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Federal Circuit Says Party Time-Barred From Challenging Fee Award

April 20, 2022 | Posted in : Fee Award, Fee Dispute, Fee Entitlement / Recoverability, Fee Issues on Appeal, Fee Jurisprudence, Fee Request, Fees & Timeliness, Practice Area: IP Litigation

A recent Law 360 story by Jasmin Jackson, “Fed. Circuit Says Appeal of Domino’s $2.7M Fee Win Too Late” reports that the Federal Circuit has held a patentee waited too long to challenge an order forcing it to pay Domino's $2.7 million worth of attorney fees in a patent suit over online menus, yet it won't decide whether to ax the appeal until a lower court rules on a filing extension request.  The three-judge panel said they would postpone ruling on a motion to dismiss filed by Domino's Pizza LLC in an appeal launched by patent-holding company Ameranth Inc. over the seven-figure fee award, which was issued after the pizza chain beat claims that its online menu infringed a patent held by Ameranth.

The panel said they would wait for a California federal judge to decide whether the missed 30-day filing deadline for the appeal could be extended.  "Granting an extension of time to appeal could result in the notice of appeal being deemed timely, and because the district court did not act on that request, the court deems it proper here to remand for the district court to now act on that request," the panel said.

Ameranth filed its suit against Domino's in March 2012 and claimed the chain's online ordering system infringed a patent that covered menu generation, which was issued by the U.S. Patent and Trademark Office that same month.  But U.S. District Judge Dana M. Sabraw invalidated the patent in September 2018 and found the ordering technology was unpatentable under the U.S. Supreme Court's 2014 ruling in Alice v. CLS Bank — a decision that prevented abstract computer-based ideas from being patented without an added inventive element.  According to the ruling, Ameranth's patent was based on an abstract idea of configuring and transmitting menu information.

The pizza chain then requested nearly $3 million in attorney fees in February 2020.  A year later, Judge Sabraw agreed that Domino's was entitled to the award due to Ameranth's "especially weak" suit and said further briefing was needed to determine the exact amount.  Ameranth asked that the ruling be reconsidered the following month and asserted it was wrongfully being labeled as a "patent troll."  But the pizza chain was ultimately awarded $2.7 million in June 2021.

Judge Sabraw amended the judgment the following November but maintained the fee amount, prompting the patent-holding company to initiate an appeal at the Federal Circuit the same month.  But the panel said in their order that Ameranth had to initiate the appeal within about a month of the lower court's initial June order, ruling the filing clock didn't restart after the amended judgment.  "The June 21, 2021, order here fully adjudicated the fee matter and evidenced a clear intent to be the court's final act on that matter," the panel held.