Justia Legal Ethics Opinion Summaries

Backertop Licensing LLC and Lori LaPray appealed the U.S. District Court of Delaware’s orders requiring LaPray to appear in-person for testimony regarding potential fraud and imposing monetary sanctions for her failure to appear. The District Court identified potential misconduct in numerous related patent cases involving IP Edge and Mavexar, which allegedly created shell LLCs, assigned patents for little consideration, and directed litigation without disclosing their ongoing rights. The court was concerned that this arrangement concealed the real parties in interest and potentially perpetrated fraud on the court.The District Court ordered LaPray, the sole owner of Backertop, to produce documents and appear in-person to address these concerns. LaPray moved to set aside the order, citing travel difficulties and requesting to appear telephonically, which the court denied. The court rescheduled the hearing to accommodate her schedule but maintained the requirement for in-person testimony to assess her credibility. LaPray did not attend the rescheduled hearing, leading the court to hold her in civil contempt and impose a daily fine until she appeared.The United States Court of Appeals for the Federal Circuit reviewed the case. The court held that the District Court’s orders were within its inherent authority and not an abuse of discretion. The court found that Federal Rule of Civil Procedure 45, which limits the geographic range of subpoenas, did not apply to the court’s sua sponte orders. The court affirmed the District Court’s orders, emphasizing the necessity of in-person testimony to investigate potential misconduct and assess credibility. The monetary sanctions for LaPray’s failure to appear were also upheld. View "BACKERTOP LICENSING LLC v. CANARY CONNECT, INC. " on Justia Law

In 2011, PersonalWeb sued Amazon in Texas, alleging that Amazon’s S3 technology infringed PersonalWeb’s “True Name” patents. After the court construed the claim terms, PersonalWeb stipulated to dismissal. In 2018, PersonalWeb asserted the same patents against 85 Amazon customers for their use of Amazon S3. Amazon intervened and filed a declaratory judgment action. The customer cases and Amazon’s declaratory judgment action were consolidated. PersonalWeb represented that if it lost its “Twitch” customer case, it could not prevail in the other customer cases. The court stayed the other cases; the Twitch case and Amazon’s declaratory judgment action proceeded. PersonalWeb counterclaimed against Amazon, alleging that Amazon S3 infringed its True Name patents and accused another Amazon product, CloudFront, of infringement.The Federal Circuit affirmed partial summary judgment of non-infringement of the S3 product, based on claim preclusion and summary judgment of non-infringement as to CloudFront because, under the earlier claim construction, PersonalWeb admittedly could not prove infringement. The district court granted Amazon and Twitch attorneys’ fees and costs, 35 U.S.C. 285, determining that the case was exceptional because PersonalWeb’s claims related to Amazon S3 were objectively baseless in light of the Texas Action; PersonalWeb frequently changed positions; PersonalWeb unnecessarily prolonged litigation after claim construction foreclosed its infringement theories; PersonalWeb’s positions regarding the customer cases were unreasonable; and PersonalWeb submitted declarations that it should have known were not accurate. The Federal Circuit affirmed an award of $5,401,625.06, including $5,187,203.99 in attorneys’ fees. View "In re PersonalWeb Techs., LLC" on Justia Law

FMC and OSS own patents that cover structures for subsea oil and gas recovery. OSS sued, alleging that FMC’s Enhanced Vertical Deepwater Tree equipped with FMC’s Retrievable Choke and Flow Module infringed 95 claims across 10 OSS patents. The infringement question in the suit boiled down to whether fluid flows through FMC’s accused device as required by the OSS Patents. Finding that OSS failed to raise a genuine issue of material fact regarding whether FMC’s accused devices met the “divert” limitations of the OSS Patents, the district court granted FMC summary judgment.FMC sought Attorneys’ Fees and Non-Taxable Costs under 35 U.S.C. 285, which applies to “exceptional cases.” FMC argued that the Markman Order foreclosed any legitimate diverter infringement claims going forward, making OSS’s litigation position on infringement objectively baseless and that the substantive weakness of OSS’s infringement claims is shown by OSS’s failure to produce any admissible evidence. FMC alleged litigation misconduct by OSS as unreasonably prolonging the case.Applying the Supreme Court's “Octane Fitness” test the district court denied FMC’s motion. The Federal Circuit affirmed, rejecting FMC’s arguments that OSS’s case was objectively baseless after the claim construction order and that rejection of OSS’s evidence demonstrated the substantive weakness of OSS’s case. OSS that it had no obligation to revise its litigation strategy just because the Patent Board had invalidated diverter claims in different patents. View "OneSubsea IP UK Ltd. v. FMC Technologies, Inc." on Justia Law

