Judge Sleet Partially Grants Motion for Fees and Costs under Section 285

June 8, 2016

Publication| Intellectual Property

In Inventor Holdings LLC v. Bed Bath & Beyond Inc., C.A. No. 14-448-GMS (D. Del. May 31, 2016), Judge Sleet granted the defendant’s motion for attorneys’ fees and costs but denied its motion for expert fees and costs. Following dismissal of the plaintiff’s complaint under Alice, affirmed by the Federal Circuit on appeal, the defendant moved for attorneys’ and experts’ fees and costs. Under 35 U.S.C. § 285 and Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014), Judge Sleet found that the case was exceptional under the totality of the circumstances. Specifically, Judge Sleet found that, although the plaintiff’s assertion of validity of the patent “had some merit at the outset of litigation,” particularly since the patent survived motions to dismiss in other cases, the patent “was dubious even before the Alice decision,” and “by the time of the Alice decision, [the plaintiff] was on notice that its claims, much like the claims of Bilski and Alice, covered an abstract idea and that the introduction of a computer into these claims did not alter the analysis.” Therefore, the initial dubious nature of the claims and the fact that, after Alice, the claims “were objectively without merit” rendered the case exceptional. Finding the case exceptional, Judge Sleet utilized his discretion to award only the attorneys’ fees and costs incurred since the Alice decision was issued. Judge Sleet, however, declined to award experts’ fees and costs, finding that such are better addressed separately under the Court’s inherent power to sanction and that his award of solely attorneys’ fees and costs achieves “the goals envisioned by section 285.”

Analysis: In a rare shifting of fees, Judge Sleet suggested the need for counsel to constantly evaluate their cases in light of higher court decisions. Further, this case shows the wide discretion courts have to fashion an award under Section 285 that is appropriate in light of the action.

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