Most parties to litigation have to pay their own attorneys’ fees. The patent statute includes an exception – in “exceptional” circumstances, the successful party in patent infringement litigation can collect attorneys’ fees from the losing party.
Not every losing litigant is liable for the other party’s fees. The reasonableness of the party’s litigation position and the unreasonableness of the party’s conduct are factors considered by the trial court. Plaintiffs who perform no investigation, have no facts to back up their allegations, or who make unreasonable interpretations of their patent claims have been tagged for fees.
The case of Lumen View Tech. v Fingthebest.com, Inc, is illustrative. Lumen View was a non-practicing entity that was created to acquire a particular patent and after acquisition immediately initiated multiple lawsuits for infringement. The trial judge said:
No reasonable litigant could have expected success on the merits. … [T]he most basic pre-suit investigation would have revealed this fact. Not only that, FTB’s attorneys informed Lumen of the baselessness of the suit from the onset of litigation and repeatedly sought clarification as to the nature of the alleged infringement.
The trial judge clearly was offended by Lumen’s conduct:
…Lumen was motivated… by its plan to extract a nuisance settlement from FTB on the theory that FTB would rather pay an unjustified license fee than bear the costs of the threatened expensive litigation. …The nature of Lumen’s complaint, the absence of any reasonable pre-suit investigation, and the number of similar lawsuits filed within a short time frame all indicate that Lumen’s instigation of baseless litigation is not isolated to this instance, but is instead part of a predatory strategy aimed at reaping financial advantage from the inability or unwillingness of defendants to engage in litigation against even frivolous patent lawsuits.
The judge found the matter ‘exceptional’ and awarded attorneys’ fees of $149,000 to Findthebest; however, the judge was not done. She doubled the award to almost $300,000.00 to deter further frivolous litigation. On appeal, the Court of Appeals for the Federal Circuit affirmed the trial court’s finding of an ‘exceptional’ case warranting attorneys’ fees, but reversed the doubling of the damages because enhanced fee awards are not authorized by the statute.
The bottom line: if you’re a patent infringement plaintiff, investigate your case before you file and be prepared to show that the defendant infringes. If you’re an infringement defendant that does not infringe, explain that fact to the patent owner early and often.
— Robert Yarbrough, Esq.