argued that the Federal Circuit, in publishing an opinion and requesting the Plaintiffs respond to Levi-tón Manufacturing’s motion for en banc rehearing, demonstrated that Levitón Manufacturing’s case had precedential value. See Transcript of Hearing at 25:1-7 (taken March 6, 2013)(Shatzer)(“March 6, 2013 Tr.”). Levitón Manufacturing also noted that a law professor included the Federal Circuit’s opinion in an intellectual property class syllabus. March. 6, 2013 Tr. at 21:19-22:2 (Shatzer). Levitón Manufacturing also stated that, following the Federal Circuit’s decision, Levitón Manufacturing promptly moved to dismiss their claims, but the Plaintiffs “wanted this case to go forward because they wanted to get a judgment.” March 6, 2013 Tr. at 24:4-15 (Shatzer). Ann G. Fort, one of the Plaintiffs’ attorneys, argued that the Federal Circuit could have chosen to publish its opinion for any number of reasons besides that it found the ruling precedential. See March 6, 2013 Tr. at 28:17-19 (Fort). For instance:

It could be because the clerk who worked on it is particularly proud of the reasoning, or because it presented an opportunity to apply existing precedent in a way that might be useful to judges ... and to parties[,] ... but that doesn’t preclude a finding that the party who brought the appeal and lost ... did so recklessly and with subjective bad faith.

March 6, 2013 Tr. at 28:19-25 (Fort).' Ms. Fort also stated that “the only place where I think it might be fair to say that ... Leviton’s conduct was not exceptional was in opposing the preliminary injunction.” Mar. 6, 2013 Tr. at 36:15-18 (Fort). Mark J. Rosenberg, another Plaintiffs’ counsel, disagreed, however, stating: “I believe that the preliminary injunction motion should not have ever had to be [sic] filed[,] ... [because,] before we filed this case[,] we put Levitón on notice of Trans-CoreU and they proceeded anyway,” March 6, 2013 Tr. at 37:14-19 (Rosenberg). Ms. Fort also questioned Levitón Manufacturing’s evidence of its subjective good faith. See March 6, 2013 Tr. at 46:13-22 (Fort). While Levitón Manufacturing’s chief intellectual property counsel, Blonder, submitted a declaration that Lev-itón Manufacturing believed that the Settlement Agreement did not grant a license or covenant to anything other than the '558 and '766 patents, Ms. Fort argued that the Blonder Decl. merely describes Levitón Manufacturing’s subjective intent at the time of the Settlement Agreement’s formation and does not show that Levitón Manufacturing maintained that belief following the TramCore ruling. See March 6, 2013 Tr. at 46:13-22 (Fort). Ms. Fort concluded: “[E]ven if it did, it was objectively unreasonable -for [Levitón Manufacturing] to persist in that belief.” March 6, 2013 Tr. at 46:22 (Fort).

LAW REGARDING ATTORNEY’S. FEES. UNDER 35 U.S.C. § 285

Section 285 of Title 35 of the United States Code provides: “The court in exceptional cases may award reasonable, attorney .fees to the prevailing party.” 35 U-S.C. § 285.- The test for determining whether a case is exceptional under § 285 formerly came from Brooks Furniture Manufacturing, Inc. v. Dutailier International, Inc., 393 F.3d 1378 (Fed.Cir.2005) (“Brooks”). Brooks outlined two scenarios that can. render a case “exceptional.” First, “[a] case may be deemed exceptional when there has been some material inappropriate conduct related to the matter in litigation, such as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Fed.R.Civ.P. 11, or like infractions.” Brooks, 393 F.3d at 1381. Second, a case may be exceptional “if both (1) the litigation is brought in subjective bad faith, and (2) the litigation is objectively baseless.” Brooks, 393 F.3d at 1381.

, -In 2014, however, the Supreme Court of the United States expressly rejected the Brooks framework as being “overly rigid” and “superimpos[ing] an inflexible framework onto statutory text that is inherently flexible.” Octane Fitness, LLC v. ICON Health & Fitness, Inc., — U.S. -, 134 S.Ct. 1749, 1756, 188 L.Ed.2d 816 (2014) (“Octane”). The Supreme Court also took issue with Brooks ’ imposition of a “clear and convincing” standard, noting that patent-infringement cases typically require only a showing of a “preponderance of the evidence.” Octane, 134 S.Ct. at 1758.

