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Erfindergemeinschaft UroPep GbR v. Eli Lilly and Co.

United States District Court, E.D. Texas, Marshall Division

July 18, 2017

ERFINDERGEMEINSCHAFT UROPEP GbR, Plaintiff,
v.
ELI LILLY AND COMPANY, Defendant.

          MEMORANDUM OPINION AND ORDER

          WILLIAM C. BRYSON UNITED STATES CIRCUIT JUDGE

         Before the Court is the motion of plaintiff Erfindergemeinschaft UroPep GbR (“UroPep”) for an award of attorney fees in this case. Dkt. No. 369. Defendant Eli Lilly & Co. (“Lilly”) opposes. The Court DENIES UroPep's motion.

         Section 285 of the Patent Act, 35 U.S.C. § 285, authorizes district courts to award reasonable attorney fees to the prevailing party “in exceptional cases.” In Octane Fitness LLC v. ICON Health & Fitness Inc., 134 S.Ct. 1749 (2014), the Supreme Court interpreted the term “exceptional case[]” to mean “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.” Id. at 1756. The Court added that “[t]here is ‘no precise rule or formula for making these determinations, ' but instead equitable discretion should be exercised” in light of the circumstances. Id. (quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994)).

         UroPep asserts two grounds in support of its request for a fee award: First, UroPep argues that after the Court's claim construction, Lilly's non-infringement position was entirely meritless and that Lilly should not have put UroPep to the task of proving infringement at trial. Second, UroPep argues that Lilly's anticipation defense, which was based on a monograph by C.S. Cheung dealing with the herbal treatment of BPH, was meritless from the start and should not have been pressed at trial. Those two issues, according to UroPep, required UroPep to invest attorney time and resources prior to trial and at trial that should not have been necessary. Accordingly, UroPep requests a fee award to compensate it for the time and resources spent in addressing those two issues once it became clear that Lilly's position on those issues was without merit.

         The Court concluded at trial, and concludes again now, that Lilly's positions on those two issues were weak, but not so weak as to render the case “exceptional” and justify an award of attorney fees. The Supreme Court in Octane Fitness made clear that fee awards are not to be made lightly, but are to be reserved for cases that are “uncommon, rare, or not ordinary, ” i.e., well out of the mainstream. Octane Fitness, 134 S.Ct. at 1756. In so doing, the Court adopted the test that had been used by the courts, including the Federal Circuit, since the 1952 Patent Act and before the Federal Circuit's decision in Brooks Furniture Manufacturing, Inc. v. Dutailier International, Inc., 393 F.3d 1378 (Fed. Cir. 2005). Under the pre-Brooks standard, courts had held that in assessing whether a case qualifies as “exceptional” under section 285, “the district court must look at the totality of the circumstances.” Octane Fitness, 134 S.Ct. at 1754 (quoting Yamanouchi Pharm. Co. v. Crystal Chem. Co., 231 F.3d 1339, 1347 (Fed. Cir. 2000)). Applying the standard from Octane Fitness, this Court holds that this case is not “exceptional” and does not warrant an attorney fee award.[1]

         1. Lilly's Non-Infringement Position

         UroPep argues that Lilly had no defense to UroPep's infringement claim following the Court's February 2017 order in which the Court clarified that the claim term “an inhibitor of phosphodiesterase (PDE) V” meant a compound that was at least 20 times more selective for PDE5 than for PDE1 through PDE4. At that point, according to UroPep, Lilly should have conceded infringement, at least (presumably) if it could do so while preserving its position on claim construction. UroPep contends that Lilly's decision to force UroPep to litigate the issue of infringement after the Court's February 2017 order rendered the case exceptional.

         It is true that the Court in its February 2017 summary judgment order rejected several of Lilly's non-infringement arguments, including its argument that tadalafil, the active ingredient in Cialis, is not a PDE5 inhibitor within the meaning of the '124 patent because it is not more than 20 times more selective for PDE5 than for PDE11. Dkt. No. 234, at 13-16. Nonetheless, as the Court pointed out in its summary judgment order, Lilly still had available to it the argument that in order to prove infringement, UroPep had to prove that Cialis was administered to patients with BPH (i.e., lower urinary tract symptoms associated with an enlarged prostate), not simply to patients with lower urinary tract symptoms not associated with an enlarged prostate. Id. at 17-18.

