IN THE UNITED STATES DISTRICT COURTFOR THE MIDDLE DISTRICT OF TENNESSEENASHVILLE DIVISIONOLE K. NILSSEN and )GEO FOUNDATION, LTD., ))Plaintiffs, ))v. ) Case No. 3:04cv0080)UNIVERSAL LIGHTING TECHNOLOGIES, INC., ) Judge Thomas A. Wiseman, Jr.)Defendant. )MEMORANDUM AND ORDER

Before the Court are two motions filed by defendant Universal Lighting Technologies, Inc.(“ULT”): a Motion for Attorneys’ Fees (Doc. No. 186) and (2) a Supplemental Motion for Attorneys’ Fees(Doc. No. 191).

I. LEGAL STANDARDS

ULT seeks attorneys’ fees in this action pursuant to 35 U.S.C. § 285, which permits courts toaward fees to the prevailing party in a patent action, but only in “exceptional cases.” The statute states infull: “The court in exceptional cases may award reasonable attorney fees to the prevailing party.”

Id.

Plaintiffs oppose the motion, contending both that this case lacks the requisite “exceptionality” and that,even if it does qualify as an exceptional case, this Court should exercise its discretion to deny the motion.A trial court is to undertake a two-step inquiry when adjudicating a request for attorney fees under§ 285. First, the court determines whether there is clear and convincing evidence that the case isexceptional; if so, the court then considers whether, in the exercise of its discretion, an award of attorneyfees to the prevailing party is warranted.

Cybor Corp. v. FAS Techs., Inc.

, 138 F.3d 1448, 1460 (Fed. Cir.1998) (

en banc

);

J.P. Stevens Co. v. Lex Tex Ltd.

, 822 F.2d 1047, 1050 (Fed. Cir. 1987). The trial court’sfinding that a case is “exceptional” is a factual determination reviewed for clear error. The subsequentdetermination of whether attorneys’ fees are warranted lies within the district court’s sound discretion.

See, e.g.

Nilssen v. Osram Sylvania, Inc.

, 528 F.3d 1352, 1357 (Fed. Cir. 2008);

nCube Corp. v.Seachange Int’l, Inc.

, 436 F.3d 1317, 1319 (Fed. Cir. 2006);

Cybor Corp.

, 138 F.3d at 1460. Factors that

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2may demonstrate that a case is “exceptional” include willful infringement, bad faith, litigation misconduct,and unprofessional behavior.

Sensonics, Inc. v. Aerosonic Corp.

, 81 F.3d 1566, 1674 (Fed. Cir. 1996).In addition, “inequitable conduct may constitute a basis for an award of attorney fees under 35U.S.C. § 285.”

Osram

, 528 F.3d at 138 (quoting

A.B. Chance Co. v. RTE Corp.

, 854 F.2d 1307, 1312(Fed. Cir. 1988)). As the Federal Circuit noted in its recent

Osram

holding, however, “there is no

per se

rule of exceptionality in cases involving inequitable conduct.”

Osram

, 528 F.3d at 138. The court furtherrecognized that it had on many occasions affirmed a district court’s denial of attorney fees in casesinvolving inequitable conduct, and had likewise affirmed the courts’ decisions to award attorney fees onthe basis of inequitable conduct.

Id.

(collecting cases and stating, “In short, our case law provides widediscretion to district courts; courts may award attorney fees in inequitable conduct cases, but are notrequired to do so.”).The Federal Circuit has also made it clear that a prior finding of inequitable conduct by a differentcourt in an action involving the same plaintiff and the same patents will have a preclusive effect insubsequent proceedings. In

Upjohn Co. v. Mova Pharm. Corp.

