IP Newsflash - August 2014 #3

by Akin Gump Strauss Hauer & Feld LLP


Federal Circuit Vacates Injunction and Contempt Order After Reexamination Finds At-Issue Claims Invalid

On July 25, the Federal Circuit vacated an injunction and $18 million civil contempt fine in a patent infringement case after a subsequent reexamination invalidated the claims at issue. In the district court, a jury found that the defendant had infringed a number of claims of plaintiffs’ electronic sourcing patents. The court issued an injunction, but did not award damages, because the plaintiffs’ damages expert was excluded.

In defendant’s initial appeal, the Federal Circuit determined that only one of the claims was valid and infringed, and remanded the case to have the injunction modified. During remand, the court modified the injunction, but also ordered the defendant to pay a $18 million civil contempt fine for violating the injunction. During this appeal, the USPTO cancelled the sole claim at issue after finding it invalid, and that ruling was affirmed by the Federal Circuit. The defendant appealed both the injunction and contempt rulings, arguing that they could not be upheld as a result of the reexamination.

The Federal Circuit vacated both the injunction and the contempt fine. The court noted that “[i]t is well established that an injunction must be set aside when the legal basis for it has ceased to exist.” With respect to the contempt ruling, the court distinguished between criminal and civil contempt, noting that criminal contempt orders are a form of punishment, whereas civil contempt proceedings are to ensure full compensation. With civil contempt fines, the plaintiff’s right to the compensatory fine “is dependent upon the outcome of the basic controversy.” Because the PTO had invalidated the sole claim at issue, the court vacated the contempt fine.

ePlus Inc. v. Lawson Software Inc., Nos. 2013-1506, 2013-1587 (Fed. Cir., July 25, 2014).

- Author: Romeao Jennings


Intel's Inaction Cited in Denial of its Motion for Attorney’s Fees

After successfully defending against Stragent’s patent infringement lawsuit involving video compression technology, defendant Intel filed a motion to recover its attorney’s fees under section 285 of the Patent Act, which permits a court to award fees in "exceptional" patent cases. Intel based its motion on the substantive lack of strength of Stragent’s litigating positions and Stragent’s conduct during litigation.

The Supreme Court recently relaxed the standard for attorney's fees under Section 285 in Octane Fitness, LLC v. Icon Health & Fitness, Inc., 134 S. Ct. 1749 (2014), and Judge Timothy Dyk — sitting by designation in the Eastern District of Texas — held that even under the relaxed standards of Octane Fitness, Intel was not entitled to recover its attorney’s fees.

Describing Intel's motion as one “primarily based on the fact that Stragent made losing arguments,” Judge Dyk clarified that Stragent’s arguments “were losing arguments, but they were not frivolous.” Of particular concern to Judge Dyk was Intel’s inaction in failing to move for summary judgment of non-infringement on the basis of the claim limitation at issue. Because Intel’s motion for fees was based partly on its criticism of Stragent’s "implausible" theory of infringement, Judge Dyk doubted Intel always believed Stragent’s theory was frivolous when it never moved for summary judgment. Judge Dyk also questioned Intel’s complaints of bad faith discovery when it, “never sought discovery sanctions against Stragent or even a court ruling limiting the scope of discovery.”

Quoting Octane Fitness, Judge Dyk concluded that the case was not exceptional and noted, “this case is not one that ‘stands out from others with respect to the substantive strength of [Stragent’s] litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.’ Octane, 134 S. Ct. at 1756.”

Stragent, LLC v. Intel Corp., No. 6:11-cv-00421 (E.D. Tex. August 6, 2014,. Order) (Dyk, T.B.).

- Author: John Grantham


Joint Defense Agreement with IPR Petitioner Does Not Require Estoppel as a Condition of Stay

On August 7, 2014, Magistrate Janie Mayerson granted defendant’s motion for stay pending inter partes review (IPR) of the asserted patents and rejected plaintiff's request that defendant be estopped as a condition of the stay. In April 2014, a third party filed two IPR petitions relating to the asserted patents. The Patent Trial and Appeal Board (PTAB) issued an order for one of the two petitions, thereby instituting an IPR proceeding over one of the five asserted patents. At oral argument it was revealed that: [i] defendant had entered into a joint defense agreement (JDA) with the IPR petitioner; and [ii] the same law firm represented defendant and the IPR petitioner. Plaintiff argued that in light of the JDA and common law firm nexus, defendant was not “divorced from what is going on” with the IPRs and as such, any stay should be conditioned on defendant agreeing to be estopped from asserting the same grounds raised by the petitioner in the IPR proceeding. In response, defendant represented that it did not participate in, control, support, or pay for the preparation or filing of the IPR petitions. 

In granting the stay without estoppel, the court reasoned that estoppel was not necessary because PTAB decisions become part of a patent’s file history and as such, become part of the record for any court to consider in addressing those same arguments. In addressing plaintiff’s fairness argument that it would be unfair for defendant to obtain the benefit of IPR proceedings without being bound by the arguments raised therein, the court reasoned that it would be more unfair to bound the defendant to arguments raised by a third party in a proceeding that defendant had no control over. Accordingly, the court found that regardless of the JDA and use of the same law firm by defendant and petitioner, estoppel was not a necessary condition to the stay.

Intellectual Ventures II LLC v. US Bancorp et al., No. 13 Civ. 2071 (D. Minn. August 7, 2014) (Mayeron, M.J.).

- Author: Eric R. Garcia

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Akin Gump Strauss Hauer & Feld LLP | Attorney Advertising

Written by:

Akin Gump Strauss Hauer & Feld LLP

Akin Gump Strauss Hauer & Feld LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.