Free Reply to Response to Motion - District Court of Arizona - Arizona

1 Laura Zeman (#014713) Jennifer Hadley Dioguardi (#018380) 2 SNELL & WILMER L.L.P. One Arizona Center 3 400 E. Van Buren Phoenix, AZ 85004-2202 4 Telephone: (602) 382-6371 Facsimile: (602) 382-6070 5 E-mail: [email protected] [email protected] 6 Anthony R. Zeuli (Admitted Pro Hac Vice) 7 MERCHANT & GOULD LLP 3200 IDS Center th 8 80 South 8 Street 55402-2215 Minneapolis, MN 9 Telephone: (612) 332-5300 Attorneys for Defendant Ingram Industries, Inc. and 10 Nash-Finch Company 11
LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

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Lemelson Medical, Education & Research Foundation, Limited Partnership, Plaintiff, v. Comp USA Inc., et al., Defendants.

No. CV-00-00663 PHX-HRH REPLY IN SUPPORT OF DEFENDANTS INGRAM INDUSTRIES, INC.'S AND NASH-FINCH COMPANY'S MOTION FOR AWARD OF ATTORNEYS' FEES

Plaintiff completely ignores Defendants'1 argument that the finding of "culpable neglect" in this case is sufficient to support this court determining that this matter satisfies the exceptionality requirement of Section 285. Section 285 is satisfied if there is a finding of gross negligence. Machinery Corp. of America v. Gullfiber AB, 774 F.2d 467, 473 (Fed. Cir. 1985). "Culpable neglect" is gross negligence. Smith v. Wade, 461 U.S. 30, 45 n.12 (1982). Therefore, the "culpable neglect" in this case is sufficient to

Ingram Industries, Inc. and Nash Finch, collectively Defendants.
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support a finding of exceptionality. Lemelson cannot and does not cite case law to the contrary. Instead, Lemelson makes two arguments in opposition to an award of attorneys' fees: (1) that prosecution laches can never form the basis for a finding of "exceptionality;" and (2) even if it could, prosecution laches is a "new" defense and therefore it would not be appropriate to assess fees against Lemelson. Both arguments fail. 1. Prosecution Laches Can Support Exceptionality Where, As Here, The Conduct Causing Prosecution Laches Constitutes Culpable Neglect.

Lemelson cites no case law for the proposition that prosecution laches can never be the underlying basis for a finding of exceptionality. Instead, Lemelson relies on cases that affirmatively set forth a list of acts that can form the basis of a finding of "exceptional" circumstances. See, e.g., Forest Labs., Inc. v. Abbott Labs., 339 F.3d 1324, 1329 (Fed. Cir. 2003). However, none of these cases holds or implies that these

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enumerated acts are an exclusive list of the only acts that can ever form a basis for a finding of exceptionality. To the contrary, the appellate court has stated that "other reasons" may support such a finding. Orthopedic Equipment Co. v. All Orthopedic Appliances, Inc., 707 F.2d 1376, 1384 (Fed. Cir. 1983) ("finding of fraud or inequitable conduct during the prosecution of a patent is not necessary to constitute an `exceptional' case under [Section 285], as it may be exceptional for some other reason."). Even the decision in Forest Labs. explains that the only limit on the applicability of Section 285 is that it is reserved for "circumstances in which it is necessary to prevent `a gross injustice' to the accused infringer." Forest Labs., 339 F.3d at 1329. The district court and court of appeals that examined the conduct of the Plaintiff in this case explained in detail the gross injustice worked by what both courts called the Plaintiff's "culpable neglect." Plaintiff also argues that the only conduct during the prosecution of a patent that can rise to the level of "exceptional" is inequitable conduct. Plaintiff's argument again is contrary to Federal Circuit law, which does not limit the applicability of Section 285 to
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particular conduct but rather to cases in which an award of fees will prevent a gross injustice. For example, in Orthopedic Equipment, the Federal Circuit specifically

