A recent Law 360 story by Christopher Cole, “Fed. Circ. Denies Rembrandt Bid to Rehear Atty Fee Ruling,” reports that the Federal Circuit has denied Rembrandt Technologies LP's request for rehearing in its bid to escape paying a massive sum in attorneys’ fees for alleged misconduct while pursuing intellectual property claims in multidistrict litigation against several cable companies.  The circuit said that there would be no rehearing from either the full bench or the original three-judge panel, which had upheld a district court ruling ordering Rembrandt to pay the cable companies' legal fees but had struck a $51 million fee award. 

The ruling dashes an effort by Rembrandt to convince the appeals judges that the earlier decision drew conclusions the lower court never reached about alleged misconduct during the patent enforcement actions, including improper payment of witnesses and document spoliation.  “Upon consideration … the petition for panel rehearing is denied,” the court said in a non-precedential ruling in which the judges offered no further comment.  “The petition for rehearing en banc is denied.”

Rembrandt had sought to reverse the July decision by a circuit panel affirming a Delaware federal judge’s ruling that the firm litigated a long-running patent dispute with multiple cable providers in an “unreasonable manner,” partly by paying witnesses based on the contingency of winning the case.  The firm also either engaged in or failed to stop spoliation, the federal judge found.  The patent actions that led to the dispute over attorneys’ fees stretch back more than 10 years and roped in dozens of cable providers, equipment makers and broadcast networks that Rembrandt accused of infringing several patents, most of which covered cable modem technology.

In August 2015, U.S. District Judge Gregory M. Sleet fount that the long-running multidistrict litigation, involving allegations of infringement of broadcasting and cable transmission patents, was exceptional and ordered Rembrandt to pay attorneys’ fees and costs.

While the Federal Circuit panel agreed with the trial court’s characterization of Rembrandt’s conduct as “exceptional” in justifying a fee award, the appeals judges in the July ruling reversed a $51 million award — equal to almost all the cable companies’ fees — saying the district judge did not explain why that amount was warranted, sending the fee determination back to the judge.  But Rembrandt argued in court papers filed in September that the panel only upheld that the conduct was “exceptional” based on findings that it believed the judge “could have” made to justify such an award but did not actually make.

The case is In Re: Rembrandt Technologies LP Patent Litigation, case number 17-1784, in the U.S. Court of Appeals for the Federal Circuit.