A recent Law 360 story by Tiffany Hu, “Justice Won’t Hear Dispute Over Atty Fees in Patent Cases,” reports that the U.S. Supreme Court declined to hear a question on courts' allegedly "inconsistent and contradictory" discretion over attorney fees in a patent case involving lost luggage technology. The high court denied Roadie Inc.'s petition to take up its appeal of a Federal Circuit ruling that shot down its request for attorney fees, despite the company's arguments that the case should have been deemed exceptional because of procedural missteps by an attorney for rival Baggage Airline Guest Services Inc. The Federal Circuit affirmed the invalidation of BAGS' patent, which BAGS alleged Roadie had infringed.
Roadie had argued that it was "forced to defend a case that should never [have] been brought" and that the lower courts should have considered the weakness of BAGS' case — and Roadie's "strong showing of noninfringement" — and awarded Roadie fees for fending off the suit. "Since 2014, judicial 'discretion' has been inconsistent and contradictory in a way that frustrates the goal of [the Patent Act] which is to improve the efficiency of the judiciary by discouraging the filing of bogus lawsuits," Roadie said in its petition.
According to Roadie, the district court's decision not to consider the issue of noninfringement went against the high court's 2014 ruling in Octane Fitness LLC v. ICON Health & Fitness Inc. , which made it easier for prevailing parties to obtain fees, according to the petition. Around that same time, the high court also ruled in Highmark Inc. v. Allcare Health Management System Inc. that because determining whether a case is "exceptional" is up to the district court's discretion, that decision can be reviewed on appeal for abuse of discretion, Roadie argued.
BAGS filed its opposition last month, contending that the Federal Circuit's decision to defer to the lower court's "reasoned analysis" did not meet the statutory requirements for certiorari. Roadie's arguments before the Supreme Court did not "include anything persuasive not already considered by the district court and the Federal Circuit," it added. Edward A. Pennington of Smith Gambrell & Russell LLP, an attorney for Roadie, told Law360 in an email that "every entity that tries to bring an important matter to the Supreme Court is disappointed when the court does not take the case," but that his client realizes few petitions are granted "no matter how important the fee reversal issue is."
"Fee reversal ... should be an important deterrent against ill-conceived patent suits, but as long as district courts have loosely defined factors to consider, we will continue to see inconsistent decisions," Pennington said. The dispute dates to 2017, when BAGS accused Roadie, which pairs customers who need items shipped to drivers already headed in the correct direction, of developing an app that infringes the patent.
Roadie had asked a Delaware federal judge for judgment on the pleadings based on invalidity and noninfringement simultaneously. The court granted the motion on invalidity, with the Federal Circuit later affirming the decision, finding BAGS' patent was directed to a patent-ineligible abstract idea of "coordinating and monitoring baggage delivery."
The district court declined to consider Roadie's noninfringement arguments, which were fully briefed, since it found the patent invalid. Had it factored the noninfringement issue into its exceptionality finding, Roadie argued, that would have supported the argument that the case was meritless and that Roadie deserved fees. The district court denied Roadie's bid for fees, however, saying there was no evidence of nefarious intent despite the missteps by BAGS, which the district court chalked up to inexperience and mistakes. The Federal Circuit affirmed the ruling in November.