Tuesday 3 May 2016
Patent Monetization Entities Generally Asserting Ordinary "Meritfull" Claims?
The Recorder has published data and conclusions concerning a study of district court awards of attorney fees post-U.S. Supreme Court decisions Octane Fitness and Highmark. Both Octane Fitness and Highmark concerned the availability of attorney fees. In the United States, parties generally bear the cost of their attorney fees absent an exception. For patent infringement, there is a statute specifically allowing for the award of attorney fees for “exceptional” cases. The U.S. Court Appeals for the Federal Circuit interpreted that statute to require a very high standard for proving attorney fees. Some believed that this high standard did not provide a strong enough disincentive to prevent so-called “patent trolls” from bringing weak nuisance suits for licensing fees. In the Octane Fitness case (2013), the U.S. Supreme Court rejected the Federal Circuit’s high standard and ruled that “exceptional” merely meant a case that was out of the ordinary with respect to substantive litigation strength of position or how the case was litigated.
The study apparently finds that about half of the awards of attorney fees apply to competitor cases and the other half to non-practicing entities. Interestingly, the awards against non-practicing entities “have often been against small individual inventors, not Intellectual Ventures, Round Rock Research, IP Nav and other 800-pound gorillas that monetized patent litigation.” The article does discuss how Acacia Research Group, a supposed NPE, is exceptional with four awards against it for a total of around US $1.8 million. The article appears to speculate that the awards against small individual inventors were cases where the small individual inventors (inexperienced players) apparently perhaps overvalued their case based on the law and facts. There appears to be a difference in awards based on the district in which the case was filed. It does, however, seem to make sense that in the current climate sophisticated monetizers would only bring relatively strong cases (maybe in the E.D. of Texas). The article also notes that district court judges are mixed in considering the practicing status of the party in awarding fees. Finally, the article discusses a recent US $7.8 million award of fees in the Northern District of California against the Alzheimer's Institute to Eli Lilly and Elan Pharmaceuticals. Unfortunately, the data is behind a paywall; however it is not too expensive to access it.