Addressing attorneys' fees in the context of a breach of
contract claim, the US Court of Appeals for the 11th Circuit
reversed the district court's limited award of attorneys'
fees, finding the award inconsistent with the express language of
the contract between the parties. Yellow Pages Photos, Inc. v.
Ziplocal, LP, Case No. 16-11868 (11th Cir., Jan. 24, 2017)
Yellow Pages Photos, Inc., (YPPI) and Ziplocal LP entered into a
contract that provided Ziplocal with a license to a series of
YPPI's stock photographic images and subject matter headings.
YPPI eventually sued Ziplocal for breach of contract and copyright
infringement, alleging that Ziplocal provided YPPI's licensed
photographs to a third party without YPPI's permission. The
jury found in YPPI's favor on both the breach of contract and
copyright infringement claims. Although YPPI was the prevailing
party and was entitled to recover fees and costs under its contract
with Ziplocal, the district court substantially reduced YPPI's
request for attorneys' fees to reflect YPPI's relative
degree of success in the litigation, and also found that YPPI was
not entitled to recover attorneys' fees related to its
copyright infringement claims. The district court made similar
adjustments to YPPI's award of nontaxable costs. YPPI appealed
to the 11th Circuit.
The 11th Circuit reversed, finding that the district court erred
by not awarding fees for the copyright infringement claims. As the
11th Circuit explained, the copyright infringement claims arose
directly out of the contract between YPPI and Ziplocal. As such,
these claims fell within the scope of the attorneys' fees
provision in the contract between YPPI and Ziplocal, which
expressly contemplates the award of fees based on litigation
"in conjunction with the use of the product." According
to the 11th Circuit, the language of the contract is broad enough
to cover YPPI's copyright infringement claims, and YPPI is
entitled to reasonable attorneys' fees for that claim.
The 11th Circuit also found that the district court erred by
substantially reducing the award of attorneys' fees, because
the district court used a strictly mathematical approach based on a
ratio of total claims to successfully litigated claims. This
strictly mathematical approach failed to adequately take into
account all relevant factors, such as the intention of the
contract, and was improperly based on the application of a
proportional modifier representing the degree of success YPPI
enjoyed at trial. The contract between YPPI and Ziplocal explicitly
entitles the winning party to recover "its attorney's fees
and costs," without limiting the recovery of fees to a
"reasonable" amount. This contract language suggests a
full recovery of the fees expended in the litigation related to the
contract. By reducing YPPI's attorneys' fees by more than
90 percent, the district court denied YPPI the benefit of its
bargain, essentially rendering the contract's fee-shifting
Similarly, the 11th Circuit found that the district court abused
its discretion by applying the same mathematical approach to the
award of nontaxable costs. Eleventh Circuit precedent has
established that shifting costs in favor of the prevailing party is
appropriate even in the case of a nominal award, so long as the
prevailing party "obtains judgment on even a fraction of the
claims advanced." Although a reduction in costs can be
justified on the grounds of minimal success, such justification is
not met through the rote application of a mathematical formula, as
in this case. For the above reasons, the 11th Circuit reversed the
district court and remanded the case for further proceedings not
inconsistent with its opinion.
In Wasica Finance GmbH v. Continental Automotive Systems, Inc., No. 15-2078 (Fed. Cir. 2017), the patentee Wasica Finance discovered, among other things, the importance of using consistent terminology in the patent specification and claims.
While under attack for several years now, the patent infringement defense of laches was dealt a serious, and likely final, blow by the recent Supreme Court case of SCA Hygiene Products AB et al. v. First Quality Baby Products LLC et al.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
On April 6, 2017, the Federal Circuit reversed-in-part and affirmed-in-part the district court's judgment of infringement and summary judgment for non-infringement of The Medicines Company's ("MedCo") patents-in-suit.
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