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LIBERTY LEATHER PRODS. CO. v. VT INT'L

January 2, 1996

LIBERTY LEATHER PRODUCTS CO., INC., Plaintiff, against VT INTERNATIONAL, LTD., Defendant.


The opinion of the court was delivered by: MOTLEY

 MEMORANDUM OPINION ON MOTION FOR ATTORNEY'S FEES

 Defendant's post-judgment motion for attorney's fees arises in the context of the instant patent infringement action. On July 27, 1995, this court granted defendant's motion for summary judgment, finding that the invention upon which the suit is based was "obvious, in light of the prior art, to a person having ordinary skill in the pertinent art." Liberty Leather Products, Inc. v. VT International Ltd., 894 F. Supp. 136, 137 (S.D.N.Y. 1995). Defendant has moved for attorney's fees under 35 U.S.C. § 285, arguing that the instant litigation is an "exceptional" case warranting such relief. For the reasons set forth below, the motion is denied.

 I. BACKGROUND

 The court assumes familiarity with the basic facts of the instant dispute which are set forth in the prior opinion in this case. 894 F. Supp. at 137-139. To summarize, plaintiff Liberty Leather Products Co., Inc. ("Leather") is the owner of United States Patent No. 5,291,976 (the "Leather Patent") which covers a hand-operated luggage cart (the "Leather Product"). *fn1" By prior order, this court found for the defendant VT International Ltd. ("VT") on its motion for summary judgment, finding the Leather Product unpatentable because it would have been obvious to someone reasonably versed in the prior art at the time of the invention. 894 F. Supp. at 140-142.

 The defendant now asks for attorney's fees in this action because, it is alleged, plaintiff's agents made knowingly false representations to the United States Patent Office when originally seeking the Office's approval for the patent at issue. Defendant argues that the following misstatements were made: 1) that plaintiff's agent had personally conducted a search, at the Office, concerning relevant similar patents; 2) that another patent (the "Mao Patent") did not show that the handtruck's cart was attached to the luggage component, an allegedly distinguishing feature of the Leather Product; 3) similarly, that the Mao Patent did not have a concealed compartment for the handle of the handtruck, another supposedly relevant feature of the Leather Product; and, 4) that another relevant patent (the "Plath Patent") did not describe the locking mechanism of the handle, a device similar to the Leather Product's locking mechanism.

 In response, plaintiff argues that its agent's firm conducted a search at the patent office, the results of which were reviewed by the agent. On each of the remaining points raised by defendant, plaintiff argues that defendant has not met the requirements of 35 U.S.C. § 285 because it fails to show the requisite clear and convincing evidence that these alleged misrepresentations were material in nature and carried out with the intent to deceive the Patent Office.

 II. ANALYSIS

 A. STANDARDS APPLICABLE UNDER 35 U.S.C. § 285.

 35 U.S.C. § 285 provides: "The court in exceptional cases [under this Title] may award reasonable attorney fees to the prevailing party." To award attorney's fees, "the district court must determine whether the case is 'exceptional;' if it is, then it is within the court's discretion to award attorney's fees to the prevailing party." J.P. Stevens Company Inc. v. Lex Tex Ltd., Inc., 822 F.2d 1047, 1050 (Fed. Cir. 1987) (citations omitted); Reactive Metals and Alloys Corporation v. ESM, Incorporated, 769 F.2d 1578, 1582-1583 (Fed. Cir. 1985). See also, Beckman Instruments Inc. v. LKB Produkter AB, 892 F.2d 1547, 1551 (Fed. Cir. 1989) (decision to award attorney's fees lies with discretion of the trial court). Attorney's fees should not be assessed against a losing party, however, "'for merely defending or prosecuting a lawsuit,'" Revlon Inc. v. Carson Products Co., 803 F.2d 676, 679 (Fed. Cir. 1986), cert. denied, 479 U.S. 1018, 93 L. Ed. 2d 722, 107 S. Ct. 671 (1986) (quoting Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718, 18 L. Ed. 2d 475, 87 S. Ct. 1404 (1967)), and should only be awarded "to avoid a gross injustice." Revlon Inc. v. Carson Products Co., 803 F.2d at 679.

 A case can be considered "exceptional" under the statute authorizing the award of attorney's fees for "willful infringement, inequitable conduct before the PTO, misconduct during litigation, vexatious or unjustified litigation, and frivolous suit." Beckman Instruments Inc., 892 F.2d at 1551 (emphasis added); Standard Oil Co. v. American Cyanamid Co., 774 F.2d 448, 455 (Fed. Cir. 1985).

 The instant motion is based on plaintiff's alleged "inequitable conduct" before the Patent Office Examiner during an application to expedite the patent's approval. Inequitable conduct can form the basis not only for an award of attorney's fees in patent infringement cases but also for a determination that a patent should be voided, and courts apply a similar standard in each situation. See, e.g., Molins PLC v. Textron Inc., 48 F.3d 1172, 1186-1187 (Fed. Cir. 1995).

 The court in Molins PLC, supra., described inequitable conduct as follows:

 
Inequitable conduct includes affirmative misrepresentations of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive. One who alleges inequitable conduct arising from a failure to disclose prior art must offer clear and convincing proof of the materiality of the prior art, knowledge chargeable to the applicant of that prior art and of its ...

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