Attorney’s Fees & Sanctions

Judicial Reprimand Serves as Cautionary Tale for Litigants Everywhere

Order Denying Motion to Establish Claim Construction Procedure and to Show Cause Re Sanctions, Seven Networks LLC v. Google LLC, E.D. Tex. (July 19, 2018) (District Judge Rodney Gilstrap)

On July 19, 2018, Eastern District of Texas Judge Rodney Gilstrap issued a scathing order in response to a motion by Google LLC to “establish” a procedure for resolving claim construction disputes. Problematically for Google, its motion came nearly two months after the Court issued an order on the procedure for claim construction, three weeks after claim construction briefing began, and only two days before Google filed its responsive claim construction brief. The Court emphasized repeatedly that Google’s motion “demonstrates a serious disregard for [the] Court’s Rules, Orders, and its authority to control its own docket.” The Court also noted that the plaintiff’s actions contributed to the problem and ordered both parties and their counsel to appear on August 7, 2018 to show cause why they should not be sanctioned. The Court’s order is a cautionary tale for litigants and counsel in all cases about the importance of strictly following a court’s rules and procedures, and a reminder that it is the court—not parties or counsel—that controls the case. READ MORE

Attorneys’ Fees and Exceptionality: Two Perspectives from Recent Cases

Memorandum Opinion and Order Denying Attorneys’ Fees Award, Effective Exploration, LLC v. Bluestone Natural Resources II, LLC, No. 2:16-cv-00607-JRG-RSP, E.D. Tex. (January 18, 2018) (Judge Roy S. Payne)

Order Granting, in Part, Motion for Attorneys’ Fees and Costs And Ordering Supplemental Briefing, Lyda v. CBS Interactive, Inc., No. 16-cv-06592-JSW, N.D. Cal. (January 24, 2018) (Judge Jeffrey S. White)

An inventor or company facing patent prosecution from a non-practicing entities (NPE) with borderline frivolous claims has a difficult tactical choice. On the one hand, defending to judgment may serve to deter further NPE suits. On the other, it may be more cost effective to quickly settle nuisance NPE litigation. While this decision turns on a number of factors, one significant concern will always be the likelihood of securing attorney’s fees to make up for the cost of defending the litigation. As the Supreme Court announced in Octane Fitness, 134 S. Ct. 1749, 1756 (2014), the test for awarding attorneys’ fees is whether the opposing party’s conduct has been exceptional, based on the totality of the circumstances. In this post, we examine two recent cases that illustrate what this standard looks like in practice. READ MORE

To Avoid Attorneys’ Fees, Support Your Trial Arguments

Genes Industry, Inc. v. Custom Blinds and Components, Inc., Case No. SACV 15-0476 AG (C.D. Cal. Jan. 29, 2018 Order Re Plaintiff’s Motion for Enhanced Damages and/or Attorneys Fees and Costs).  

The standard for determining when a patent litigation is an “exceptional case” under 35 U.S.C. § 285 such that an award of attorneys’ fees is justified is a deliberately discretionary, open-ended one. Under the Octane Fitness standard, an exceptional case is one that stands out from others with respect to either the substantive strength of a party’s litigating position or the unreasonable manner in which a party conducted itself during the litigation. This opinion provides several guideposts in terms of conduct that should be avoided. READ MORE

“[L]ess-than-vigorous effort” Not Sufficient to Avoid Order Granting Attorneys’ Fees

Order Granting Defendant’s Motion for Attorneys’ Fees, Opal Run LLC, v. C&A Marketing, Inc., E.D. Tex. (November 29, 2017) (Magistrate Judge Roy S. Payne)

By now, courts have made clear that patent owners thinking about filing suit must carefully investigate their claims prior to filing suit and must litigate fully, or else face a potential order granting attorneys’ fees to the other side. But some plaintiffs, including the one in Opal Run, seem to still have not gotten that memo. 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.