United States District Court, S.D. Indiana, Indianapolis Division
ORDER ON DEFENDANT'S MOTIONS FOR EXCEPTIONALITY
J. McKINNEY, United States District Court Judge
matter is before the Court on Defendant Cook Medical
LLC's (“Cook's”) Motion to Find the Case
Exceptional and Award Fees against Plaintiff Stone Basket
Innovations, LLC (“SBI”). Dkt. 99. Cook has also
filed, pursuant to Federal Rule of Civil Procedure 19
(“Rule 19”), a Motion to Join Daniel Mitry and
Timothy Salmon. Dkt. 91. Cook seeks the recovery of its
attorneys' fees and costs against SBI, SBI's counsel
Sutton McAughan Deaver PLLC (“SMD”), Mitry, and
Salmon, following its defense of a patent infringement claim
asserted by SBI against Cook. Dkt. 1. Cook alleges that it is
entitled to its fees under 35 U.S.C. § 285, which allows
for a prevailing party in patent litigation to recover
attorney fees “in exceptional cases;” and/or
under 28 U.S.C. § 1927 for vexatious litigation. Cook
further requests, pursuant to Rule 19, that the Court
personally join Mitry and Salmon to this action in order to
provide Cook adequate relief. For the reasons set forth
below, Cook's motions are DENIED.
DR. DHINDSA'S PATENT
Dhindsa, M.D., obtained U.S. Patent No. 6, 551, 327 (the
“‘327 Patent”) for his stone extraction
device used to remove kidney stones. Dkt. 1. During the
prosecution of the ‘327 Patent, the Examiner twice
rejected the application finding that the prior art disclosed
each of the limitations of the claimed invention. Dkt. 99-4
at 15-34, 88-93. To overcome these rejections, Dr. Dhinsda
added a “sheath movement element” that allowed
the physician extracting the stones to close the basket by
advancing a “sheath” over it and then open the
basket by withdrawing the sheath. Dkt. 99-4 at 99-100.
October 2014, Salmon contacted SMD to seek representation on
the enforcement of the ‘327 Patent, which SBI had
recently acquired from Dr. Dhindsa. Dkt. 106-2, ¶ 4.
Salmon told Dr. Dhindsa that he wished to acquire the
‘327 Patent because he believed Cook infringed the
patent. Dkt. 99-7 at 173. Salmon informed SMD that Cook had
been chosen as a defendant. Dkt. 106-2, ¶ 4. On October
21, 2014, Salmon provided SMD the ‘327 Patent, the
‘327 Patent file history, and an illustrative claim
chart mapping the Cook NCompass stone extraction device
against claim 1 of the ‘327 Patent. Dkt. 106-2, ¶
interviewed Dr. Dhindsa about the ‘327 Patent. Dkt.
106-2, ¶ 6. Dr. Dhindsa explained the purpose and use of
his invention, which was to catch the small stone particles
with a basket. Dkt. 106-2, ¶ 6. He also described his
prior communications with Cook about his device. Dkt. 106-2,
¶ 6. Specifically, in July 2001, prior to its
publication, Dr. Dhindsa discussed his stone extraction
device patent application with Cook representatives. Dkt.
106-4 at 147-48. On September 6, 2001, Cook informed Dr.
Dhindsa that it believed his idea was “good” but
stated that it did not have the capacity to work on his
project at that time. Dkt. 106-5. In August 2006, Cook
announced the release of its NCompass Nitinol Stone Extractor
(“NCompass”), which is the device accused of
infringement in the instant case. Dkt. 106-6.
March 18, 2015, Mitry and Salmon formed SBI and are its only
managing members. Dkt. 99-8. SBI's sole asset is the
‘327 Patent. Dkts. 99-8; 99-9; 99-10; 99-11; 99-12;
April 8, 2015, SBI filed its Complaint against Cook in the
Eastern District of Texas (“Eastern District”)
alleging that Cook infringed the '327 Patent. Dkt. 1. SMD
claims it chose the Eastern District because: (1) Cook sold
and marketed the NCompass in the district; (2) the district
had well developed local patent rules; (3) the district
judges there are well versed in patent cases; and (4) the
time to trial in the district was found to be short compared
to other districts. Dkt. 106-2, ¶ 8.
April 30, 2015, Cook's counsel informed SMD that it would
be seeking a motion to transfer, to which SBI refused to
consent. Dkt. 106-2, ¶ 10. On May 15, 2015, Cook filed
its Motion to Transfer Venue pursuant to 28 U.S.C. §
1404. Dkt. 10. At no point during the pendency of its motion
to transfer did Cook request that SBI agree to stay the
litigation proceedings until a ruling on the motion. Dkt.
106-2, ¶ 11.
served its infringement contentions on July 16, 2015, to
which Cook never raised any complaint or objection. Dkt.
106-2, ¶ 12. SBI also served Cook interrogatories on
August 26, 2015. Cook timely answered, but SBI claimed the
responses were insufficient. Dkt. 106-9. Cook provided
supplemental responses on December 15, 2015, which again SBI
believed to be unsatisfactory. Dkt. 106-10. Cook supplemented
its responses on March 8, 2016.
served its invalidity contentions on October 1, 2015, which
SBI believed did not meet the minimum standards of the
Eastern District's local patent rules. Dkt. 106-11. SBI
requested that Cook amend or supplement its contentions,
which it did on November 2, 2015. Dkt. 106-11. Cook never
communicated to SBI a demand that the lawsuit be dismissed
based on the invalidity contentions. Dkt. 106-2, ¶ 13.
November 13, 2015, SBI indicated that no terms needed
construed. Dkt. 106-13. To the contrary, Cook sought claim
construction on twenty-five terms and/or phrases. Dkt.
106-15. On January 5, 2016, Cook dropped twenty-three of the
twenty-five terms and added one new term for construction at
the Markman hearing.
December 7, 2015, Cook emailed SBI to inform it that it would
be requesting oral argument on its motion to transfer venue,
which SBI did not oppose. Dkt. 106-18. On December 11, 2015,
Cook filed its unopposed request for oral argument on
December 11, 2015. Dkt. 29.
January 7, 2016, Cook deposed Dr. Dhindsa in Phoenix,
Arizona. See Dkt. 106-4. During his deposition, Dr.
Dhindsa was asked questions about his contact with Empire IP,
LLC (a company owned by Mitry and Salmon and prior assignee
of the ‘327 Patent), the conception of his invention,
his contact with Cook, and the preparation for the ‘327
Patent. See Dkt. 106-4. When asked about the
“sheath movement element” in claim 1 to overcome