Friday, July 10, 2020


As to an award of attorneys fees:

We review a district court’s denial or grant of attorney
fees under § 285 for abuse of discretion. See Highmark Inc.
v. Allcare Health Mgmt. Sys., Inc., 572 U.S. 559, 561 (2014);
see also ThermoLife Int’l LLC v. GNC Corp., 922 F.3d 1347,
1356 (Fed. Cir. 2019) (“We review a district court’s grant of
attorney[] fees under § 285 for abuse of discretion.”). An
abuse of discretion occurs where a district court makes “a
clear error of judgment in weighing relevant factors or in
basing its decision on an error of law or on clearly erroneous factual findings.”
Bayer CropScience AG v. Dow AgroSciences LLC, 851 F.3d 1302, 1306 (Fed. Cir. 2017)
(internal quotation marks and citation omitted). “A factual
finding is clearly erroneous if, despite some supporting evidence,
we are left with the definite and firm conviction
that a mistake has been made.” Insite Vision Inc. v.
Sandoz, Inc., 783 F.3d 853, 858 (Fed. Cir. 2015) (internal
quotation marks and citation omitted). A district court
must “provide a concise but clear explanation of its reasons
for the fee award.” Hensley v. Eckerhart, 461 U.S. 424, 437
(1983); see In re Rembrandt Techs. LP Patent Litig., 899
F.3d 1254, 1276 (Fed. Cir. 2018).

The manner of litigation

The District Court clearly erred by failing to address
ECT’s manner of litigation and the broader context of
ECT’s lawsuit against ShoppersChoice. See generally
J.A. 1626–28. These are relevant considerations. See SFA
Sys., LLC v. Newegg Inc., 793 F.3d 1344, 1350 (Fed.
Cir. 2017) (“[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.”). Before the District Court was evidence that ECT sent standardized demand letters and filed repeat patent
infringement actions to obtain low-value “license fees” and
forcing settlements. See Motion for Attorney Fees at 5. For
example, ShoppersChoice provided the District Court with
evidence that, between 2011 and 2015, ECT, under its former name Eclipse, filed lawsuits against at least 150 defendants, alleging infringement of claims in the ’261 patent
and in other patents in the ’261 patent’s family. Id. at 4.
This number does not reflect the additional pre-litigation
demands made by ECT. See generally id. ECT’s demand
for a low-value settlement—ranging from $15,000 to
$30,000—and subsequent steps—such as failure to proceed
in litigation past claim construction hearings—indicates
the use of litigation to achieve a quick settlement with no
intention of testing the strength of the patent or its allegations of infringement. See id. at 4–6. Not only did ShoppersChoice provide the District Court with a list of other
court proceedings involving ECT and its demand letters involving claim 11, id. at 5, ShoppersChoice filed the True
Grit opinion with the District Court prior to its attorney fee
determination, J.A. 2155–56.
Indeed, the True Grit opinion reveals problems with
the District Court’s analysis. The opinion provided a detailed account of ECT’s practice of seeking nuisance-value
license fees. True Grit, 2019 WL 3064112, at *8–9. In the
decision, the California District Court concluded that
awarding attorney fees against ECT was appropriate, either “consider[ing] only the litigation history of ECT (as
both ECT and Eclipse IP) or the entire history of the entities that True Grit has demonstrated are related (including
Shipping & Transit[, LLC (‘S&T’)]) the [California District]
Court can discern a clear pattern of serial filings, and also
several (and presumably many more) instances of threats
of litigation, intended only to obtain quick settlements[.]”
Id. at *9. In reviewing ECT’s actions, the California District Court explained that “ECT’s immediate demand for a
low[-]value settlement, apparent willingness to reduce that
amount to avoid any challenge to its patent, and immediate
provision of a [covenant not to sue] to True Grit once the
declaratory judgment action was filed demonstrate ECT’s
‘in terrorem’ tactics—threatening litigation in hopes of a
quick settlement with no intention of ever testing either
the strength of its patent or its allegations of infringement.” Id. Moreover, the California District Court took
judicial notice of “yet another litigious entity,” S&T, “seeking nuisance value patent ‘rents’ that is helmed by many of
the same individuals that control ECT[.]” Id. at *5.


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