November 9, 2017
A recent Delaware Business Court Insider story by Tom McParland, “Samsung Opposes Fees in ‘Duplicative’ Suit, Citing Appeal” reports that Samsung Electronics Co. Ltd. this week told a federal judge in Delaware that any decision on Imperium IP Holdings’ motion for sanctions for having to defend a “duplicative” suit should be delayed pending an appeal to the U.S. Court of Appeals for the Third Circuit.
In a 23-page filing, Samsung said Tuesday that a decision from the appeals court could moot Imperium’s request for $247,000 in the case, which followed a $20 million patent infringement ruling against Samsung in a Texas federal court. Last month, U.S. District Judge Mark A. Kearney dismissed Samsung’s second-filed case in Delaware and criticized the electronics giant for “duplicating” the earlier litigation in order to attack the result in the U.S. District Court for the Eastern District of Texas.
“We are not the court of appeals for the Texas district court. Samsung cannot argue here what it already lost in Texas,” Kearney, visiting from the Eastern District of Pennsylvania, wrote in an Oct. 10 memorandum opinion.
Imperium filed its motion for attorney fees two weeks later, arguing that Samsung’s “bad-faith” tactics had qualified the case as exceptional under U.S. patent law. The court, Imperium said, also had the authority to award fees based on Samsung’s decision to “unreasonably and vexatiously” multiply proceedings.
On Tuesday, Samsung notified Kearney that it was appealing the Oct. 10 order and asked that consideration of motion for attorney fees be deferred until after the Third Circuit could weigh in. Even then, Samsung said, the “exceptional” designation did not apply to a breach-of-contract suit, and Imperium had failed to prove bad faith conduct that would trigger the court’s discretion in granting sanctions.
“Samsung and Imperium have been engaged in hard-fought litigation for over three years, and Samsung’s filing and prosecution of this action in good-faith reliance on the forum selection clause is nothing more than vigorous advocacy,” attorneys for the company wrote. ”Awarding attorneys’ fees under these circumstances will only serve to promote what courts strive to avoid: a chilling effect on an attorney’s legitimate ethical obligation to represent clients zealously.”
As of Wednesday, Samsung’s appeal was not yet registered on an online docket-tracking service, though court documents showed Samsung’s counsel had made the applicable payments associated with the appeal.
The Delaware suit stemmed from a heated lawsuit in the U.S. District Court for the Eastern District of Texas, where Imperium won a roughly $7 million jury verdict against Samsung for infringing patents for taking photos with an electronic device.
U.S. District Judge Amos L. Mazzant III of the Eastern District of Texas last year tripled the damages in the case, after finding Samsung had willfully infringed and repeatedly lied under oath. Samsung, Mazzant found, had known about Imperium’s patents for years and even tried to buy them through a broker before the case began in 2014.
Samsung has appealed those rulings to the U.S. Court of Appeals for the Federal Circuit.
Samsung filed its Delaware suit back in November 2015, 18 months after Imperium had sued in Texas. In court filings, the company alleged that Imperium had violated an earlier agreement not to sue over the patents, but former U.S. District Judge Sue L. Robinson of the District of Delaware stayed the case while the Texas litigation proceeded.
Robinson’s stay was lifted in 2015, and the electronics giant filed a complaint alleging that Imperium had breached its contractual obligations by bringing its patent infringement claim and seeking ongoing royalties in Texas. The company argued that if the Delaware court declined to hear the merits of its claims, the merits of its arguments would never be heard.
In dismissing the complaint, however, Kearney said those issues were already up for appeal before the Federal Circuit.
“Samsung’s defenses, now dressed up as affirmative claims, do not belong in this second-filed case,” he wrote. “It is litigating these issues before the United States Court of Appeals for the Federal Circuit. We decline to jump into a dispute fully litigated before Judge Mazzant.”
The case is Samsung Electronics v. Imperium IP Holdings.