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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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11 QUIDEL CORPORATION, Case No. 16-cv-3059-BAS-AGS 12 Plaintiff, ORDER DENYING 13 DEFENDANTS’ MOTION FOR

ATTORNEY FEES AND

14 v. SANCTIONS

15 SIEMENS MEDICAL SOLUTIONS [ECF No. 132] USA, INC., et al.,

16 Defendants.

17 18 Defendants Siemens Medical Solutions USA, Inc. and Siemens Healthcare 19 Diagnostics Inc. move for an award of attorneys’ fees and costs pursuant to 28 U.S.C. 20 § 1117(a) and for sanctions against Plaintiff Quidel Corporation and its counsel 21 pursuant to Federal Rule of Civil Procedure 11. (“Mot.,” ECF No. 132.) 22 I. BACKGROUND 23 An extensive background of this case can be found in the Court’s order on the 24 parties’ cross-motions for summary judgment. (See ECF No. 254.) 25 II. LEGAL STANDARD 26 A. 15 U.S.C. § 1117(a) 27 The Lanham Act permits an award of reasonable attorneys’ fees in 1 ‘exceptional’ [was] not defined in the statute, generally a trademark case [was] 2 exceptional for purposes of an award of attorneys’ fees when the infringement [was] 3 malicious, fraudulent, deliberate or willful.” Lindy Pen Co., Inc. v. Bic Pen Corp., 4 982 F.2d 1400, 1409 (9th Cir. 1993). In 2016, the Ninth Circuit in SunEarth, Inc. v. 5 Sun Earth Solar Power Co., Ltd., 839 F.3d 1179 (9th Cir. 2016), relied on the 6 Supreme Court’s decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 7 472 U.S. 545 (2014), to abrogate Lindy Pen Co. and modify the standard definition 8 of “exceptional” in attorney fee recovery Lanham Act cases. SunEarth, Inc., 839 9 F.3d at 1180. Ultimately, the Ninth Circuit held that “district courts analyzing a 10 request for fees under the Lanham Act should examine the ‘totality of the 11 circumstances’ to determine if the case [is] exceptional, exercising equitable 12 discretion in light of the nonexclusive factors identified in Octane Fitness and 13 Fogerty, and using a preponderance of the evidence standard.” Id. at 1181 (internal 14 citation omitted). These nonexclusive factors include: “frivolousness, motivation, 15 objective unreasonableness (both in the factual and legal components of the case) 16 and the need in particular circumstances to advance considerations of compensation 17 and deterrence.” Id. at 1181 (citation omitted). 18 An exceptional case as one that simply “stands out from others with respect to 19 the substantive strength of a party’s litigating position (considering both the 20 governing law and the facts of the case) or the unreasonable manner in which the 21 case was litigated.” Id. at 1180 (citation omitted). The determination of 22 “exceptional” falls squarely within the discretion of the trial court. Highmark Inc. v. 23 Allcare Health Mgmt. Sys., Inc., 572 U.S. 559, 563 (2014). 24 B. Rule 11 25 Under Rule 11, any “pleading, written motion, or other paper” presented “to 26 the court” must contain “factual contentions” with “evidentiary support” or must 27 “likely have evidentiary support after a reasonable opportunity for further” 1 to be “exercised with extreme caution.” Operating Engineers Pension Trust v. A-C 2 Co., 859 F.2d 1336, 1345 (9th Cir. 1988). 3 III. ANALYSIS 4 Defendants believe this case is exceptional because Plaintiff’s claims are 5 frivolous and stem from a wrongful motivation. Defendants argue this case 6 epitomizes the “type of baseless litigation that should be discouraged.” (Mot. at 23.) 7 Both parties recently moved for summary judgment in their favor. The Court 8 granted Defendants’ motion in part, finding no evidence that any laboratories were 9 deceived or likely to be deceived by Defendants’ allegedly false advertisements. But 10 the Court found a genuine question of material fact existed as to whether the 11 statements at issue are false, and further issues as to whether physicians are a part of 12 the relevant market and whether they were deceived by the allegedly false statements. 13 Both parties have submitted plausible evidence on these issues. See Sophia & Chloe, 14 Inc. v. Brighton Collectibles, Inc., No. 12-CV-2472-AJB-KSC, 2019 WL 1429588, 15 at *10 (S.D. Cal. Mar. 29, 2019) (finding courts have denied attorney’s fees “when a 16 plaintiff's ‘position . . . was not unreasonably or exceptionally weak” and it 17 “submit[ted] evidence of some actual confusion from customers” (citing cases)). 18 Therefore, the Court declines to find that Plaintiff’s case is frivolous or 19 objectively unreasonable. The Court exercises its discretion in light of the totality of 20 the circumstances and finds that this case is not exceptional warranting attorney’s 21 fees under the Lanham Act. For the same reasons, the Court also declines to award 22 fees under its “inherent authority,” as Defendants request in the alternative. (Mot. at 23 25.) 24 Further, Defendants argue they should be awarded sanctions because 25 Plaintiff’s counsel knowingly presented false allegations to the Court. (Id. at 24.) 26 As noted above, Plaintiff has presented evidence in support of its case, and the Court 27 finds that various issues of material fact still exist. The imposition of sanctions is 1 legally unreasonable or without legal foundation.” Operating Engineers, 859 F.2d 2 |jat 1344. At this point, the Court does not find this to be one of those cases, and the 3 ||Court does not find Plaintiff’s counsel’s conduct sanctionable.' 4 CONCLUSION 5 For the foregoing reasons, the Court DENIES WITHOUT PREJUDICE 6 ||Defendants’ Motion. (ECF No. 132.) 7 IT IS SO ORDERED. /| , ) 8 || DATED: October 21, 2019 nisi dg Sasha 6

9 United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ||! In its Opposition, Plaintiff requests Defendants be sanctioned for filing the present Motion. (ECF No. 172, at 25.) Plaintiff requests reimbursement for its expenses spent responding to the Motion. 27 motion for sanctions must be made separately from any other motion... .” Fed. R. Civ. P. 28 11(c)(2). Plaintiff did not file a separate motion for sanctions, and only dedicated one paragraph of its opposition to its request. Thus, its request is improperly presented.