UCANN sued Hemp for infringing its patent, entitled “Cannabis Extracts and Methods of Preparing and Using the Same.” UCANN filed for bankruptcy, which automatically stayed the litigation. After the bankruptcy petition was dismissed, the parties stipulated to the dismissal of the patent case. UCANN’s infringement claims were dismissed with prejudice; Hemp’s invalidity and inequitable conduct counterclaims were dismissed without prejudice.Hemp sought attorney fees under 35 U.S.C. 285, 28 U.S.C. 1927, and the court’s inherent authority, claiming that UCANN’s prosecution counsel had committed inequitable conduct by copying text from a piece of prior art into the specification of the patent and not disclosing it to the Patent and Trademark Office as prior art and UCANN’s litigation counsel purportedly took conflicting positions in its representation of UCANN and another client (the owner of the prior art). Hemp expressly notified the court that it did not seek any further proceedings, including a trial or evidentiary hearing, in connection with its motion. The district court denied the motion based on the existing record.The Federal Circuit affirmed upholding findings that Hemp failed to establish that it is the prevailing party under section 285, that this is an “exceptional” case warranting an attorney’s fee award, or that UCANN’s counsel acted in a vexatious or otherwise unreasonable manner. While Hemp’s position was extremely weak, it was neither “frivolous as filed” nor “frivolous as argued.” View "United Cannabis Corp. v. Pure Hemp Collective Inc." on Justia Law

Realtime filed patent infringement actions against Netflix in the District of Delaware. While that action was ongoing, Netflix filed petitions for inter partes review (IPR) and moved to dismiss the complaint, arguing patent ineligibility under 35 U.S.C. 101. Following the institution of the IPR proceedings and a recommendation from the Delaware magistrate finding certain claims ineligible, Realtime voluntarily dismissed the Delaware action—before the district court ruled on the magistrate’s findings. The next day, Realtime reasserted the same patents against Netflix in the Central District of California—despite having previously informed the Delaware court that transferring the Delaware action to the Northern District of California would be an unfair burden on Realtime. Netflix then moved for attorneys’ fees and to transfer the actions back to Delaware. Before a decision on either motion, Realtime again voluntarily dismissed its case.Netflix renewed its motion for attorneys’ fees for the California actions, the Delaware action, and IPR proceedings. The district court awarded fees for both California actions under 35 U.S.C. 285, and, alternatively, the court’s inherent equitable powers. The court declined to award fees for the Delaware action or IPR proceedings The Federal Circuit affirmed. The district court did not abuse its discretion in awarding fees under its inherent equitable powers or in denying fees for the related proceedings The court did not address whether the award satisfies section 285's requirements. View "Realtime Adaptive Streaming LLC v. Netflix, Inc." on Justia Law

Centripetal sued Cisco for the infringement of 10 patents relating to systems that perform computer networking security functions. Centripetal successfully requested that the case be reassigned to Judge Morgan, who had recently presided over a trial involving related technology and five of the same patents. While the case was pending, Judge Morgan sent the parties an email, stating that the previous day, his assistant had discovered that his wife owned 100 shares of Cisco stock valued at $4,687.99. He stated that the “shares did not and could not have influenced [his] opinion.” The disqualification statute, 28 U.S.C. 455, refers to financial interests held by family members. Centripetal had no objection to the judge’s continuing to preside over the case.Cisco sought recusal. Judge Morgan stated that section 455(b)(4) did not apply because he had not discovered his wife’s interest in Cisco until he had decided “virtually” every issue and that placing the Cisco shares in a blind trust “cured” any conflict, then found that Cisco willfully infringed the asserted claims and awarded Centripetal damages of $755,808,545 (enhanced 2.5 times to $1,889,521,362.50), pre-judgment interest ($13,717,925), and “a running royalty."The Federal Circuit reversed the denial of Cisco’s motion for recusal, vacated all orders and opinions of the court entered on or after August 11, 2020, including the final judgment, and remanded for further proceedings before a different district court judge. View "Centripetal Networks, Inc. v. Cisco Systems, Inc." on Justia Law

Hyatt is a prolific patent filer and litigant. In 1995, Hyatt filed “hundreds of extraordinarily lengthy and complex patent applications,” including the four at issue; he adopted an approach "that all but guaranteed indefinite prosecution delay” in an effort to submarine his patent applications and receive lengthy patent terms. The examination of these patents has cost the Patent and Trademark Office (PTO) millions of dollars. After adverse results regarding the patents at issue, Hyatt sued the PTO under 35 U.S.C. 145. The PTO moved to dismiss the actions for prosecution laches. The district court ordered the PTO to issue a patent covering some of the claims.While an appeal was pending, Hyatt sought attorney’s fees under the Equal Access to Justice Act as a “prevailing party” 28 U.S.C. 2412(b). The district court granted this motion in part. The Sixth Circuit vacated, holding that the PTO had carried its initial burden of demonstrating prosecution laches. The PTO sought reimbursement of its expert witness fees. Under 35 U.S.C. 145, “[a]ll the expenses of the proceedings shall be paid by the applicant.” The district court noted the American Rule presumption against fee-shifting and denied expert fees. The Federal Circuit vacated. Hyatt is not entitled to attorney’s fees under 28 U.S.C. 2412(b) and cannot be considered a prevailing party. The court affirmed the denial of expert fees because section 145 does not specifically and explicitly shift expert witness fees. View "Hyatt v. Hirshfeld" on Justia Law

