U.S. District Chief Judge Claudia Wilken, Northern District of California
U.S. District Chief Judge Claudia Wilken, Northern District of California (Hillary Jones-Mixon / The Recorder)

SAN FRANCISCO — U.S. District Judge Claudia Wilken sounded poised Thursday to award “half a loaf” of exceptional case attorney fees—still possibly as much as $5 million—to a quintet of technology companies led by Apple Inc. and Hewlett-Packard Co.

The tech giants and three smaller networking outfits say IP licensing company Linex Technologies Inc. peddled the same losing claims before two federal courts and the International Trade Commission despite never obtaining a favorable construction of its patent on spread spectrum signals. Litigation was “pursued in three different courts on three different occasions with substantially similar results,” Wilmer Cutler Pickering Hale and Dorr partner William Lee argued Thursday for Apple and HP.

Finnegan, Henderson, Farabow, Garrett & Dunner partner Vincent Kovalick responded that companies pursue patent litigation on parallel tracks before the ITC and the district court all the time, and that Linex actually prevailed on eight of nine claim terms before Wilken in the U.S. District Court for the Northern District of California. Though she eventually granted summary judgment of noninfringement, “it’s still an ordinary patent case,” Kovalick said. “Somebody has to win and somebody has to lose.”

The technology companies are urging Wilken to award fees under the U.S. Supreme Court’s new Octane Fitness standard for exceptional cases.

Wilken seemed somewhat sympathetic. Suing in two forums is typical, but “maybe three is over the top,” she said. What’s “more unusual,” she added later, is that Linex withdrew its claim from the ITC after staff recommended a finding of noninfringement, then renewed similar claims in her court. “I see that argument,” she told K&L Gates partner Michael Bettinger, representing Aruba Networks Inc., Meru Networks Inc. and Ruckus Wireless Inc.

Wilken also seemed to appreciate that Apple and HP are seeking fees only on the spread spectrum claim before her, an amount they estimate as 53 percent of their total billings. “Half a loaf is better than none,” Wilken told Bettinger, who was seeking full ITC and district court fees—about $3.8 million—for his clients.

Fair pricing seemed on Wilken’s mind throughout the hearing. When Lee at one point said Apple and HP are entitled to “nuisance costs,” Wilken interrupted. “It’s a pretty high bar there,” she told him, referring to their $3.6 million request.

The bigger problem might be justifying the 53 percent rationale to the U.S. Court of Appeals for the Federal Circuit, Wilken suggested. “The Ninth Circuit likes to say ‘show your work’”—explain who billed for exactly what services, Wilken said. “I’m wondering if a hypothetical number would fly legally.”

Lee said the tech companies could come back with a more detailed claim, or perhaps even settle with Linex if Wilken were to find exceptional case liability.

At least on Thursday, settlement sounded like a nonstarter. Kovalick argued gamely for Linex that no such liability should attach, even under Octane Fitness. Linex, he said, was “doing everyone a favor” by dropping the ITC claim, “saving everyone a million dollars.” That didn’t appear to be a winning argument. But Kovalick did seem to get traction when he argued that Linex dropped the case not because of ITC staff’s claim construction, but because it concluded that his client—”a three-person think tank”—didn’t represent a domestic industry.

“I have no way of knowing” the true reason for dropping the case, Wilken told Lee, sounding exasperated.

Contact the reporter at sgraham@alm.com.