Justia Legal Ethics Opinion Summaries

Under the Defend Trade Secrets Act, a defendant is not eligible for fees when the plaintiff obtains a dismissal without prejudice because such a dismissal does not establish the winner of the dispute. The Fifth Circuit held that taking the lead early in the lawsuit did not make defendants eligible for fees, nor did the trial court's postponement of the litigation when it allowed plaintiff to dismiss the federal suit without prejudice. Accordingly, the court affirmed the district court's denial of fees. View "Dunster Live, LLC v. LoneStar Logos Management Co." on Justia Law

AlphaCap, a non-capitalized non-practicing entity, hired Gutride on a contingency basis and sued 10 internet crowdfunding companies for patent infringement. Nine defendants settled for less than $50,000 each, leaving only Gust. After the litigation ended, the district court awarded Gust $492,420 in fees and $15,923 in costs under 28 U.S.C. 1927, concluding that the case was “exceptional” because AlphaCap had “clear notice" that its patents could not survive scrutiny under 35 U.S.C. 101. The court found the claims were directed to crowdfunding, a fundamental economic concept and an abstract idea, and did not include an inventive concept sufficient to render the abstract ideas patent eligible under “Alice.” The court reasoned that AlphaCap brought the case “to extract a nuisance settlement,” as confirmed by the nine other “paltry settlements” and AlphaCap’s decision to file in a distant venue. Gutride’s contested its joint and several liability for the fees. The Federal Circuit reversed, noting the “unbroken band of cases” excluding baseless filing of a complaint from supporting a section 1927 award. In addition, AlphaCap’s position on patent eligibility was colorable, given the relative paucity of section 101 cases. The district court had no basis to find that Gutride knew that the patents were invalid. While acknowledging concerns about AlphaCap’s “business model,” the court held that the fact that 10 suits were filed and the opposition to a transfer of venue did not establish bad faith. View "Gust, Inc. v. AlphaCap Ventures LLC" on Justia Law

Eight of Rembrandt’s at-issue patents address cable modem technology; the ninth involves over-the-air signals. Rembrandt filed multiple infringement suits against dozens of cable companies, cable equipment manufacturers, and broadcast networks. The cases were consolidated. After several years of litigation, the court entered final judgment against Rembrandt on all claims. Many of the defendants sought attorney fees under 35 U.S.C. 285. Nearly four years after the litigation ended, the court issued a brief order granting that motion, declaring the case exceptional, and granting the bulk of the requests for fees, including nearly all of the attorney fees incurred in the litigation: more than $51 million. The Federal Circuit affirmed the exceptional case designation but remanded, finding that the court erred by failing to analyze fully the connection between the fees awarded and Rembrandt’s misconduct. While the court’s findings that that Rembrandt: wrongfully gave fact witnesses payments contingent on the outcome of the litigation; engaged in, or failed to prevent, widespread document spoliation; and should have known that the revived patents were unenforceable, were “remarkably terse” and “shed little light on its justifications” none of those findings was based “on an erroneous view of the law or on a clearly erroneous assessment of the evidence. View "In re Rembrandt Technologies, LP Patent Litigation" on Justia Law

The Ninth Circuit reversed the district court's order denying plaintiff's motion for attorney's fees in a copyright infringement action brought by a film production company, alleging that a single user illegally downloaded and distributed repeatedly American Heist, a Hollywood action movie. In Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994), the Supreme Court laid out factors to guide discretion in whether to award fees. The panel held that the district court did not faithfully apply the Fogerty factors in this meritorious BitTorrent action. The panel noted that the district court's analysis of whether fees are warranted should be based on Glacier's case against defendant, and not on the district court's view of BitTorrent litigation in general or on the conduct of Glacier's counsel in other suits. Therefore, remand was necessary because the district court denied fees under the present circumstances based on a one-size-fits-all disapproval of other BitTorrent suits. View "Glacier Films (USA), Inc. v. Turchin" on Justia Law

Stone sued Cook in the Eastern District of Texas, alleging infringement of the 327 patent, which relates to a basket-type medical device used to remove stones from biological systems. Venue was transferred to the Southern District of Indiana. Cook deposed the patent’s inventor, who stated, regarding the addition of the “sheath movement element” in claim 1 to overcome an examiner’s rejection, “I realize there is nothing novel about it.” Cook then petitioned the Patent and Trademark Office for inter partes review of all claims. Following the institution of IPR, one of Stone’s managing members offered to license the 327 patent to Cook for $150,000.00 but negotiations broke down. The Patent Board canceled all of the patent’s claims. Following a dismissal with prejudice, the court denied Cook’s motion for attorney fees, 35 U.S.C. 285. The Federal Circuit affirmed, agreeing the case was not “exceptional” and that Stone lacked any type of “clear notice” of the 327 patent’s invalidity by service of Cook’s invalidity contentions. While one might view Stone’s litigating position as weak given the inventor’s deposition testimony regarding the novelty and origin of claim 1’s sheath handle element, exceptionality is not assessed by a strong or even correct litigating position. View "Stone Basket Innovations, LLC v. Cook Medical LLC" on Justia Law