         At trial, Lilly sought to defend against the infringement claim based on its contention that UroPep had failed to prove that Cialis was administered to patients to treat BPH, rather than to treat those not having BPH but having lower urinary tract symptoms not associated with an enlarged prostate. Developing that theory of defense occupied a significant part of Lilly's cross-examination of UroPep's physician witness, Dr. Sliwinski. By questioning Dr. Sliwinski as to how he diagnosed BPH before prescribing Cialis, Lilly attempted to show that doctors who prescribe Cialis for patients with lower urinary tract symptoms are not necessarily using Cialis to in fact treat BPH, because many of their patients may be suffering from lower urinary tract symptoms not associated with an enlarged prostate. That theory, if credited by the jury, could have resulted in a reduction of Lilly's infringement liability or, conceivably, a decision by the jury that UroPep had not proved infringement at all. Moreover, Lilly alluded to that theory during its closing argument, although it did not press the theory at that time beyond asking the jury to make its own determination on that issue. See Dkt. No. 346, Trial Tr. 1482. The jury apparently did not accept that theory, instead inferring that doctors properly diagnose BPH before prescribing Cialis for a BPH indication. Nonetheless, the theory was not frivolous, and the Court is not disposed to hold that Lilly was required to abandon that theory (and its non-infringement defense in general) following the Court's summary judgment ruling or be required to pay UroPep's attorney fees for the cost of putting on its infringement case.

         It is significant that UroPep is seeking fees for being required to prove an issue on which it bore the burden of proof. Lilly in effect said to UroPep: “It is your burden to prove infringement: Do it. And if your proof falls short in some respect, we will be entitled to judgment even in the absence of any affirmative evidence of non-infringement from our side.” UroPep emphasizes that its burden of proof on infringement-proof by a preponderance of the evidence-was not overly demanding. But UroPep cites no cases awarding attorney fees in a similar situation-that is, against the party without the burden of proof who declines to concede on an issue at or before trial. Compare, e.g., Homeland Housewares, LLC v. Sorensen Research, 581 F. App'x 877, 881 (Fed. Cir. 2014) (affirming fee award where patentee “appeared unprepared or unwilling to satisfy its burden” and “failed to produce its own admissible evidence of infringement”); Cartner v. Alamo Grp., Inc., 561 F. App'x 958, 965-66 (Fed. Cir. 2014) (affirming fee award where plaintiff patent holder advanced frivolous infringement argument); Intex Corp. v. Team Worldwide Corp., 77 F.Supp.3d 217 (D.D.C. 2015) (awarding fees against patent holder defendant in declaratory judgment action, where patent holder refused to stipulate to non-infringement after claim construction made clear that plaintiff's products did not infringe).[2]

         Notwithstanding the absence of authority supporting UroPep's position, the Court is not prepared to conclude that an attorney fee award would never be appropriate when the first party requires the second party with the burden of proof to prove its case, and the first party does not introduce countervailing evidence. Moreover, in this case the Court regards the jury's verdict on infringement as fully supported by the evidence and the law. Nonetheless, the Court is persuaded that Lilly's position on non-infringement did not render this case exceptional, as that term is used in section 285.

         2. Lilly's Anticipation Defense

         UroPep's second argument is that Lilly's anticipation defense based on the Cheung reference regarding the use of Horny Goat Weed as a treatment for BPH was manifestly meritless and justifies an attorney fee award to compensate UroPep for the time and expense of having to meet that defense. As in the case of Lilly's non-infringement position, the Court is persuaded that the jury was fully justified in rejecting Lilly's anticipation defense. Nonetheless, the Court concludes that Lilly's reliance on that defense was not so clearly unwarranted as to render this case exceptional and call for an attorney fee award.[3]

         Lilly is correct that the herb epimedii, or Horny Goat Weed, contains icariin, which is a selective PDE5 inhibitor. It is also true that the Cheung reference recommends the ingestion of Horny Goat Weed to treat BPH, and that the Cheung reference antedates the priority date of the '124 patent. Cheung reports that in a clinical study of 34 patients, the herbal treatment of what Cheung calls “prostate hypertrophy, ” i.e., BPH, produced positive results in 32 patients-more than 90 percent of the patients tested. Moreover, Lilly's expert, Dr. Claus Roehrborn, interpreted the pertinent passage of the Cheung reference to mean that ...


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