CAFC analyzes "exceptional case" of 35 USC § 285 ; Newegg loses appeal in SFA case

Mark Lemley argued for the unsuccessful defendant-appellant in the case
SFA v. Newegg. Richard Frenkel was also on the appellant team.


Newegg argues that the district court erred in finding
that this case was not exceptional because :

(1) the district court’s analyses
on claim construction and indefiniteness
were wrong and, under the correct analyses,
SFA’s law-
suit is meritless; and
(2) SFA maintained and filed this
lawsuit in bad faith for the improper purpose of obtaining
a nuisance value settlement
(“the unreasonable manner
in which the case was litigated”).
Octane Fitness, 134 S. Ct. at 1756.
Although, under Octane Fitness, we ulti-
mately consider these issues together under the “totality
of the circumstances,” id., it helps to first parse Newegg’s
arguments because Newegg argues that we should apply
different standards
of review to them.



As to unreasonable litigation:


Newegg asserts that SFA brought this suit for the
improper purpose of obtaining a nuisance value settle-
ment. Newegg alleges that SFA dragged out the litigation
to increase Newegg’s litigation costs and that SFA dis-
missed the suit as soon as it realized that Newegg was not
going to settle.

(...)

We agree with Newegg, accordingly, that 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 under §285.


http://www.cafc.uscourts.gov/images/stories/opinions-orders/14-1712.Opinion.7-8-2015.1.PDF
link: