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Category: Practice Area: IP Litigation

Federal Circuit Asked in Toss Fee Award to Apple, Cisco

October 15, 2020

A recent Law 360 story by Britain Eakin, “Fed. Circ. Asked To Nix Alsup’s Fee Award to Apple, Cisco,” reports that saying its infringement suit against Apple and Cisco was reasonable, a tech company told the Federal Circuit that U.S. District Judge William Alsup wrongly determined the case was exceptional and abused his discretion by awarding them $4.2 million in fees.  In a brief, Straight Path IP Group LLC said the district court departed from an agreed-upon claim construction in granting summary judgment of non-infringement to Apple and Cisco.  It argued that as a result, Federal Circuit precedent requires it to reverse Judge Alsup's finding of exceptionality, which is required for a prevailing party in a patent dispute to get fees.

"Where a plaintiff asserts infringement under a claim construction and the district court subsequently clarifies or modifies that construction in granting summary judgment of non-infringement, this court holds that the case is not exceptional, and that a district court abuses its discretion by granting a motion for attorney's fees," Straight Path said.  In determining whether a case is exceptional, a district court considers things like whether a suit was frivolous or if a party's case was unreasonable.

Straight Path contended that it provided plenty of evidence that its case was reasonable, including a declaration from former U.S. Chief Circuit Judge Paul Michel.  The former judge testified at the district court that Straight Path had "asserted an objectively reasonable view of infringement" under the agreed-upon claim construction, which he said was supported by evidence.  While Judge Alsup called Straight Path's litigation position "a slick maneuver," the company argued in its brief that "Chief Judge Michel's view far more accurately characterized this case."

"Whether ultimately correct or not, Straight Path respectfully submits that if Chief Judge Michel concluded that the litigating position was reasonable, that is strong evidence that the litigating position was reasonable," the brief said.  Straight Path said the appeals court need not probe why Judge Alsup deemed the case an exceptional one "in such brash tones."  "It is enough to recognize that the district court's determination of exceptionality runs afoul of the limits this court has placed on the district court's discretion, and must therefore be reversed," Straight Path said.

The fee dispute between the parties has been a lively one, sparking fireworks in the courtroom during a May 7 hearing when Judge Alsup scolded Apple and Cisco for initially requesting $10 million in fees after beating the suit nearly three years ago.  The judge said the tech giants "played games," used "abusive" tactics and were motivated by "greed, G-R-E-E-D."

He required them to resubmit their fee bids and appointed a special master to determine a reasonable amount of fees and costs. On May 19, the court awarded Cisco $1.9 million — half of its initial request — while Apple netted $2.3 million of its initial $3.9 million ask.  In its brief, Straight Path — now known as SPIP Litigation Group LLC — noted that the claim construction the parties had agreed to was signed off on by the Federal Circuit when Straight Path successfully appealed Patent Trial and Appeal Board decisions invalidating various claims in the patents, which Cisco and others challenged after Straight Path initially sued in 2014.

PTAB: Inability to Pay Fees No Reason to Deny IPR

September 20, 2020

A recent Law 360 story by Britain Eakin, “PTAB Says Inability To Pay Legal Fees No Reason To Deny IPR,” reports that the Patent Trial and Appeal Board has agreed to review Dareltech LLC's "selfie stick" patent, rejecting the company's argument that since it can't afford to pay for counsel, Microsoft's inter partes review challenge should be denied.  The decision instituting IPR, the board said Dareltech's inability to pay to defend its patent doesn't qualify as a reason for the board to exercise its discretion to deny review, as the company had argued.

"Patent owner's current financial circumstances are not sufficient reason to preclude petitioner from pursuing its statutory rights to challenge the patentability of the claims," the decision said.  Dareltech had asserted that its lead counsel doesn't participate in post-grant matters, and that its backup counsel had been representing the company in other matters pro bono, but is unable to devote the time and resources to this IPR.

Additionally, Dareltech argued that it incurred expenses to prosecute the patent family, develop and commercialize the claimed invention without significant revenue and defend related IPRs, and so the board should deny review.  But the board was unmoved.  The PTAB also shot down Dareltech's argument that the board should deny the petition because it has no district court dispute with Microsoft, which it contends is acting as a proxy for Chinese technology company Xiaomi.

 

 

Federal Circuit Grants Attorney Fees in ‘Demeaning’ Goat IP Case

September 10, 2020

A recent Law 360 story by Tiffany Hu, “Fed. Circ. Grants Atty Fees in ‘Demeaning’ Goat IP Case, reports that the Federal Circuit ordered a New York attorney to pay legal fees after the U.S. Supreme Court refused to take up his challenge to a restaurant's registered trade dress that he personally found "demeaning" to goats.  In a nonprecedential order, a three-judge panel found that Queens-based attorney Todd M. Bank owes $28,523 in attorney fees to Al Johnson's Swedish Restaurant & Butik in his attempt to invalidate the restaurant's trade dress for goats on a grass-covered roof.

The fee order comes after the high court in June denied a certiorari petition filed by Bank, in which he argued that the Federal Circuit incorrectly found that his personal concern that the mark was "demeaning" to goats did not give him standing to challenge the trade dress.  "What can I say when the same judges who wrongly sanctioned me proceed to ignore all of the arguments that I made in response to the defense counsel's fee application, and instead abuse their power by ruling by fiat?"  Bank, who represented himself, told Law360 in an email.