, 31 F. Supp. 2d 211 (D.P.R. 1998), a jurydetermined that the defendant had proved by clear and convincing evidence that the subject patent wasinvalid as obvious under 35 U.S.C. § 103, and unenforceable due to the plaintiff’s inequitable conduct.Upjohn subsequently filed a motion for judgment as a matter of law (“JMOL”) or, alternatively, for a newtrial. While that motion was pending, a different district court in a different case involving the sameplaintiff granted summary judgment for the defendant, based in part upon its collateral application of the

Mova

judgments of invalidity and unenforceability. The Federal Circuit affirmed.

Pharmacia & Upjohn Co. v. Mylan Pharm., Inc.

, 170 F.3d 1373 (Fed. Cir. 1999) (“

Mylan I

”). After the

Mova

district court deniedthe JMOL motion, the

Mylan

district court denied the defendant’s motion for attorney fees, expresslyfinding that the plaintiff’s litigation tactics were in good faith and raised genuine issues of patentinfringement. It therefore found that the case was not an exceptional one meriting a fee award.

Pharmacia & Upjohn Co. v. Mylan Pharm., Inc.

, No. 1:97-CV-41 (N.D. W. Va. Aug. 17, 1998). Thedefendant appealed the district court’s denial of its motion for attorney fees, arguing that the district courthad erred in failing to consider the outcome of

Mova

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3The Federal Circuit agreed, and reversed and remanded for reconsideration of whether the casewas exceptional in light of the

Mova

court’s finding that the plaintiff had engaged in inequitable conduct.

Pharmacia & Upjohn Co. v. Mylan Pharmaceuticals, Inc.

, 182 F.3d 1356 (Fed. Cir. 1999) (“

Mylan II

”). Thecourt specifically noted that its precedent in patent cases “establishes that inequitable conduct is asubstantive patent issue that must be taken into consideration in determinations under 35 U.S.C. § 285.”

Mylan II

, 182 F.3d at 1359. It continued:Here, a judgment of inequitable conduct has already been made by a court of competent jurisdiction. As a matter of law, we hold that such a judgment must be considered inascertaining whether a case is exceptional under 35 U.S.C. § 285. Accordingly, wevacate and remand for consideration of whether this is an exceptional case in view of the judgment in

Mova

Id.

at 1360 (footnote omitted). Notably, the appellate court did not hold that the district court

must

reacha finding of exceptionality based upon the prior judgment that the plaintiff had engaged in inequitableconduct; rather, the district court was simply required to take that factor into consideration in determiningwhether the case qualified as exceptional.

II. FACTUAL AND PROCEDURAL BACKGROUND

In a prior unrelated opinion issued in a different district in a case brought by the same plaintiff,Ole K. Nilssen, and based in part upon the same patents at issue here, the court found that Nilssen hadengaged in inequitable conduct and, as a result that the patents in suit were unenforceable.

Nilssen v.Osram Sylvania, Inc.

, 440 F. Supp. 2d 884 (N.D. Ill. 2006),

aff’d

, 504 F.3d 1223 (Fed. Cir. 2007) (“

Osram I

”). Based on

Mylan II

, it is clear that the district court’s holding in that case has preclusive effect here,such that this Court must acknowledge that Nilssen engaged in inequitable conduct in prosecuting thepatents that were also at issue in this case. In a subsequent opinion, the Northern District of Illinois alsogranted the defendant’s motion for attorneys’ fees on the grounds that the case before it was exceptionalfor purposes of 35 U.S.C. § 285.

Nilssen v. Osram Sylvania, Inc.

, No. 01 C 3585, 2007 WL 257711 (N.D.Ill. Jan. 23, 2007),

aff’d

, 528 F.3d 1352 (Fed. Cir. 2008) (“

Osram II

”). In granting the motion for fees, thedistrict court noted that Nilssen had been found to have engaged in five types of inequitable conduct,including “(1) misclaiming small entity status and improperly paying small entity fees; (2) failing to discloseongoing, related litigation; (3) misclaiming priority to earlier filing dates; (4) withholding material prior art;and (5) submitting misleading affidavits to the PTO during patent prosecutions.”

Id.

at *8. In addition, the

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