Justia Legal Ethics Opinion Summaries

B.E. sued Facebook for infringement of B.E.’s 314 patent. Approximately a year into the case, Facebook and two other parties B.E. had accused of infringement, Microsoft and Google, filed petitions for inter partes review of the asserted claims. The district court stayed its proceedings. The Patent Board instituted review and held the claims unpatentable. The Federal Circuit affirmed. Facebook then moved in the district court for a dismissal with prejudice and costs under Rule 54(d). B.E. agreed that dismissal was appropriate but argued that the claims should be dismissed for mootness, rather than with prejudice. The district court agreed with B.E., issuing an Order holding that, in light of the cancellation of claims, B.E. no longer had a basis for the lawsuit. The court ultimately awarded costs under Rule 54(d). The Clerk of Court held a hearing and taxed $4,424.20 in costs against B.E.; the court affirmed, holding that, although the case was dismissed for mootness, Facebook “obtained the outcome it sought: rebuffing B.E.’s attempt to alter the parties’ legal relationship.” The Federal Circuit affirmed, finding Facebook to be the prevailing party in B.E.’s lawsuit. View "B.E. Technology, L.L.C. v. Facebook, Inc." on Justia Law

The dealer had the exclusive right to sell the manufacturer's below-ground storm shelters in Missouri and Arkansas. The dealer created a wordmark—“Life Saver Storm Shelters”— and a logo using that name, which it affixed to the shelters. In 2006, the manufacturer obtained the dealer’s permission to use these marks on shelters marketed in Illinois. The manufacturer violated the limited license by using the marks on products sold throughout the country. The manufacturer's suit for trademark infringement, claiming prior use and ownership of the wordmark, was rejected on summary judgment. The dealer counterclaimed for trademark infringement and false endorsement under the Lanham Act. The district judge found for the dealer on all claims, entered a cease-and-desist order, and awarded $17 million in disgorged profits as damages but denied vexatious-litigation sanctions under 28 U.S.C. 1927 and attorney’s fees under the Lanham Act. The Seventh Circuit affirmed in part, rejecting the manufacturer's argument that the logo violated a statute that makes it a crime to use the American Red Cross emblem. The conclusion that the manufacturer engaged in trademark infringement on a vast scale was supported by the evidence. The court granted a limited remanded; although the judge reasonably concluded that section 1927 sanctions were not warranted, his summary denial of Lanham Act fees cannot be squared with his conclusions on the merits concerning infringement. View "4SEMO.COM, Inc. v. Southern Illinois Storm Shelters, Inc." on Justia Law

Uniclass and ATEN make and sell switch systems that allow a user to control multiple computers from a single keyboard, video device, and mouse. ATEN sued Uniclass and the customer defendants alleging infringement of its 141 and 289 patents. A jury found that Uniclass did not infringe the asserted claims and that the asserted claims of the 141 patent were invalid as anticipated (35 U.S.C. 102) without specifying which reference was the basis for its finding. The Federal Circuit reversed as to invalidity and affirmed as to infringement. The court affirmed the denial of Uniclass’s motion to declare the case exceptional under 35 U.S.C. 285. Uniclass argued that ATEN did not conduct an adequate pre-filing investigation, unnecessarily increased the costs of claim construction, drastically increased discovery costs by frequently changing counsel and infringement positions, and engaged in unreasonable litigation behavior requiring additional motion practice and leading to an expensive and disproportionate trial. The court noted that note that ATEN’s primary argument on appeal—that the court improperly gave claim construction disputes to the jury—was rejected because ATEN did not timely raise the issue below and found that ATEN’s positions were not so objectively unreasonable or exceptionally meritless as to stand out from other cases. View "ATEN International Co., Ltd. v. Uniclass Technology Co., Ltd." on Justia Law

Westech sued 3M in the Western District of Washington, alleging infringement. 3M moved to dismiss the original and amended complaints. While 3M’s motion was pending, the Supreme Court decided, in TC Heartland, that under the patent venue statute, 28 U.S.C. 1400(b), a corporation “resides” only in its state of incorporation. 3M amended its motion to argue improper venue. Westech sought to amend its complaint and argued that the presence of sales representatives and 3M’s sales in Washington supported venue and that 3M had a “principal place of business” and other business locations at various Washington addresses. At the time of the original complaint, 3M did not own, lease, use, or maintain property at any of the specified locations, and, at the time of the motion did not occupy any of the locations. The district court denied 3M’s motion without prejudice and allowed Westech amend its complaint. In the interim, the Federal Circuit held that section 1400(b) requires a defendant to have a physical place in the district that serves as a regular and established place of business. The district court then dismissed the case. On appeal, 3M sought attorneys’ fees and double costs, arguing that Westech’s appeal was frivolous. The Federal Circuit affirmed the dismissal but denied the motion for fees and costs. Westech’s behavior on appeal bordered on sanctionable, but Westech pursued the appeal when the question of who shoulders the burden of establishing proper venue was unanswered. View "Westech Aerosol Corp. v. 3M Co." on Justia Law

