The US District Court for the Eastern District of Texas last month awarded (subscription required) just under $180,000 in attorneys' fees to the defendant in a patent infringement case because the plaintiff failed to perform a pre-filing investigation into the merits of its claims.
WPEM, LLC sued SOTI Inc. alleging it infringed a patent for a method and system of delivering company legal and safety information to mobile devices based on the device's GPS location. WPEM had discovered a user manual for version 11 of SOTI's technology on the internet and filed suit on the belief that the technology infringed its asserted patent. SOTI answered that WPEM's patent was invalid in view of version 10 of SOTI's technology, which predated WPEM's patent.
After settlement negotiations during which SOTI spurned each of WPEM's gradually reduced demands, WPEM filed a motion to dismiss its own complaint, requesting each party bear its own fees and costs. SOTI responded by requesting attorneys' fees pursuant to 35 U.S.C. § 285. Under that statute, a court may award fees to the prevailing party in exceptional cases, considering such factors as frivolousness, motivation, objective unreasonableness, considerations of compensation and deterrence, and bad faith. Octane Fitness, LLC v. Icon Health & Fitness, Inc., 572 U.S. 545, 554 n.6 (2014); Comput. Docking Station Corp. v. Dell, Inc., 519 F.3d 1366, 1379 (Fed. Cir. 2008).
The court found WPEM's claims were frivolous because SOTI's technology was clearly invalidating prior art for WPEM's patent. It further found the litigation was unreasonable because WPEM would have discovered the underlying facts if it had performed "even a minimally diligent infringement investigation." The version 11 user manual gave "clear notice of the existence [of] other versions of the Accused Technology," and WPEM could easily have found these versions by clicking a link. The court did not question the plaintiff's good-faith belief, but that was "not a substitute for conducting an adequate pre-filing investigation."
Because the plaintiff "conducted absolutely no pre-filing investigation into the validity or enforceability of the Asserted Patent," the prevailing defendant was awarded reasonable attorneys' fees. The plaintiff has appealed the order to the Federal Circuit.
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