rejected plaintiff's argument that inequitable conduct is the only conduct during prosecution of a patent that can rise to the level of "exceptional." Orthopedic Equipment, 707 F.2d at 1384. In Revlon, cited by Plaintiff, the court of appeals again repeated its "gross injustice" standard and did not hold that a finding of inequitable conduct was the only conduct during prosecution of a patent that could support exceptionality. Revlon, Inc. v. Carson Prods. Co., 803 F.2d 676, 679 (Fed. Cir. 1986) ("Under these circumstances, no gross injustice is prevented by ordering Carson to pay Revlon's attorney fees."). Similarly, the other three cases cited by the Plaintiff do not support its argument that inequitable conduct is the only conduct during prosecution of a patent that can support a finding of exceptionality. The Rohm & Haas Co. v. Crystal Chemical Co. decision provides a good history of Section 285, its legislative intent, and its case law. 736 F.2d 688, 689-93 (Fed. Cir. 1984). Although the decision rejected an award of fees in that case, it did not do so because Section 285 is somehow limited to the enumerated acts suggested by Plaintiff. To the contrary, the Rohm & Haas decision goes so far as to say that exceptionality may be met by not only the enumerated bases identified by Plaintiff, but also by "some finding of unfairness." Id. at 693. If the Federal Circuit limited Section 285 to the enumerated acts identified by Plaintiff, or to acts exclusive of prosecution laches, the court could have and would have said so. It did not and has not. 2. Prosecution Laches Is Not A "New" Defense.

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Lemelson, relying on Rohm & Haas, argues that this case is not appropriate for an award of attorney fees because the defense of prosecution laches "breaks new ground . . . and sets new standards." (Br. at 9.) That is not correct. Prosecution laches as a defense is almost one hundred years old. See Symbol Techs., Inc. v. Lemelson Medical, Research and Educational Foundation, 277 F.3d 1361, 1364 (Fed. Cir. 2002). Although Lemelson and one or two district courts may have thought the defense was no longer available, the
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Federal Circuit decision reversing the district court never suggested that it was "breaking new ground" or "set[ting] new standards," as that court did in the Rohm & Haas decision. The district court held, and the court of appeals affirmed, that Lemelson's conduct at the patent office constituted culpable neglect. Culpable neglect is gross negligence, and gross negligence is sufficient so support a finding of exceptionality under Section 285. Attorneys' fees are appropriate in this case and, indeed, perhaps more so than in any other such case. DATED this 25th day of April, 2006. SNELL & WILMER L.L.P. By: s/ Jennifer Hadley Dioguardi Laura Zeman (#014713) Jennifer Hadley Dioguardi (#018380) One Arizona Center 400 E. Van Buren Phoenix, AZ 85004-2202 E-mail: [email protected] [email protected] -andAnthony R. Zeuli (Admitted Pro Hac Vice) MERCHANT & GOULD LLP 3200 IDS Center 80 South 8th Street Minneapolis, MN 55402-2215 Attorneys for Defendant Ingram Industries, Inc and Nash-Finch Company.

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

CERTIFICATE OF SERVICE I hereby certify that on the 25th day of April, 2006, I electronically transmitted the attached document to the Clerk's Office using the ECF System for filing and transmittal of a Notice of Electronic Filing to the following ECF registrants: James W. Armstrong, Esq. Sacks Tierney, PA 4250 North Civic Center Blvd. 4th Floor Scottsdale, AZ 85251 Michael A. Beale John A. Michaels Beale & Michaels, P.C. 1440 E. Missouri Ave., Suite 150 Phoenix, AZ 85014 David P. Berten Competition Law Group LLC 120 S. State Street, Suite 300 Chicago, IL 60603 Peter J. Brann, Esq. Brann & Isaacson LLP P.O. Box 3070 Lewiston, ME 04243 Robert R. Brunelli E-mail: [email protected] Paul E. Burns, Esq. Steptoe & Johnson, LLP Collier Center 201 E. Washington St., Ste. 1600 Phoenix, AZ 85004 Timothy J. Casey Jennifer Hadley Dioguardi Bradley W. Petersen Douglas W. Seitz Laura Zeman Snell & Wilmer LLP One Arizona Center 400 East Van Buren Phoenix, AZ 85004-2202 Edward T. Colbert Kenyon & Kenyon 1500 K St NW, Suite 700 Washington, DC 20005

