Litigation Strategy to Extract “Nuisance Settlement” Warrants Award of Attorneys’ Fees

The court granted defendant's motion for attorneys’ fees under 35 U.S.C. § 285 against an NPE plaintiff because plaintiff's suit had been a "prototypical exceptional case." "No reasonable litigant could have expected success on the merits in [plaintiff's] patent infringement lawsuit against [defendant] because the [patent-in-suit] claimed a bilateral matchmaking process requiring multiple parties . . . while [the accused] feature utilizes the preference data of only one party. . . . And the most basic pre-suit investigation would have revealed this fact. . . . [Plaintiff's] motivation in this litigation was to extract a nuisance settlement from [defendant] on the theory that [defendant] would rather pay an unjustified license fee than bear the costs of the threatened expensive litigation. [Plaintiff] never sought to enjoin [defendant] from the allegedly infringing conduct in its prayer for relief. [Plaintiff's] threats of 'full-scale litigation,' 'protracted discovery,' and a settlement demand escalator should [defendant] file responsive papers, were aimed at convincing [defendant] that a pay-off was the lesser injustice."

Lumen View Technology LLC v. Findthebest.com, Inc., 1-13-cv-03599 (NYSD May 30, 2014, Order) (Cote, J.)