The Honorable Sherry R. Fallon in Broadsoft, Inc. v. Callwave Communication, LLC, Civil Action No. 13-711-RGA (D.Del. August 8, 2019) issued a Magistrate Judge Opinion, pursuant to 28 U.S.C. § 636(b)(1)(A), Federal Rule of Civil Procedure 72(a) and District of Delaware Local Rule 72(a)(2), denying Plaintiff Broadsoft, Inc.’s motion to declare the case exceptional under 35 U.S.C. §285. “Section 285 provides that ‘[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party’” 35 U.S.C. § 285.
Broadsoft was the prevailing party in the action, wherein it asserted claims for declaratory judgment of non-infringement and invalidity of four of Defendant Callawave’s patents, including U.S. Patent Numbers 8,351,591 (“the ‘591 patent”) and 7,822,188 (“the ‘188 patent”). Id. at *1. The Court entered judgment in favor of Broadsoft in the action after granting Broadsoft’s motion for judgment on the pleadings based on patent ineligibility under 35 U.S.C. § 101 and granting Broadsoft’s motion for summary judgment of invalidity of the ‘591 and ‘188 patents. Id. at *2. Thus, the only question to be decided by the Court with respect to Broadsoft’s motion seeking attorney fees under § 285 was whether the case was “exceptional.” Id. at *3.
When considering whether a case is exceptional, district courts exercise their discretion on a case-by-case basis and should consider the totality of the circumstances. Id. As the U.S. Supreme Court set forth in Octane Fitness, cases that merit an award of attorney fees include “the rare case in which a party’s unreasonable conduct – while not necessarily independently sanctionable – is nonetheless so ‘exceptional’ as to justify an award of attorney fees” or “a case presenting either subjective bad faith or exceptionally meritless claims.” Id. (citations omitted).
After analyzing the totality of the circumstances in the instant action, the Court concluded that neither Callwave’s substantive positions in the case nor its litigation conduct were so unreasonable or vexatious to warrant finding the case exceptional and awarding attorneys’ fees pursuant to §285. Id. at *3-13. Thus, the Court denied Broadsoft’s motion seeking to declare the case exceptional under 35 U.S.C. §285.
A copy of the Memorandum Opinion is attached.
This ruling is another reminder for counsel and their clients that declaring a case “exceptional” and “award[ing] attorneys’ fees under §285 is not intended to be an ‘ordinary thing in patent cases,’ and that it should be limited to circumstances in which it is necessary to prevent a ‘gross injustice’ or bad faith litigation.” Id. at *13 (citations omitted).
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