A federal judge in the Eastern District of Virginia granted defendant Amazon.com, Inc.’s motion for attorneys’ fees under 35 U.S.C. § 285, ordering plaintiff Innovation Sciences, LLC to pay over $700,000 in fees that accrued after the court’s Markman order.
Plaintiff asserted 11 patents relating generally to methods of multimedia communications. The court found that eight of those patents claimed unpatentable subject matter and were invalid under 35 U.S.C. § 101. After claim construction the court granted defendant’s motions for summary judgment, finding that the defendant did not infringe one patent and that another was invalid under § 101. Plaintiff stipulated to noninfringement of the final remaining patent but reserved its right to appeal the claim construction issue. It later appealed.
The Federal Circuit affirmed the court’s summary judgment finding and all claim construction determinations but one. But because plaintiff had failed to articulate an infringement position under the affirmed claim constructions, the Federal Circuit had no choice but to remand the case. The parties eventually stipulated to dismissal and defendant moved for attorneys’ fees.
The court noted that an infringement case that is substantively weak when filed can become exceptional if claim construction renders the claims-at-issue baseless. Here, plaintiff’s case was initially weak—its claims relating to eight of the patents were dismissed because the patents were invalid under 35 U.S.C. § 101. But the case was not so extraordinarily weak as to be exceptional at inception. After the Markman order, however, plaintiff should have known that each remaining claim was baseless. Specifically, the court’s later invalidation of the claims of one patent was the “clear and necessary consequence of the claim construction.” And for the claims of the patent for which the court ultimately granted summary judgment of no infringement, plaintiff’s continued infringement theory directly contradicted the court’s Markman order. Instead of dismissing its claims based on these patents, plaintiff “avoided summary judgment by stipulating to noninfringement, proceeded to appeal without a viable theory of infringement, and then prolonged the case by insisting on remand—caused by [its] own lack of clarity and specificity in the stipulation—without an infringement theory.” Continuing to litigate was, thus, objectively unreasonable and the case was exceptional. The court therefore awarded attorneys’ fees pursuant to 35 U.S.C. § 285.
Practice Tip: In order for a party to recover attorneys’ fees, a case need not be exceptional at inception. A party should re-evaluate whether any asserted claims or defenses become baseless after potentially case dispositive events like claim construction.
Innovation Sciences, LLC v. Amazon.com, Inc., No. 1:16-cv-00861 (E.D. Va. Feb. 18, 2020) (Grady, J.)
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