Attorney’s Fees & Sanctions

Unwillingness of Plaintiff to Test Merits of Claims Tests Court’s Patience

Shipping and Transit, LLC v. Hall Enterprises, Inc., C.D. Cal. (July 5, 2017) (Judge Andrew J. Guilford)

Plaintiff Shipping & Transit, LLC (“S&T”) is a non-practicing entity that filed hundreds of patent lawsuits in 2016 alone, alleging infringement of three patents directed to monitoring and reporting the location of a vehicle. One of these patents was asserted in more than 400 cases, and the other two patents were asserted in more than 90 cases. However, S&T would routinely settle or dismiss a case with prejudice prior to a ruling on the merits where a defendant challenged the validity of the patents.

In this case, Defendant Hall Enterprises, Inc. asked S&T to voluntarily dismiss the case due to perceived patent validity issues. After S&T refused, Hall Enterprises moved for judgment on the pleadings arguing that all of the claims asserted against it were invalid under 35 U.S.C. § 101 due to ineligible subject matter. Only then did S&T move to dismiss its own claims with prejudice. READ MORE

Did the Defendant Know? Filing a Complaint Can Sustain the Knowledge Element Required to Maintain a Claim of Induced Infringement

Order Granting Motion to Dismiss and Denying Request for Attorneys’ Fees and Sanctions, Edwin Lyda v. CBS Interactive, Inc., Case No. 16-cv-06592-JSW (Judge Jeffrey S. White)

In a helpful ruling for defendants, Judge White held in a recent order that res judicata prevented a plaintiff from filing a complaint for alleged inducement of patent infringement after a prior suit for direct infringement was dismissed with prejudice.  He held that the filing of the original complaint provided a colorable basis to allege the knowledge element of an inducement claim, and thus there was nothing to prevent the pursuit of an inducement claim in the original case. READ MORE

Piracy Pays (The IP Owner) – Judge Whyte Grants Motion for Default Judgment After Awarding Sanctions in Unauthorized Software Distribution Case

Order Granting Motion for Default Judgment, Adobe Systems Inc. v. Software Tech, et al., Case No. 5:14-cv-02140-RMW (Judge Ronald M. Whyte)

Everyone in the software field (and probably every computer user) is familiar with Adobe and at least one of its products, including Acrobat and Photoshop. Popular software vendors like Adobe are often the victims of piracy and the unauthorized distribution of their products. As such, many have adopted policing measures like employing investigators to purchase products from third-party distributors to verify authenticity and proper licensing.  READ MORE

Fruitful Harvest of Attorneys’ Fees and Sanctions for Farmville Creator Zynga

Order Granting Motion for Attorneys’ Fees: Granting Motion in Part for Sanctions, Segan LLC v. Zynga Inc., Case No. 14-cv-01315-VC (Judge Vince Chhabria)

We previously reported on the Segan v. Zynga case when Judge Chhabria granted Zynga’s motion for summary judgement of non-infringement. Zynga, perhaps emboldened by the Supreme Court’s decision last year in Octane Fitness LLC v. Icon Health & Fitness Inc., 134 S. Ct. 1749 (2014), then moved to recover its attorneys’ fees, arguing that this was an “exceptional case” under 35 U.S.C. § 285. Judge Chhabria agreed. Zynga concurrently moved for sanctions against Segan’s law firm. Judge Chhabria granted that motion as well, but only in part. He levied a sanction of $100,000 against Segan’s law firm. In doing so, he sent a strong message to patentees that Rule 11 requirements are no mere game. READ MORE

The Fact That an Argument Is a Loser Is Not Enough to Make It Stand Out in a Crowd

Order Denying Defendant’s Motions for Sanctions and Attorney Fees, Kreative Power, LLC, v. Monoprice, Inc., Case No. 14-cv-02991-SI (Judge Susan Illston)

Little more than a year has passed since the Supreme Court articulated a more lenient standard for awarding fees in a patent case pursuant to 35 U.S.C. § 285.  In two unanimous rulings—Octane Fitness and Highmark—the Supreme Court threw out the old test, finding it was so demanding that it rendered Section 285 essentially meaningless, because it conflated a statutory award of fees with the Court’s inherent power to sanction.  READ MORE

No Means No

Blackberry Limited v. Typo Products, LLC, 14-cv-00023-WHO (Judge William Orrick)

Judge Orrick ordered Typo Products LLC last week to pay sanctions and attorneys’ fees to BlackBerry Limited for disobeying the court’s preliminary injunction order.

