Serial Litigation Strategy Resulting in Licensing Fees Below Litigation Costs Does Not Render Case Exceptional

Following a jury trial, the court denied defendants' motion for attorneys’ fees under 35 U.S.C. § 285 and rejected the argument that plaintiffs engaged in vexatious litigation conduct. "Defendants assert that [plaintiff's] business model is based on serial litigation intended to extract licensing fees below the cost of defending litigation. . . . Defendants may not agree with [plaintiff's] alleged licensing framework, but they fail to show that it has been used vexatiously against either [of them]. During license negotiations, sound business practice counsels considering litigation costs during negotiations, whether explicitly or implicitly. . . . Although Defendants provided some troubling evidence that [plaintiff] had a policy of using repeated and vexatious litigation to secure patent licenses, Defendants have failed to provide evidence that [plaintiff] acted in subjective bad faith by actually implementing that policy against [them]."

WI-LAN Inc. v. Alcatel-Lucent USA Inc., et al., 6-10-cv-00521 (TXED January 28, 2014, Order) (Davis, J.)