Network Signatures Inc. v. State Farm Mutual Automobile Insurance Company, 8-11-cv-00982 (CACD July 30, 2012, Order) (Selna, J.).
Thursday, August 2, 2012
Pattern of Filing Infringement Suits and Offering to Settle for Less Than Defense Costs Did Not Render Case Exceptional Warranting Attorneys’ Fees
The court denied defendant's motion for attorneys' fees under 35 U.S.C. § 285 following summary judgment and rejected defendant's argument that the litigation was unjustified. "[Defendant] argues that bad faith is apparent based on the pattern of suits against many defendants followed by settlement demands that were below the cost of a typical defense. . . . The fact that the patent has been enforced against several other entities that settled does not place this in . . .[the] realm of the behavior [addressed in Eon-Net LP v. Flagstar Bancorp, 653 F.3d 1314, 1327 (Fed. Cir. 2011)]. The court there found that it was not bad faith for a patentee to 'vigorously enforce its patent rights or offer standard licensing terms.' However, in light of already finding that the claim construction position taken by the patentee was objectively baseless, the court found that by offering to settle for orders of magnitude less than litigation defense costs, bad faith could be inferred. Here the disparity between the settlement offer and fees being sought is smaller, and the Court is not presented with the same extensive alternate grounds to find the case exceptional. Perhaps, in light of an extremely objectively baseless position, these facts could support bad faith under Eon-Net. However, as detailed below, the Court finds the position was not objectively baseless."