In March 2014, Judge Orrick enjoined Typo from distributing its add-on keyboard for the iPhone, which Blackberry alleged infringes its patents.  After that order Typo sold 1,908 keyboards to another reseller and 16,829 to customers outside the United States, provided 369 warranty replacements, and referred six customers to other third parties to buy the enjoined keyboards.  The court sanctioned Typo for these violations. READ MORE

September Recap

In September 2014, we started to see ND Cal judges applying the Supreme Court’s Alice Corp. decision to invalidate software patents under section 101. Also with her eye on Alice and other Supreme Court decisions, Hastings Professor Robin Feldman examines the ongoing dialogue between Supreme Court and Federal Circuit. ND Cal judges also used other means to kick out patent cases early, with Judges Illston and Chen each rejecting a declaratory judgment action for lack of sufficient ties to California. Stepping into discovery battles, Judge Tigar issued a decision on diligence and timing to amend infringement contentions, while Judge Illston criticized evasive deposition witnesses. And, in the endgame, Judge Wilken awarded attorneys’ fees to a copyright defendant in light of the plaintiff’s baseless claim and evidence of an improper motive.

Bringing a Baseless Copyright Claim Can be Costly: Judge Wilken Grants Defendant’s Request for Attorneys’ Fees

Order Granting In Part Defendant’s Motion for Attorneys’ Fee, Lewis v. Activision Blizzard, Inc., No. C 12-1096 CW (Judge Wilken)

Activision Blizzard, Inc. has had a memorable month. Along with its partner Bungie, on September 9, the company behind the wildly popular “Call of Duty” franchise of videogames introduced “Destiny,” a Massively Multiplayer Online (“MMO”) videogame reputed to have a $500 million budget – which, if true, makes it the most expensive videogame ever developed (and more expensive than cost of all three of the Lord of the Rings movies combined). While it remains to be seen whether and to what extent Destiny revolutionizes the videogame industry, Activision can at least take solace that Northern District Judge Claudia Wilken just awarded it a modest award of attorneys’ fees related to a dispute about its earlier successful franchise, “World of Warcraft” (commonly referred to in the gaming community as “WoW”).
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August Recap

In August 2014, we saw perhaps the first ND Cal decision awarding attorney’s fees under the Supreme Court’s Octane Fitness decision. Judge Illston based her exceptional case finding on the plaintiff’s lack of adequate pre-filing investigation and unreasonable litigation tactics. (Also interesting was her finding that plaintiff had waived attorney-client privilege by failing to adequately screen its document production.) Litigants were also reminded, however, that the recent Supreme Court decisions only help so much: finding that Akamai had been limited to the issue of indirect infringement, Judge Cousins barred a plaintiff from amending contentions to add a divided direct infringement theory.

Looking at threshold issues, Judge Chhabria transferred a case for insufficient ties to California while finding he had declaratory judgment jurisdiction when the patentee’s C&D letter identified accused features, even if it failed to name specific products. Meanwhile Judge Davila, consistent with prior practice, granted another stay pending a third-party IPR on the condition that defendants agreed to be bound by the same estoppel. Getting into merits issues, we saw a pair of decisions on expert reports, one by Judge Wilken applying Daubert and one by Judge Illston considering whether theories and evidence had been adequately disclosed during discovery. In addition, the Federal Circuit affirmed claim construction decisions by Judges Ware and Chen in Mformation Technologies v. RIM (also noted on Patently-O). And we’ll be getting more attention from the East Coast soon, as the Patent Office announced that its America Invents Act roadshow will be coming to Cupertino in October.

When It Rains, It Pours: Waiver of Privilege, Claim Disavowal, and on The Hook For Attorneys’ Fees.

Kilopass Technology Inc v. Sidense Corporation, No. C 10-02066 (Judge Susan Illston, August 12, 2014)

Judge Illston recently granted defendant Sidense’s motion for attorney’s fees under Section 285 of the Patent Act, which authorizes a district court to award attorney’s fees in patent litigation in exceptional cases.  While that itself is worth reporting, there are three other issues related to this order that are noteworthy as well: waiver of attorney-client privilege and taking an inconsistent claim construction position (as well as pursuing a belated infringement theory). READ MORE