A recent Law 360 story by Suzanne Monyak, “Qualcomm’s $1.8M Fee Award Upheld in Shipping IP Row,” reports that freight shipping company R+L Carriers Inc. must fork over $1.8 million to pay Qualcomm Inc.’s attorneys’ fees in a dispute over a shipping logistics patent, the Federal Circuit found, affirming a lower court's ruling that the carrier’s infringement claims against the telecom giant were flawed.  In a one-line per curiam opinion that did not explain the court's reasoning, the Federal Circuit panel summarily affirmed an Ohio federal court’s order awarding Qualcomm attorneys’ fees based on a finding that R+L’s contributory infringement claims were “deficient” and thus exceptional under the standard set by the U.S. Supreme Court’s 2014 ruling in Octane Fitness.

“While resolution of this issue did not occupy much time, it was patently obvious that R+L’s contributory infringement claims were deficient.  They should never have been a part of this case,” U.S. District Judge Sandra S. Beckwith wrote at the time.  “That they were, however, is consistent with R+L’s demonstrated tendency to plunge ahead with its claims regardless of the facts.”

The winding multidistrict litigation began in 2009 when R+L sued Qualcomm and several other companies for infringing its shipping patent, which covers an automated method of processing transportation documentation.  The patent at the center of the suit — U.S. Patent Number 6,401,078 - describes a method of streamlining shipping operations by transmitting each package’s shipping information to a central terminal before the package arrives, so shipping clerks can plan the shipment of the package in advance.

Following the dismissal of R+L’s first round of suits in February 2010, the transportation company filed a series of amended complaints against the companies.  The Ohio court dismissed R+L's renewed allegations later that year, finding the company had not adequately demonstrated the existence of direct infringement necessary to show the defendants had themselves indirectly infringed the logistics patent.  In a notable June 2012 decision, the Federal Circuit remanded the induced infringement claims back to the district court, concluding that they survived Qualcomm’s motion to dismiss because the lower court had failed to draw all reasonable inferences for R+L.

In 2013, R+L filed for an ex parte re-examination of the patent, based on prior art identified in the case.  The U.S. Patent and Trademark Office issued a re-examination certificate the following March that narrowed the scope of the patent’s first claim, according to court documents.  The district court ruled in 2014 that Qualcomm did not infringe the patent as it was amended, a decision that the Federal Circuit affirmed in September 2015.

Qualcomm then asked for attorneys’ fees in November 2015, arguing that R+L conducted sufficient investigations before filing the suits, that it failed to realistically identify a direct infringer of the patent and that it continued to pursue direct, indirect and contributory infringement claims it knew were false.  Judge Beckwith agreed that the suit was exceptional, ordering the shipping company to shell out $1.8 million in attorneys’ fees in a July 2017 judgment.  In that order, Judge Beckwith also faulted R+L for violating a court order to stay third-party discovery.

R+L challenged that finding and fees order on appeal to the Federal Circuit, arguing that the Ohio federal court had abused its discretion. R+L also disputed Judge Beckwith’s decision to award Qualcomm all of its litigation fees, even though only the contributory infringement claims were found to be exceptional.  “Even if R+L had not engaged in the conduct the district court found to be exceptional, Qualcomm still would have had to defend R+L’s induced infringement claim, and it still would have incurred most of the fees the district court awarded it,” R+L wrote in its opening brief.

Qualcomm hit back that the shipping company’s arguments were “without merit,” calling R+L’s violation of the shipping order “unfathomable” and asserting that the fees award did not include all fees incurred.  “It certainly was not an abuse of discretion for Judge Beckwith to take this inexcusable violation of her order into account in determining that this case was exceptional,” Qualcomm wrote in its reply.

The case is R+L Carriers Inc. v. Qualcomm Inc., case number 17-2469, in the U.S. Court of Appeals for the Federal Circuit.