The Navy began a program to design and build littoral combat ships (LCS) and issued a request for proposals. During the initial phase of the LCS procurement, FastShip met with and discussed a potential hull design with government contractors subject to non-disclosure and confidentiality agreements. FastShip was not awarded a contract. FastShip filed an unsuccessful administrative claim, alleging patent infringement. The Claims Court found that the FastShip patents were valid and directly infringed by the government. The Federal Circuit affirmed.The Claims Court awarded FastShip attorney’s fees and expenses ($6,178,288.29); 28 U.S.C. 1498(a), which provides for a fee award to smaller entities that have prevailed on infringement claims, unless the government can show that its position was “substantially justified.” The court concluded that the government’s pre-litigation conduct and litigation positions were not “as a whole” substantially justified. It unreasonable for a government contractor to gather information from FastShip but not to include it as part of the team that was awarded the contract and the Navy took an exceedingly long time to act on FastShip’s administrative claim and did not provide sufficient analysis in denying the claim. The court found the government’s litigation positions unreasonable, including its arguments with respect to one document and its reliance on the testimony of its expert to prove obviousness despite his “extraordinary skill.” The Federal Circuit vacated. Reliance on this pre-litigation conduct in the fee analysis was an error. View "FastShip, LLC v. United States" on Justia Law

ECT sued ShoppersChoice for infringement of its 261 patent, directed “to systems and methods that notify a party of travel status associated with one or more mobile things. ShoppersChoice challenged claim 11 as patent-ineligible, 35 U.S.C. 101. ShoppersChoice moved to join a patent eligibility hearing set in a parallel lawsuit, in which ECT alleged claim 11 infringement against other companies. The court conducted a consolidated hearing and invalidated claim 11 as directed to the abstract idea of providing advance notification of the pickup or delivery of a mobile thing. The Federal Circuit affirmed, holding that “the claim only entails applying longstanding commercial practices using generic computer components and technology.” ShoppersChoice sought attorney fees, citing evidence that ECT sent standardized demand letters and filed repeat infringement actions to obtain low-value “license fees” and force settlements. Before the court ruled, a California District Court awarded attorney fees against ECT in another case related to the patent.The Federal Circuit vacated a holding that the case was not exceptional. A pattern of litigation abuses characterized by the repeated filing of patent infringement actions for the sole purpose of forcing settlements, with no intention of testing the merits of one’s claims, is relevant to a district court’s exceptional case determination. The court clearly erred by failing to consider the objective unreasonableness of ECT’s alleging infringement of claim 11 against ShoppersChoice. View "Electronic Communication Technologies, LLC v. ShoppersChoice.Com, LLC" on Justia Law

Almirall markets ACZONE®, a prescription medication used to treat acne. Almirall’s 926 and 219 patents are listed in the FDA Orange Book as claiming ACZONE. Before seeking approval to market a generic version of ACZONE, Amneal sought inter partes review (IPR), challenging claims of the patents. Amneal filed its Abbreviated New Drug Application with the FDA. Almirall sued, alleging infringement of only the 219 patent. Amneal counterclaimed that the 926 patent is invalid and is not infringed. Almirall offered to enter into a covenant-not-to-sue on the 926 patent upon the dismissal of the IPR. With the parties unable to reach a settlement, the underlying IPR on the 926 patent proceeded. The Patent Board found claims of the 926 patent not unpatentable. Amneal appealed but later moved to voluntarily dismiss its appeal.Almirall agreed to the dismissal but argued that Amneal litigated in an unreasonable manner by continuing to pursue the IPR after the covenant-not-to-sue was offered, and Almirall sought removal of the patent from the Orange Book. Almirall sought (35 U.S.C. 285) fees and costs incurred from the date settlement negotiations ended to the date of the IPR trial. The Federal Circuit denied the request. Even if section 285 is not limited to district court proceedings, the plain meaning of its reference to “[t]he court” speaks only to awarding fees incurred during, in close relation to, or as a direct result of, judicial proceedings, not to fees incurred for work in Patent Office proceedings before the court asserted jurisdiction. View "Amneal Pharmaceuticals LLC v. Almirall, LLC" on Justia Law