Blair v. Alstom S.A.

Background

Scott Blair alleged that Alstom Transportation, Inc. and Kawasaki Rail Car, Inc. infringed 28 claims of his U.S. Patent No. 6,700,602, concerning video-display systems mounted in subway cars. He sought damages for alleged infringement involving railcars manufactured, offered for sale, or sold by the defendants. Alstom later settled with Blair and was dismissed with prejudice, with each side paying its own attorney fees and costs.

Kawasaki challenged the patent claims in two proceedings before the Patent Trial and Appeal Board. The Board found all challenged claims unpatentable, and the Federal Circuit summarily affirmed the decision in the first proceeding. Blair did not appeal the decision in the second proceeding. The district court had stayed the case while those proceedings were pending.

Judgment on the Pleadings

Kawasaki moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). The court explained that this motion uses the same standard as a motion to dismiss for failure to state a claim: the court accepts the opposing party’s factual allegations as true but determines whether the pleadings support a legally viable claim.

The court held that all 28 patent claims Blair asserted in the case had been cancelled or otherwise found unpatentable. Because Blair’s amended complaint relied only on those claims, the complaint no longer stated a claim and the infringement case was moot. The court therefore granted Kawasaki’s motion for judgment on the pleadings and dismissed the amended complaint as moot.

Blair suggested adding claim 10, which he had not asserted in his complaint or infringement contentions and which Kawasaki had not challenged in the patent-board proceedings. The court denied leave to amend. It found the proposed addition untimely and prejudicial because Kawasaki had relied on Blair’s prior representations about which claims were at issue. The court also stated that adding claim 10 might be futile because it depended on claims that had been cancelled and appeared closely related to cancelled claim limitations.

Attorney Fees and Costs

Kawasaki sought attorney fees and non-taxable costs under 35 U.S.C. § 285, arguing that it was the prevailing party and that the case was exceptional. The court agreed that Kawasaki was the prevailing party because the dismissal changed the legal relationship between the parties in Kawasaki’s favor. However, the court found that the case was not exceptional. It concluded that Blair had a non-frivolous basis for believing the claims were patentable, and that his decision to appeal the first patent-board decision and continue contesting the second proceeding was within the bounds of reasonable litigation strategy. The court therefore denied Kawasaki’s request for attorney fees and non-taxable costs.

Kawasaki also sought taxable costs under Federal Rule of Civil Procedure 54(d), including $33,544 for transcripts and copying and document-production expenses. The court held that Kawasaki was entitled to taxable costs but did not resolve Blair’s specific objections at that stage. It directed Kawasaki to submit a bill of costs to the Clerk within the time required by the local rule, after which the parties could challenge the Clerk’s taxation decision.

Disposition

Judge Paul A. Engelmayer granted Kawasaki’s motion for judgment on the pleadings, dismissed the amended complaint as moot, denied leave to amend, denied Kawasaki’s request for attorney fees and non-taxable costs, and awarded Kawasaki taxable costs to be tabulated by the Clerk. The court directed the Clerk to terminate the motion and close the case.