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Tech Firms Unite on Attorney Fee Awards in Patent Cases

July 13, 2010 | Posted in : Defense Fees / Costs, Fee Award, Fee Award Factors, Fee Entitlement / Recoverability, Fee Issues on Appeal, Fees as Sanctions

A recent NLJ story, “Major Retailers and Tech Companies Support Netflix Over Attorney Fees” reports that Netflix’s bid for the U.S. Court of Appeals for the Federal Circuit to hold an en banc hearing on the legal standard for district court awards of attorney fees in patent cases is generating support among major technology and Internet retail companies.  Netflix, the technology companies and retailers believe that it’s too hard for defendants to recoup attorney fees when they’re hit with frivolous lawsuits.  They claim that the section of the patent code that gives district court judges the discretion to award attorney fees in exceptional cases should apply equally to defendants and plaintiffs. 

Plaintiffs can bring weak patent infringement cases without any downside, and there are very few ways for companies to prevent them, says John Vandenberg, an intellectual property litigation partner at Klarquist.  “There aren’t too many tools the courts can use to police that, but one of them is awarding attorneys’ fees in the right case,” Vandenberg said.  The retailers are frequently on the receiving end of dubious lawsuits with flimsy claims, but it costs far more to fight than settle, says Peter Brann, a partner at Brann & Isaacson.  “Because the scales are not balanced on attorneys’ fees awards, you don’t have the prospect of saying ‘If we draw the line in the sand here, maybe we can deter others,’” Brann said.