Octane overruled Brooks and held that an “exceptional” case is merely one that “stands out from others with respect to the substantive strength of a party’s litigating position ... or the unreasonable manner in which the case-was litigated.” Octane, 134 S.Ct.'at 1752. To determine whether a case is exceptional, district courts may “consider[ ] the totality of the circumstances” on a case-by-case basis. Octane, 134 S.Ct. at 1752. While not providing a precise rule to apply, the Supreme Court suggested that' district courts consider a “nonexclusive list of factors, including frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.” 134.S.Ct. at 1756 n. & (2014) (quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 534, 114 S.Ct. 1023, 127 L.Ed.2d 455(1994)) (internal- quotation marks omitted). “Because § 285 commits the determination whether a case is ‘exceptional’ to the discretion of the district court, that decision is to be reviewed on appeal for abuse of discretion.” Highmark Inc. v. AllCare Health Mgmt. Sys. Inc., — U.S. -, 134 S.Ct. 1744, 1748, 188 L.Ed.2d 829 (2014) (“Highmark ”). “Although the awáfd of fees is clearly within the discretion of the district court, when ... a court finds litigation misconduct and that a case is exceptional, the court must articulate the reasons for its fee decision.” Oplus Techs., Ltd. v. Vizio, Inc., 782 F.3d 1371, 1375-76 (Fed.Cir.2015). These new guidelines apply retroactively to cases being litigated when the Supreme Court issued Octane. See, e.g., Precision Links Inc. v. USA Prods. Grp., Inc., No, 3:08-CIV-00576-MR, 2014 WL 2861759, at *3 (W.D.N.C.. June 24, 2014) (applying the Octane standard that was issued while the case was pending); Apple Inc. v. Samsung Elecs. Co., No. 11-CIV-01846-LHK, 2014 WL 4145499, at *2 (N.D.Cal. Aug. 20, 2014) (“Following the Supreme Court’s re,cent decisions [in Octane and Highmark ], the Court asked the parties to each submit a supplemental brief addressing the effect of the Supreme Court’s decisions on [the plaintiffj’s motion for attorneys’ fees.’!).

Section 285 also requires that a party must be the “prevailing party” in the litigation to receive attorneys’ fees, 35 U.S.C. § 285. A party is the prevailing party so long as “‘they succeed on any significant Issue in litigation which achieves some of the benefit the parties sought in bringing suit.’” Hensley, 461 U.S. at 433, 103 S.Ct. 1933 (quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir.1978)). A party prevails “when actual relief on the • merits of his claim materially alters the legal relationship between the parties by modifying the [non-movant’s] béhavior in a way that directly benefits the [movant].” Farrar v. Hobby, 506 U.S. 103, 111-12, 113 S.Ct. 566, 121 L.Ed.2d 494 (1992).

“Allowance of fees only in exceptional cases is based on the premise that courts should attempt to strike a balance between the -interest of the patentee in protecting his ^tatqtory rights and the interest of the public in confining such rights to their legal limits.” Mach. Corp. of Am. v. Gullfiber AB, 774 F.2d 467, 471 (Fed. Cir.1985). A court may award attorney’s fees under this-statute to.either a plaintiff or a defendant. See Phonometrics, Inc. v. ITT Sheraton Corp., 64 Fed.Appx. 219,221 (Fed.Cir.2003) (unpublished) (“When ‘the patentee is manifestly unreasonable in assessing infringement, while continuing to assert infringement in court, an inference is proper, of bad faith, whether grounded in or denominated [by] wrongful intent, recklessness, or gross negligence.’” (quoting Eltech Sys., Corp. v. PPG Indus,, 903 F.2d 805, 811 (Fed.Cir.1990))). The Federal Circuit applies its own law “to claims for attorneys’.fees under section 285 of the Patent Act because section 285 relates to an area of substantive law within our exclusive jurisdiction” while also “affording] district courts ‘considerable discretion’ in determining the amount of reasonable attorney fees under § 285.” Bywaters v. United States, 670 F.3d 1221, 1227-28 (Fed.Cir.2012). The Federal Circuit adopted this approach to “respect ‘the district court’s superior understanding of the litigation and the desirability of avoiding frequent appellate review of what essentially are factual matters.’” Bywaters v. United States, 670 F.3d at 1228 (quoting Hensley, 461 U.S. at 437, 103 S.Ct. 1933 (1983)).

“As a general matter, ... a claim for attorney’s fees is not part of the merits of the action to which the fees pertain.” Budinich v. Becton Dickinson & Co., 486 U.S. 196, 200, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988). “Such an award does not remedy the injury giving rise to the action, and indeed is often available to the party defending against the action.” Budinich v. Becton Dickinson & Co., 486 U.S. at 200, 108 S.Ct. 1717. “At common law, attorney’s fees were regarded as an element of ‘costs’ awarded to the prevailing party.” Budinich v. Becton Dickinson & Co., 486 U.S. at 200, 108 S.Ct. 1717. Additionally, “[m]any féderal statutes providing for attorney’s fees continue to specify that they are to be taxed and collected as ‘costs.’ ” Budinich v. Becton Dickinson & Co., 486 U.S. at 201, 108 S.Ct. 1717. Even when a lower court has not yet decided the issue of attorneys’ fees, and the attorneys’ fees are “part of the merits of judgment,” the merits of a case are still final for appellate purposes:

This practical approach to the matter suggests that what is of importance here is not preservation of conceptual consistency in the status of a particular fee authorization as “merits” or “nonmer-its,” but rather preservation of operational consistency and predictability in the overall application of § 1291. This requires, we think, a uniform rule that an unresolved issue of attorney’s fees for the litigation in question doe