ThermoLife, the exclusive licensee of four Stanford University patents, claiming methods and compositions involving the amino acids arginine and lysine, to be ingested to enhance vascular function and physical performance, filed an infringement suit against several defendants. Stanford was a co-plaintiff. A bench trial was held and the district court found all asserted claims invalid and later granted defendants’ motions for attorney’s fees under 35 U.S.C. 285, which authorizes an award to a prevailing party in “exceptional” cases. The court found the cases exceptional, not based on an assessment of the validity position taken by plaintiffs or how they litigated but on its conclusion that plaintiffs were unjustified in alleging infringement in the first place, having failed to do an adequate pre-filing investigation. The Federal Circuit affirmed. These are unusual cases in that the basis for the fee award had nothing to do with the only issues litigated to reach the merits judgment: Infringement had not been adjudicated and even discovery on infringement had been postponed so that validity could be litigated first. Nevertheless, there was no abuse of discretion in the district court’s determination of exceptionality based on plaintiffs’ inadequate pre-suit investigation of infringement. View "ThermoLife International, LLC v. GNC Corp." on Justia Law

The Second Circuit affirmed the district court's judgment granting attorneys' fees and costs to defendants under section 505 of the Copyright Act and section 35(a) of the Lanham Act. These provisions authorized the district court to award fees to the prevailing party in a lawsuit. The court held that defendants met the definition of "prevailing party" under both fee-shifting provisions. Although defendants did not obtain a dismissal on the the Copyright and Lanham Acts claims, defendants have fulfilled their primary objective by obtaining dismissal of the complaint on collateral estoppel grounds. View "Manhattan Review, LLC v. Yun" on Justia Law

In this trademark infringement action, the district court granted Alliance for Good Government summary judgment on its trademark infringement claim against Coalition for Better Government, enjoined Coalition from the use of both its logo and its trade name, and then awarded Alliance attorney's fees incurred in bringing the lawsuit. The Fifth Circuit affirmed in part and held that the district court did not abuse its discretion in finding that Alliance was entitled to fees. The court remanded for the district court to reassess the amount of fees, because the court has since modified the district court's injunction to permit Coalition to use its trade name. View "Alliance for Good Government v. Coalition for Better Government" on Justia Law

A jury awarded Oracle damages after finding that Rimini had infringed Oracle copyrights. The court awarded Oracle fees and costs, including $12.8 million for litigation expenses such as expert witnesses, e-discovery, and jury consulting. The Ninth Circuit affirmed, acknowledging that the award covered expenses not included within the six categories of costs identified in 28 U.S.C. 1821 and 1920, and citing the Copyright Act, which gives district courts discretion to award “full costs” to a party in copyright litigation, 17 U.S.C. 505. A unanimous Supreme Court reversed in part. The term “full costs” in the Copyright Act means costs specified in the general costs statute (sections 1821 and 1920), which defines what the term “costs” encompasses in subject-specific federal statutes such as section 505. Courts may not award litigation expenses that are not specified in sections 1821 and 1920 absent explicit authority. The Copyright Act does not explicitly authorize the award of litigation expenses beyond the six categories; the six categories do not authorize an award for expenses such as expert witness fees, e-discovery expenses, and jury consultant fees. Oracle has not shown that the phrase “full costs” had an established legal meaning that covered more than the full amount of the costs listed in the applicable costs schedule. View "Rimini Street, Inc. v. Oracle USA, Inc." on Justia Law

Spineology’s patent describes an “expandable reamer” for use in orthopedic surgery. Wright manufactures a reamer known as the X-REAM®. In 2015, Spineology sued Wright, alleging the X-REAM® infringes its patent. The district court refused to adopt either party’s construction of the term “body” but construed “body” consistent with Wright’s noninfringement position and granted Wright summary judgment. Wright then sought attorney fees, 35 U.S.C. 285, arguing Spineology’s proposed construction of “body,” its damages theories, and its litigation conduct rendered the case “exceptional.” The Federal Circuit affirmed the denial of the motion. While ultimately the court rejected Spineology’s proposed construction, the attempt was not so meritless as to render the case exceptional. The court determined “the arguments made by Spineology to support its damages theory . . . are not so meritless as to render the case exceptional” and “[n]othing about this case stands out from others with respect to the substantive strength of Spineology’s litigating position or the manner in which the case was litigated.” View "Spineology, Inc. v. Wright Medical Technology Inc." on Justia Law

Bell sued Vacuforce for copyright infringement, accusing it of publishing his photograph of the Indianapolis skyline on its website without a license. Vacuforce hired attorney Overhauser. The parties quickly settled; the federal lawsuit was dismissed with prejudice. Overhauser then moved to recover attorney fees from Bell, arguing that because the settlement produced a dismissal with prejudice, Vacuforce was the “prevailing party” for purposes of fees under the Copyright Act, 17 U.S.C. 505. The district court denied Overhauser’s as motion frivolous and misleading and ordered monetary sanctions against Overhauser: one under Federal Rule of Civil Procedure 11 and another under 28 U.S.C. 1927. The Seventh Circuit affirmed the sanctions, rejecting an argument that a party can “prevail” for purposes of a fee-shifting statute by paying a settlement and obtaining a dismissal with prejudice. The district court did not abuse its discretion by imposing the section 1927 sanction. “Objective bad faith” will support such a sanction. A lawyer demonstrates objective bad faith when she “pursues a path that a reasonably careful attorney would have known, after appropriate inquiry, to be unsound.” The district court found that Overhauser’s legal contentions were baseless and that he failed to disclose the proper factual foundation necessary to evaluate his legal argument. View "Overhauser v. Bell" on Justia Law