Katrina G. Hull of Markery Law LLC, an attorney for the restaurant, said in an email that she and her client were "pleased with the court's order."  Al Johnson's Swedish Restaurant, which is based in Sister Bay, Wisconsin, was issued a registration in 1996 for a trade dress that "consists of goats on grass roofs," according to filings.

In 2011 and 2012, Bank petitioned to cancel the registration on behalf of a previous client, a photographer named Robert Doyle.  The Trademark Trial and Appeal Board found both times that Doyle failed to establish standing, saying in 2012 that the photographer's alleged interest in "dining and shopping in such other restaurants and gift shops with goats on their roofs" was insufficient.

Bank filed the third and latest petition "as attorney and client" last October, the restaurant said.  In asking to cancel the mark, Bank argued that the mark was offensive for being "demeaning" to goats and that the registration harms the "respect, dignity and worth of animals."

But siding with the TTAB, a Federal Circuit panel in December ruled that Bank's concern for the animals did not give him standing because he had no other interest in the trade dress.  Bank was ordered to pay the restaurant's legal fees for filing a "frivolous" appeal, with the panel noting that the TTAB has thrice dismissed his petitions to cancel the trade dress for the same reason.

Federal Circuit Not Sure Court Botched Patent Fee Award

September 1, 2020

A recent Law 360 story by Nadia Dreid, “Fed. Circ. Not Sure Court Muddled Fee Award in Patent Fight,” reports that the Federal Circuit seemed wary of overturning a decision awarding attorney fees to HP Inc. and SAP America after they emerged victorious from a patent dust-up with software maker Big Baboon Inc. that a lower court declared was unfairly waged.  While Big Baboon worked to convince a three-judge panel that the California federal court that handled the patent dispute "basically awarded fees based on some arbitrary line in the sand," U.S. Circuit Judge Kathleen O'Malley wasn't sure about that — particularly the company's contention that it couldn't be forced to shell out attorney fees without evidence of misconduct.

"I don't understand your statement that litigation misconduct is required before fees can be awarded," she said.  "What the court found was that the pursuit of litigation was objectively unreasonable, right?"  The parties were before the court to argue two different appeals: whether the lower court flubbed when it threw out the software maker's case and whether it was within its rights to order Big Baboon to pay $188,000 in attorney fees.

On one side, patent holder Big Baboon, which has been battling with HP and SAP America for a while over claims that a product they sold in 1996 infringed one of its e-commerce patents, argues that the lower court ignored contradictory testimony from the tech companies when it threw out its case and that it unfairly ordered it to pony up attorney fees without evidence of misconduct.

On the other side, HP and SAP America say they're owed the $188,000 in attorney bills that they ran up preparing for the discovery that Big Baboon was refusing to delay — even though the suing software maker had evidence that showed that the allegedly infringing product existed before the e-commerce design at issue.

"This case is exceptional because Big Baboon doesn't know when to stop, no matter how weak its position," counsel for HP and SAP America told the court.  The tech companies accused the software company of "abusively [filing] serial suits," pointing toward a suit against HP's predecessor in 2009 over the same patent, albeit with different claims.

Hollywood Studios Seek $6.4M in Attorney Fees in IP Trial Win

August 3, 2020

A recent Law 360 story by Hailey Konnath, “Hollywood Studios Seek $6.4M Atty Fees for VidAngel IP Win” reports that Disney and other Hollywood studios say VidAngel should pay $6.4 million in attorney fees after Munger Tolles & Olson LLP attorneys secured the studios a $62.4 million verdict in a long-running copyright suit over streamed films, claiming opposing counsel "made this litigation as difficult and costly as possible."

Last June, a California federal jury found that VidAngel Inc. willfully infringed the copyrights of nearly 820 films owned by Disney Enterprises Inc., Warner Bros. Entertainment Inc., Twentieth Century Fox Film Corp. and other Hollywood studios.  The streaming service also violated the Digital Millennium Copyright Act when it used illegal software to bypass anti-piracy measures and rip the films off DVDs, the jury found at the time.

In a motion, the studios slammed VidAngel's litigation tactics, saying the company violated a preliminary injunction and forced the studios to file a motion for contempt, which the court granted.  VidAngel also filed numerous meritless motions, including one for which it was sanctioned, raised frivolous arguments and rehashed multiple rejected arguments in post-trial motions, they said.

Ultimately, the company "forced plaintiffs to proceed to the bitter end rather than settling," the studios said.  "All told, VidAngel has forced plaintiffs to spend more than $8 million in attorneys' fees to protect their copyrights and stop VidAngel's willful infringement and violation of the DMCA," they said.  The $6.4 million request doesn't cover all the fees racked up by the studios, and, by any measure, it's a reasonable request, the studios' motion said.

VidAngel promptly fired back, saying it's not requesting the same amount of time afforded to plaintiffs to prepare their fees motion — which was four months — but are rather seeking a continuance of three weeks "to permit them to respond to plaintiffs' evidence, marshal their own evidence and arguments, and file their opposition."

"A thorough review of plaintiffs' voluminous billing document — which fills 109 small-print pages and totals 10,572.5 hours — to identify fees that are potentially unreasonable cannot be completed in one week, and if anyone is to blame for the need for a continuance it is plaintiffs," VidAngel said.