One of the questions Courts have to answer when presented with an application for attorneys' fees under 35 U.S.C. § 285 is when to start the clock running on fees. The analysis can include objective and subjective factors, but in general (in this District at least) a patentee has to push through multiple warning signs and opportunities for reevaluation before its continued assertion of infringement will justify an award of fees.
Earlier this week, Judge Andrews awarded fees for plaintiffs' continued assertion of infringement after (1) an adverse claim construction decision and (2) subsequent notice from the defendant of non-infringement. After the Court granted summary judgment of non-infringement, the defendant moved for fees.
Judge Andrews quickly disposed with the "prevailing party" requirement under Section 285 - there was no dispute that the defendant was the prevailing party.
As for whether the case was "exceptional," Judge Andrews first reviewed the claim construction proceedings:
The three asserted patent claims require a programmable communicator device that can control the data transmitted between at least two devices. . . . After a Markman hearing, I construed the claim term, “numbers to which the programmable communicator device is configured to and permitted to send outgoing wireless transmissions” as “the exclusive set of numbers to which the programmable communicator is limited to send any outgoing wireless transmissions.” . . . In short, the claimed device could only send wireless transmissions to the “exclusive set of numbers.”
(emphasis added). Despite this limitation, plaintiffs continued to assert infringement of devices that could send outgoing wireless transmissions to numbers other than "the exclusive set" of numbers in the Judge's claim construction. In addition, plaintiffs continued to press this claim in opposition to defendant's motion for summary judgment of non-infringement.
As Judge Andrews explained, plaintiffs' position "disregards the Markman memorandum, which clearly stated that there are no sub-types of transmissions which are not limited to the exclusive set of numbers." Moreover, it ignored the purpose of the invention, which was " to create a restricted-use mobile phone for a child to prevent 'uncontrolled calling.’”
Judge Andrews thus found that plaintiffs' infringement position - which plaintiffs continued to press after the adverse claim construction - "objectively baseless."
After my claim construction order, Plaintiffs had the option of stipulating to non-infringement and appealing the adverse claim construction. Alternately, Plaintiffs could have dropped the case. Instead, Plaintiffs unreasonably prolonged litigation by asserting an infringement position that was contrary to the claim construction. I find that this renders the case exceptional. . . . [Plaintiffs'] argument was meritless and they failed to offer any other evidence that the accused products infringed.
Judge Andrews awarded fees starting on the date of a notice letter from defendant two months after the Markman ruling that foreclosed plaintiffs' infringement theory: "At this point, Plaintiffs knew about the adverse claim construction and were on notice that Sierra’s products did not meet the 'exclusive set of numbers' claim limitation. . . . Plaintiffs should have been aware that their litigating position was exceptionally weak"
The Judge declined to award pre-notice-letter fees, finding that defendant had failed to show that plaintiffs had engaged in vexatious litigation. He also declined to award expert fees, finding no proof of fraud or bad faith.
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