Victims of Patent Trolls Get Re-Sharpened Weapon in their Defense

by Winstead PC
Contact

Fee-shifting in patent infringement suits has been authorized by statute since 1952, for application in “exceptional cases.” [1] For the past nine years, that statute has not often been applied as a result of the Federal Circuits’ decision in Brooks Furniture, which requires the prevailing party in a patent infringement action seeking attorney’s fees establish either: (1) their opponent had committed an act independently sanctionable under federal rules; or (2) that the claim against them was objectively baseless and subjectively brought in bad faith. [2] Given that both tests were governed by a “clear and convincing” evidentiary standard, the fee-shifting statute was effectively neutered and the modern patent troll – a non-practicing patent holding entity hoping only to coerce a licensing fee via the threat of litigation – had little to fear when asserting their potentially dubious rights.

The Supreme Court has recently taken steps that may loosen the Federal Circuit’s “unduly rigid” definition of that fee-shifting statute in April’s Octane Fitness decision. In place of structured tests the Supreme Court returned to pure judicial discretion – “exceptional cases” in the post-Octane Fitness world are to be determined on individualized basis that factors in any and all aspects of the litigation the presiding judge finds relevant. [3]

In the Southern District of New York, Justice Denise L. Cote swung the sword handed to her in Octane Fitness. Cote awarded attorney’s fees to a plaintiff who had been met with threats of extensive litigation, including “all motion practice as well as protracted discovery.” The court didn’t just look at what the defendant’s said and did with regards to the plaintiff, but analyzed their behavior in general, finding they employed a “predatory strategy” that resulted in a number of nearly identical suits filed in a small time frame. The plaintiff had even continued to assert their claim despite leaving it undisputed that the defendant did not infringe the plaintiff’s patent. Without utilizing the term, Cote made it clear that the plaintiff was a patent troll and one who would be paying for his own day in court in addition to his opponent’s. [4] Other courts are following in Cote’s footsteps and using Octane Fitness to punish plaintiff’s bringing questionable patent infringement claims. [5]

The transition back to freer fee-shifting is undoubtedly a positive development in the fight against patent trolling. However, concerns still exist for defendants, namely that even should they prevail in an action the judge might not find the behavior of the opposing party offensive enough to grant fees, even under the relaxed Octane Fitness framework. For a litigant who fears the worst outcome, the same motivation to settle the suit early on in the judicial process still exists and the patent troll behavior isn’t curtailed.

At the least, however, Octane Fitness has freed courts’ hands from the Federal Circuit’s rules and Lumen View has given the legal world an idea of what behaviors will put those hands into motion. Given the broad grant of judicial discretion and case-by-case basis of application, different profiles of an “exceptional case” will emerge over the coming years and it will take a measured, focused, and sometimes brave approach to prove victorious in and help minimize vexatious patent litigation.

 [1] See 35 U.S.C. § 285.

[2] Brooks Furniture Mfg. v. Dutailier Int’l, Inc., 393 F.3d 1378, 1381-2 (Fed. Cir. 2005).

[3] Octane Fitness, LLC v. Icon Health & Fitness, Inc., 134 S. Ct. 1749, 1755-6 (2014).

[4] Lumen View Tech. v. Findthebest.com, 1:13-CV-03599, 2014 U.S.Dist. LEXIS 75209, at *5-*6 (S.D.N.Y. May 30, 2014).

[5] See Precision Links Inc. v. USA Prods. Grp., 3:08-CV-00576, 2014 U.S. Dist. LEXIS 85694 (W.D.N.C. Jun. 24, 2014).

Authors: Kyle Dugan* and Robert Shaddox

*BENJAMIN N. CARDOZO SCHOOL OF LAW, Candidate for Juris Doctor, June, 2015

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.

© Winstead PC | Attorney Advertising

Written by:

Winstead PC
Contact
more
less

Winstead PC 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):
hide

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.

Security

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.