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Judge Alsup Skeptical of $10M Fee Request in IP Action

August 1, 2019 | Posted in : Expenses / Costs, Fee Entitlement, Fee Expert / Member, Fee Request, Fees as Sanctions / Bad Faith

A recent Law 360 story by Hannah Albarazi, “‘Jaded’ Alsup Skeptial of Apple and Cisco’s $10M IP Fee Bid,” reports that a "jaded" U.S. District Judge William Alsup questioned whether Apple and Cisco are overreaching by seeking $10 million in attorney fees and costs from a tech company they say dragged them into "baseless" patent disputes, telling them "the law should be that we deny and give you zero." 

"You should be honest from the get-go," Judge Alsup told attorneys for the tech giants, saying they appeared to be overstating fees and costs incurred in the case.  "That's how I feel about it."  "That may not be the law," he added.  Judge Alsup's punishing comments came during a hearing at which Apple asked him to approve attorney fees and costs of $4.5 million, while Cisco asked the judge to approve $5.3 million in attorney fees and costs following the tech giants' summary judgment win against Straight Path IP Group Inc.

Straight Path argues that not only were the cases brought in good faith, but they do not warrant an award of fees.  The company claims that Apple is seeking inappropriate and excessive fees, including fees for proceedings outside the case as it was pending, and that Cisco's cost requests are not properly justified.  Counsel for Apple told Judge Alsup on that the company wasn't overreaching in seeking attorney fees and costs.  The debate over whether or not to award attorney fees and costs comes nearly two years after Judge Alsup granted summary judgment to both Cisco and Apple, after harshly criticizing Straight Path for trying to "wiggle out" of a Federal Circuit ruling that narrowed the claims.

In 2016, Straight Path launched infringement claims against Cisco, and followed up with similar claims against Apple over its FaceTime video call feature.  Straight Path claimed both companies had infringed on its Voice over Internet Protocol technology.  The patents-in-suit cover technology for checking whether a call recipient's device is connected to the network before attempting a call, but Cisco and Apple said their products don't do that until a call recipient answers their phone, a point on which the court ultimately agreed.

Despite the tech giants' summary judgment win, Judge Alsup aired his qualms with how the expert reports in these cases — and others — are being created.  He suggested that some of them appear to have been ghostwritten by counsel.  "Maybe I'll put you on the stand and ask you if you ghost wrote one of these," Judge Alsup told counsel for Apple.

"The experts are there for the money,” he added.  "I'm so jaded by how these patent cases are done."  Done airing his concerns with expert reports, Judge Alsup laid into a declaration by retired U.S. Circuit Judge Paul R. Michel in support of Straight Path's argument that the case was brought in good faith.

Judge Alsup berated Straight Path's counsel for not allowing Cisco and Apple time to challenge the declaration.  "Are we supposed to take that as gospel?" he asked, telling Straight Path that the declaration put him in an awkward position.  "We love Judge Michel, but it was submitted at the last minute," Judge Alsup said.  "The other side needs to be able to question Judge Michel.  It's a problem."  Notably, Judge Michel has recently teamed up with ex-patent officials and judges seeking to push Congress to pass a law expanding patent eligibility.

After allowing the parties to present their arguments on the nitty-gritty of the patent dispute and argue why the attorney fees and costs should or should not be approved, Judge Alsup took the matter under submission.  The cases are Straight Path IP Group Inc. v. Cisco Systems Inc., case number 3:16-cv-03463, and Straight Path IP Group Inc. v. Apple Inc., case number 3:16-cv-03582, in the U.S. District Court for the Northern District of California.