Attorneys fees denied in ULTRATEC v. SORENSON COMMUNICATIONS

Defendants had prevailed on a JNOV [ After trial, the court granted defendants' motion for judgment as a matter of law that the '398 patent is invalid as obvious. ] and sought a fee award.

From the decision:



The question is not governed by clear-cut rules, but the court's discretion is guided by the purpose of fee-shifting under § 285, which is to dissuade unreasonable lawsuits and litigation tactics by compensating the prevailing party for enduring them. See, e.g., Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920, 1930-31 (2015). The court should not award fees to punish a patent holder simply for failing to prove infringement. Gaymar Indus., Inc. v. Cincinnati Sub-Zero Prods., Inc., 790 F.3d 1369, 1373 (Fed. Cir. 2015) (citing Octane, 134 S. Ct. at 1753). A litigation position that seems obviously wrong after a decision on the merits might have seemed reasonable when judged without the benefit of hindsight. And fee-shifting in routine cases would deter legitimate efforts to enforce patent rights. So the court will award fees only if there has been some [*3] conduct that warrants imposing on the losing party the additional burden of paying the other side's attorney fees. The court need not find that the losing case was frivolous, or that it was brought in bad faith for an illegitimate purpose (although that would clearly warrant fee-shifting). See Lumen View Tech., LLC v. Findthebest.com, Inc., 24 F. Supp. 3d 329, 335 (S.D.N.Y. 2014), aff'd, 811 F.3d 479 (Fed. Cir. 2016). Such clearly inappropriate cases and tactics would be sanctionable pursuant to Rule 11 or the court's inherent powers even without § 285.

Because the purpose of § 285 is to compensate parties forced to defend against unreasonable litigation and to deter improper conduct, a good way to think of the question is this: was the losing party's case so unusually weak on the merits that it suggests an improper purpose or demonstrates irresponsible conduct that should be deterred? Or, is there other evidence, besides substantive weakness on the merits, that suggests an improper purpose? With these questions in mind, the court turns to the parties' arguments.
Defendants argue that plaintiffs knew their patent was invalid as obvious over their own prior art, the CapTel trials combined with U.S. Patent Publication No. 2002/0085685 (the
'685 publication), yet argued during litigation that the CapTel trials weren't [*4] prior art, but rather were an experimental use. They complain that plaintiffs mischaracterized the evidence concerning the trials and made "objectively baseless arguments that contradicted well-settled legal principles" concerning the experimental-use exception. Dkt. 735, at 13.

(...)

So although plaintiffs' position concerning the CapTel trials was not ultimately successful, it was far from unreasonable. Whether the trials were an experimental use was a close call, especially in the uncharted territory of applying the experimental use exception within the context of prior art.



citation: 2017 U.S. Dist. LEXIS 148132 (WD Wisc 2017)