In 1995, Raniere assigned all rights in the five patents to GTI. Raniere is not listed on GTI’s incorporation documents as an officer, director, or shareholder. GTI dissolved in 1996. In 2014, Raniere executed a document on behalf of GTI, as its “sole owner,” purportedly transferring the patents to himself. Raniere subsequently sued Microsoft and AT&T for infringement, identifying himself as the patents’ owner. Microsoft moved to dismiss for lack of standing, noting that the PTO’s records indicated that Raniere did not own the patents. Raniere produced documents that, according to the court, failed to indicate that Raniere had an ownership interest in GTI at any time or had the right to assign the patents. Raniere obtained documents from an attorney, showing the GTI shareholders’ consent to a transfer of shares from Raniere’s ex-girlfriend (75% owner of GTI) to Raniere. The documents did not indicate that any transfer was completed and did not establish that Raniere owned the patents. The district court held a hearing, found that Raniere’s testimony contradicted Raniere’s earlier representation that the shares had already been transferred and was “wholly incredible and untruthful,” concluded that Raniere was unlikely to be able to cure the standing defect, dismissed the case, and found that Raniere’s conduct demonstrated “a clear history of delay and contumacious conduct.” The Federal Circuit affirmed the dismissal and a subsequent award of prevailing parties attorney fees and costs, 35 U.S.C. 285. View "Raniere v. Microsoft Corp." on Justia Law

IH’s patent relates to a method of purchasing goods at a local point-of-sale system from a remote seller. IH sued Bed Bath & Beyond for infringement. Two months later, the district court granted BBB summary judgment, concluding that the Supreme Court’s intervening decision, Alice Corp. v. CLS Bank, rendered the asserted claims invalid under 35 U.S.C. 101 because the asserted claims are directed to the abstract idea of “local processing of payments for remotely purchased goods.” The Federal Circuit affirmed. BBB moved for an award of attorney fees under 35 U.S.C. 285, arguing that, once Alice issued, IH should have reevaluated its case and dismissed the action. The district court granted BBB’s fees motion, holding that, “following the Alice decision, IH’s claims were objectively without merit,” and awarded BBB its attorney fees beginning from the date of the Alice decision, including fees incurred during the section 101 appeal. The Federal Circuit affirmed. IH’s claims were “dubious even before the Alice decision” and Alice was a significant change in the law as applied to the facts of this particular case. View "Inventor Holdings, LLC v. Bed Bath & Beyond, Inc." on Justia Law

AdjustaCam’s patent, which issued in 1999, discloses a camera clip that supports a camera both on a flat surface and when attached to a computer monitor. AdjutaCam’s infringement litigation against Newegg included a Markman order, indicating that AdjustaCam's suit was baseless, and extended expert discovery. Just before summary judgment briefing, AdjustaCam voluntarily dismissed its infringement claims against Newegg with prejudice. Newegg then sought attorneys’ fees under 35 U.S.C. 285. Following a remand in light of intervening Supreme Court precedent clarifying what constitutes an exceptional case, the district court again denied Newegg’s motion for fees. The Federal Circuit reversed. Based on the circumstances presented here, the wholesale reliance on the previous judge’s fact-finding was an abuse of discretion. The record points to this case as standing out from others with respect to the substantive strength of AdjustaCam’s litigating position. Where AdjustaCam may have filed a weak infringement lawsuit, accusing Newegg’s products of infringing the patent, AdjustaCam’s suit became baseless after the district court’s Markman order. View "AdjustaCam, LLC v. Newegg, Inc." on Justia Law

District court properly awarded “exceptional case” legal fees. In 2005, Dow filed an infringement action against NOVA, which argued that its product did not infringe and that Dow lacked standing because it had transferred ownership of the patents. In 2010, the district court entered judgment against NOVA for $61 million. The Federal Circuit affirmed. In a separate appeal from an award of supplemental damages, the Federal Circuit found the asserted claims invalid as indefinite under the Supreme Court’s intervening “Nautilus” standard, but did not disturb the 2010 judgment relating to preverdict infringement. NOVA became aware of evidence allegedly showing that Dow had committed fraud in obtaining the 2010 judgment but was time-barred from moving to set aside that judgment. In 2013, NOVA filed a separate action in equity for relief from the 2010 judgment, asserting misrepresentation of Dow’s ownership of the asserted patents, based on the testimony of a former Dow employee in an unrelated tax case and on the testimony of Dow’s expert, about testing on the accused product during separate Canadian litigation. The Federal Circuit affirmed dismissal. The district court awarded Dow $2.5 million under 35 U.S.C. 285, which allows courts to award “reasonable attorney fees to the prevailing party” in “exceptional cases.” The court noted the weakness of NOVA’s litigating position and the manner in which NOVA pursued the case. The Federal Circuit affirmed. View "Nova Chemicals Corp. v. Dow Chemical Co." on Justia Law

The Tuschl patents relate to RNA interference, a process for “silencing” genes from expressing the proteins they encode, which may be useful in treating various diseases. In 2000, before the invention was reduced to practice, Dr. Tuschl published an article describing the discoveries. Weeks later, Dr. Bass published a mini-review that focused on Tuschl’s article and included her own hypotheses about enzymatic processes that may be responsible for the RNAi activity reported in Tuschl’s article. Tuschl read Bass’ article and recognized and successfully tested her hypothesis. Bass’ mini-review was cited as prior art during prosecution of the Tuschl patents, each of which issued. Bass sued for correction of ownership, claiming that Bass should be named as either a sole or joint inventor of the patents. During depositions, Bass made admissions undermining allegations that Bass reduced the Tuschl invention to practice and that Bass collaborated with the inventors. On the eve of the deadline for dispositive motions, Bass withdrew the sole inventorship claims, but not the joint inventorship claim. The district court rejected the joint inventorship claims on summary judgment, finding no evidence of collaboration between Bass and the Tuschl inventors. The district court declined a request for eight million dollars in attorney fees under 35 U.S.C. 285, The Federal Circuit affirmed, finding that the case was not objectively unreasonable when all reasonable inferences were drawn in Bass's favor. View "University of Utah v. Max-Planck-Gesellschaft" on Justia Law