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Victoria Gruver Curtin Victoria Gruver Curtin PLC 14614 North Kierland Blvd., Suite 300 Scottsdale, AZ 85254 John E. DeWulf Roshka Dewulf & Patten PLC One Arizona Center, Suite 800 Phoenix, AZ 85004-3906 Brett L. Dunkelman Osborn Maledon PA 2929 North Central Avenue, Suite 2100 Phoenix, AZ 85012-2794 Richard A. Halloran Lewis & Roca LLP 40 North Central Avenue Phoenix, AZ 85004-4429 Ray Kendall Harris Fennemore Craig PC 3003 North Central Avenue, Suite 2600 Phoenix, AZ 85012 Louis J. Hoffman Hoffman & Zur 14614 North Kierland Blvd., Suite 300 Scottsdale, AZ 85254 Isabel M. Humphrey Hunter Humphrey & Yavitz PLC 410 North 44th Street, Suite 320 Phoenix, AZ 85008 Susan E. Irwin Manning & Marder Kass Ellrod Ramirez LLP 14362 N. Frank Lloyd Wright Boulevard Suite 2300 Scottsdale, AZ 85260 Robert J. Itri Gallagher & Kennedy PA 2575 E. Camelback Road, Suite 1100 Phoenix, AZ 85016 Jonathan M. James Perkins Coie Brown & Bain PA P.O. Box 400 Phoenix, AZ 85001-0400 Cheryl Lee Johnson Squire Sanders & Dempsey LLP 801 S. Figueroa Street, 14th Floor Los Angeles, CA 90017
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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Steven G. Lisa Law Offices of Steven G. Lisa, Ltd. 401 North Michigan Avenue, Suite 1200 Chicago, IL 60611 Jennifer P. Nore Meyer, Hendricks & Bivens 3003 N. Central Ave., Suite 1200 Phoenix, AZ 85012-2915 Robert J. Pohlman Ryley Carlock & Applewhite PC One North Central Avenue, Suite 1200 Phoenix, AZ 85004 Michael Rudolph Ross Meyer Hendricks & Bivens PA P.O. Box 2199 Phoenix, AZ 85001 Michael S. Rubin Marical, Weeks, McIntyre & Friedlander PA 2901 N. Central Ave. Suite 200 Phoenix, AZ 85012 Barry R. Sanders Mariscal Weeks McIntyre & Friedlander PA 2901 North Central Avenue, Suite 200 Phoenix, AZ 85012 Benjamin C. Thomas Thomas Thomas & Appel PC 2700 North Central Avenue, Suite 800 Phoenix, AZ 85004 Donald J. Wall Mark A. Nadeau Squire Sanders & Dempsey LLP Two Renaissance Square 40 North Central Avenue, Suite 2700 Phoenix, AZ 85004-4441 Peter C. Warner Peter C. Warner PC 1723 W. 4th Street Tempe, AZ 85281-2404 Darlene Marie Wauro Roshka Dewulf & Patten PLC One Arizona Center, Suite 800 Phoenix, AZ 85004-3906

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I hereby certify that on the 25th day of April, 2006, I served the attached document by U.S. Mail on the following, who are not registered participants of the ECF System: Andrew Abraham Burch & Cracchiolo PA PO Box 16882 Phoenix, AZ 85011-6882 Hugh A Abrams Sidley Austin Brown & Wood LLP Bank 1 Plaza 10 S Dearborn St Chicago, IL 60603 Robert E B Allen Mariscal Weeks McIntyre & Friedlander PA 2901 N Central Ave Ste 200 Phoenix, AZ 85012-2705 Larry C Boyd Ingram Micro Inc 1600 E St Andrew Pl Santa Ana, CA 92705 Kenneth R Chiate Pillsbury Winthrop LLP 725 S Figueroa St Ste 2800 Los Angeles, CA 90017-5406 J Bennett Clark Senniger Powers Leavitt & Roedel 1 Metropolitan Sq 16th Floor St Louis, MO 63102 Kevin B Collins Venable Baetjer Howard & Civiletti LLP 1201 New York Ave NW Ste 1000 Washington, DC 20005-3917 Jennifer E Cook Senniger Powers Leavitt & Roedel 1 Metropolitan Sq 16th Floor St Louis, MO 63102

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William D Coston Venable Baetjer Howard & Civiletti LLP 1201 New York Ave NW Ste 1000 Washington, DC 20005-3917 John H Cotton John H Cotton & Associates Ltd 2300 W Sahara Ste 420 Las Vegas, NV 89102 Rita Coyle DeMeules Robins Kaplan Miller & Ciresi LLP 2800 LaSalle Plaza 800 LaSalle Ave Minneapolis, MN 55402-2015 David W Denenberg Gibbons Del Deo Dolan Griffinger & Vecchione 1 Pennsylvania Plaza 37th Fl New York, NY 10119 Martin I Eisenstein Brann & Isaacson LLP PO Box 3070 Lewiston, ME 04243-3070 Albert E Fey Fish & Neave 1251 Ave of the Americas New York, NY 10020 Mark A Flagel Latham & Watkins 633 W 5th St Ste 4000 Los Angeles, CA 90071-2007 John N Gallo Sidley Austin Brown & Wood LLP Bank 1 Plaza 10 S Dearborn St Chicago, IL 60603

