Last month, in Octane Fitness v. Icon Health and Fitness, the U.S. Supreme Court gave district court judges more leeway in awarding attorney fees in patent cases. But at least so far, the decision hasn’t done much to prompt judges to shift fees to losing plaintiffs.
Earlier this month we reported that a judge in East Texas declined to shift fees against a patent plaintiff in a failed case against medical device company Globus Medical Inc. On Tuesday, lawyers at Simpson Thacher & Bartlett struck out in an attempt to convince a federal judge in a long-running patent lawsuit to award attorney fees to its client, a shuttered subsidiary of Qualcomm Incorporated called FLO TV Incorporated.
In this five-page decision, U.S. District Court Judge Richard Andrews in Wilmington denied FLO TV’s request to force plaintiff EON Corp. IP Holdings LLC to pay its fees. EON is represented in the case by counsel at Reed & Scardino. [Hat tip to Villanova University School of Law professor Michael Risch, who tweeted the ruling on Thursday.]
EON originally filed suit in September 2010 against 17 handset makers, wireless networks and service providers such as FLO TV, Qualcomm’s early, ill-fated attempt at mobile TV streaming. EON alleged that the defendants infringed its patent relating to interactive television systems.
As the case progressed, the prospect of a large monetary judgment against FLO TV steadily faded. FLO TV announced that it was shutting down operations in March 2011. Since the company wasn’t aware of EON’s patent until the lawsuit was filed, there was only about a six-month period subject to any judgment. And EON entered settlements with carriers and handset makers who sold the majority of the devices offering FLO TV service, leaving only four devices and a single wireless network at issue.
After a claims construction decision favorable to the defendants, Andrews granted a defense motion for summary judgment of invalidity in March 2014. FLO TV’s counsel moved for attorney fees two weeks later.
FLO TV’s lawyers at Simpson argued in their motion for fees that EON should have either dropped the case against FLO TV or settled, since litigation costs dwarfed any potential recovery. FLO TV spent “millions” defending the case, the company said.
Andrew concluded Tuesday that the dubious economics of the litigation didn’t make the case “exceptional”—and thus susceptible to fee-shifting—even under the Supreme Court’s Octane standard. “It cannot be the case that a plaintiff may be subjected to monetary sanctions for failing to drop a case against a defendant if the cost of litigation exceeds the potential recovery,” Andrews wrote.
EON’s lawyer, John Hendricks at Reed & Scardino, told us it was “pushing the envelope” for FLO TV to demand fees in the case. “On the other hand, with the Octane decision there’s a lot of uncertainty,” he said. Hendricks said that any lawyer facing a fee-shifting motion in the current landscape has to take it seriously.
We reached out to Patrick King at Simpson Thacher, who argued the fee motion for FLO TV, but didn’t hear back.
For his part, Villanova law professor Risch says he’s not convinced that the Octane decision is going to lead to significantly more fee awards. “Judges see a lot of litigation, and they have a good idea of what exceptional behavior is,” he said. “Is it the patentee’s fault that it costs $5 million to try a patent case, or is it the system’s fault?”