SAP America Inc v. InvestPic LLC, 3-16-cv-02689 (TXND September 7, 2017, Order) (Kinkeade, USDJ)
Monday, September 11, 2017
Patentee's Threat of Litigation After PTO Warning of Likely Invalidity Justifies Award of Attorney Fees Under 35 U.S.C. § 285
Following judgment on the pleadings of lack of patentable subject matter, the court granted a declaratory judgment plaintiff's motion for attorney fees under 35 U.S.C. § 285 because defendant threatened litigation after the PTO asserted, during a reexamination appeal, that the patent claims were likely invalid under 35 U.S.C. § 101. "[T]he lone fact that a patent owner asserted patent claims in litigation that ultimately were found to be invalid under § 101 is typically insufficient for finding a case exceptional. But, this case does stand out from the typical case in which claims of a patent were invalidated by a court. That is because [defendant] was specifically warned by the USPTO, in [a Federal Circuit appellate brief in connection with a reexamination appeal], that it looked very unlikely that these claims were directed toward patentable subject matter and very likely that the claims were invalid. The USPTO did not directly address this subject matter eligibility issue in that opinion because doing so would have been outside the authority of the USPTO for that particular proceeding. . . . Instead of addressing this issue, after the USPTO created a serious cloud on the of the claims, [defendant] ignored it and continued to assert its patent against companies like [plaintiff]."