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GII Acquisition v. Cybernet Systems, Inc.

United States District Court, E.D. Michigan, Southern Division

November 5, 2019

GII ACQUISITION, Plaintiff,
v.
CYBERNET SYSTEMS, INC., Defendant.

          MEMORANDUM AND ORDER DENYING DEFENDANT'S MOTION TO REOPEN, LIFT STAY, AND AWARD ATTORNEY FEES (ECF NO. 87)

          AVERN COHN, UNITED STATES DISTRICT JUDGE

         I. Introduction

         This is a patent case. In 2013, [1] plaintiff GII Acquisition, LLC (GII) sued defendant Cybernet Systems, Inc. (Cybernet) claiming infringement of U.S Patent No. 7, 403, 872 (the ‘872 patent) titled “Method and System for Inspecting Manufactured Parts and Sorting Inspected Parts.” As will be explained, the case was stayed pending proceedings in the PTO. Following those proceedings, the Court entered an order closing the case without prejudice. (ECF No. 85).

         Before the Court is Cybernet's motion to reopen the case, lift the stay, and award attorney fees. For the reasons that follow, the motion is DENIED.

         II. Background

         In 2013, GII sued Cybernet, asserting that Cybernet made, used, sold and offered for sale an Automated Tactical Ammunition Classification system (“ATAC system”) that infringed the ‘872 patent. In its answer, Cybernet denied infringement and asserted that it was manufacturing and selling the accused ATAC system years before GII filed the application for the ‘872 patent and therefore denied infringement. Cybernet also asserted that the ‘872 patent was improperly issued by the PTO because GII failed to cite to Cybernet's patent application for its accused ATAC system when it originally applied to the PTO for its ‘872 Patent.

         After the complaint was filed, the parties engaged in discovery which included the filing of discovery related motions. The motions were referred to the magistrate judge.

         Meanwhile while the parties battled in discovery, and seven months after the complaint was filed, Cybernet submitted an ex parte request to the PTO for re-examination of the ‘872 Patent. Eventually, the PTO granted the request for re-examination. At that point, approximately nine months after the complaint was filed, the Court, on Cybernet's motion, stayed the case pending reexamination. (ECF No. 77). During re-examination, the PTO invalidated all of the asserted claims. GII appealed within the PTO and to the Federal Circuit, but eventually abandoned its appealed in the Federal Circuit. Although not entirely clear, it appears the parties settled the case as GII states it “chose to pursue settlement rather than incur the costs and risks associated with appeals.” (ECF No. 90 Page.ID.1996).

         After the stay was entered, the case was reassigned to the undersigned. In 2014 and 2016, the Court held a couple of status conferences with the parties. One of the conferences in 2016 indicates it was a settlement conference. Almost two years passed with neither party taking any action; the case lingered on the Court's docket. Eventually, on July 10, 2018, the Court entered an order closing the case without prejudice. The order provides in pertinent part:

Counsel have replied that there is no objection to the case being dismissed as long as post judgment motions could be submitted regarding attorney fees and costs.

(ECF No. 85 PageID.1814).

         Over a year later, Cybernet filed the instant motion to reopen the case, lift the stay, and attorney fees. Cybernet says this is an exceptional case and asks for an award of $250, 000.00 in attorney fees.

         III. Discussion

         GII opposes Cybernet's fee request on several grounds, [2] which ...


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