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Scott H Gingold Latham & Watkins 5800 Sears Tower 233 S Wacker Dr Chicago, IL 60606 Jennifer P Goetsch Marshall O'Toole Gerstein Murray & Borun 233 S Wacker Dr Ste 6300 Chicago, IL 60606 Thomas O Gorman Porter Wright Morris & Arthur LLP 1919 Pennsylvania Ave NW Ste 500 Washington, DC 20006 George Gottlieb Gottlieb Rackman & Reisman PC 270 Madison Ave 8th Floor New York, NY 10016 Lee F Grossman Marshall O'Toole Gerstein Murray & Borun 233 S Wacker Dr Ste 6300 Chicago, IL 60606 Herbert J Hammond Thompson & Knight LLP 1700 Pacific Ave Ste 3300 Dallas, TX 75201 John E Hedstrom Porter Wright Morris & Arthur LLP 1919 Pennsylvania Ave NW Ste 500 Washington, DC 20006 Jesse J Jenner Fish & Neave 1251 Ave of the Americas New York, NY 10020

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Emily S Lau Fenwick & West LLP 2 Palo Alto Sq Ste 700 Palo Alto, CA 94306 Lisa Meyerhoff Jenkens & Gilchrist PC 1445 Ross Ave Ste 3200 Dallas, TX 75202 David A Nelson Latham & Watkins 5800 Sears Tower 233 S Wacker Dr Chicago, IL 60606 Bart James Patterson University & Community College 5550 W Flamingo Rd Ste C-1 Las Vegas, NV 89103-0137 Lisa A Pieroni Kirschstein Ottinger Israel & Schiffmiller PC 489 5th Ave 17th Floor New York, NY 10017 David Anthony Plumley Christie Parker & Hale LLP 350 W Colorado Blvd Ste 500 Pasadena, CA 91105 Susan E Powley Jenkens & Gilchrist PC 1445 Ross Ave Ste 3200 Dallas, TX 75202 Anthony R. Zeuli Merchant & Gould 3200 IDS Ctr 80 S 8th St Minneapolis, MN 55402-2215

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Charles Quinn Fish & Neave 1251 Ave of the Americas New York, NY 10020 James Samuel Rigberg Mariscal Weeks McIntyre & Friedlander PA 2901 N Central Ave Ste 200 Phoenix, AZ 85012-2705 Martin W Schiffmiller Kirschstein Ottinger Israel & Schiffmiller PC 489 5th Ave 17th Floor New York, NY 10017 Clyde A Shuman Cobrin & Gittes 750 Lexington Ave Ste 21 New York, NY 10022 George M Sirilla Pillsbury Winthrop LLP 1600 Tysons Blvd McLean, VA 22102 Bruce S Sostek Thompson & Knight LLP 1700 Pacific Ave Ste 3300 Dallas, TX 75201 Stefan V Stein Holland & Knight LLP 100 N Tampa St Ste 4100 Tampa, FL 33602-3644 Jay Todd Stewart Perkins Coie Brown & Bain PA PO Box 400 Phoenix, AZ 85001-0400 Mark Michael Supko Kenyon & Kenyon 1500 K St NW Ste 700 Washington, DC 20005-1257 Raymond L Sweigart Pillsbury Winthrop LLP 1600 Tysons Blvd McLean, VA 22102
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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

William M Wesley McAndrews Held & Malloy Ltd 500 W Madison St Ste 3400 Chicago, IL 60661 Christopher C Winslade McAndrews Held & Malloy Ltd 500 W Madison St Ste 3400 Chicago, IL 60661 Darryl M Woo Fenwick & West LLP 275 Battery St Ste 1600 San Francisco, CA 94111-3305 Donald L Zachary Bass Berry & Sims PLC First American Ctr 315 Deaderick St Ste 2700 Nashville, TN 37238-0002 Elizabeth L Zepeda 600 Citadel Dr Commerce, CA 90040 Norman H Zivin Cooper & Dunham LLP 1185 Ave of the Americas New York, NY 10036 Thomas Zych Thompson Hine & Flory LLP 3900 Key Ctr 127 Public Sq Cleveland, OH 44114-1216 SNELL & WILMER L.L.P. By: s/ Jennifer Hadley Dioguardi Laura Zeman (#014713) Jennifer Hadley Dioguardi (#018380) One Arizona Center 400 E. Van Buren Phoenix, AZ 85004-2202 E-mail: [email protected] [email protected] -and-

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Anthony R. Zeuli (Admitted Pro Hac Vice) MERCHANT & GOULD LLP 3200 IDS Center 80 South 8th Street Minneapolis, MN 55402-2215 Attorneys for Defendant Ingram Industries, Inc. and Nash-Finch Company
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