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My Health, Inc. v. ALR Technologies, Inc.

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

January 10, 2020

MY HEALTH, INC., Plaintiff,
v.
ALR TECHNOLOGIES, INC., Defendant.

          ORDER

          ROBERT W. SCHROEDER III UNITED STATES DISTRICT JUDGE

         Before the Court are Defendants' objections (Docket No. 238) to the Memorandum Opinion and Order of Magistrate Judge Payne (Docket No. 236). The Magistrate Judge denied Defendants' motion to join the counsel and the sole officer of Plaintiff My Health, Inc. in this action in order to collect the attorneys' fees awarded against My Health under 35 U.S.C. § 285.

         I. BACKGROUND

         On May 19, 2016, Plaintiff My Health, Inc. (“My Health”) filed this action against Defendant ALR Technologies, Inc. (“ALR”) and alleged that ALR infringed My Health's U.S. Patent No. 6, 612, 985 (the “ '985 Patent”). Docket No. 1.[1] My Health filed similar infringement actions against InTouch Technologies, Inc. (“InTouch”), DeVilbiss Healthcare, LLC (“DeVilbiss”), MyNetDiary, Inc. (“MyNetDiary”), Aspire Home Healthcare (“Aspire”) and McKesson Technologies, Inc. (“McKesson”), with each case alleging infringement of the '985 Patent. These cases were referred to Magistrate Judge Payne pursuant to 28 U.S.C. § 636 and later consolidated. Docket No. 20.

         A. Defendants' Motions to Dismiss Under 35 U.S.C. § 101

         Shortly after these actions were consolidated, all defendants filed motions to dismiss pursuant to 35 U.S.C. § 101. Docket Nos. 12 (ALR), 25 (McKesson); No. 2:16-cv-00536, Docket No. 13 (InTouch); No. 2:16-cv-00544, Docket No. 15 (DeVilbiss); No. 2:16-cv-00866, Docket No. 12 (MyNetDiary). Magistrate Judge Payne recommended dismissal. Docket Nos. 66 and 69. This Court adopted that recommendation, declared the patent-in-suit invalid for failure to claim patent-eligible subject matter and dismissed My Health's complaints with prejudice. Docket No. 78. Thereafter, ALR, InTouch, McKesson and MyNetDiary's sought attorneys' fees under 35 U.S.C. § 285. Docket No. 81. DeVilbiss later joined the motion. Docket Nos. 82 and 98.

         B. Defendants' Entitlement to Attorneys' Fees Under 35 U.S.C. § 285

         My Health requested to stay Defendants' § 285 motion, Docket No. 89, while My Health appealed the Court's § 101 order, Docket No. 85. Magistrate Judge Payne denied the request to stay, Docket No. 98, and declared the case exceptional under § 285. Docket No. 131. Magistrate Judge Payne ordered My Health to pay Defendants' attorneys' fees within 60 days of the § 285 Order, which was entered on December 19, 2017. Id. at 13.

         My Health unsuccessfully appealed the § 285 Order. Docket Nos. 134, 162. My Health then objected to the § 285 Order. Docket Nos. 167, 168 and 175. This Court overruled My Health's objection, adopted the § 285 Order and ordered My Health to pay Defendants' attorneys' fees within 30 days of that Order, which was entered on November 30, 2018. Id.

         C. My Health Has Not Paid Defendants' Attorneys' Fees

         It has been almost two years since My Health was first ordered to pay Defendants' attorneys' fees under § 285. Although My Health once represented to the Court that there “is no allegation or basis to allege that My Health will be unable to pay an award of reasonable attorneys' fees” when My Health's § 101 appeal concluded, see Docket No. 89 at 7, My Health now acknowledges that “as a practical matter, My Health simply is incapable of paying the fees award.” Docket No. 168 at 7. My Health is now apparently insolvent. See Docket No. 194-1 ¶¶ 33-34.

         D. Defendants' Motions to Join Plaintiff's Counsel and Sole Officer

         My Health's counsel, Pia Anderson Moss Hoyt LLC (“Pia Anderson”), moved to withdraw as counsel for My Health on the basis that My Health has failed to pay its attorneys' fees to Pia Anderson. Docket No. 178. Defendants opposed the withdrawal, Docket No. 179, and moved to join Pia Anderson and My Health's sole officer, Dr. Michael Eiffert, in this action on the basis that both are responsible for the conduct underlying the Court's § 285 Order. Docket No. 182. In their motion for joinder, Defendants also sought sanctions against lead counsel at Pia Anderson. Id. at 8.[2] Magistrate Judge Payne ordered Defendants to supplement their joinder motion by filing a motion with an attached proposed supplemental pleading so that the Court could evaluate the factual allegations underlying the request. Docket No. 218. Defendants filed their motion to supplement the joinder motion indicating: “Pursuant to the Court's Order (Docket No. 218), Defendants move to supplement Defendants' Motion for Joinder of the Pia Firm and Michael Eiffert (Docket No. 182) with the attached supplemental pleading and exhibits thereto.” Docket No. 230. Defendants also moved for an order to show cause as to why My Health should not be held in contempt for failing to pay their attorneys' fees. Docket No. 183.

         E. The Magistrate Judge's ...


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