The Squeaky Wheel Gets the Grease–You Won’t Get Fees if You Don’t Complain Early

Stragent, LLC v. Intel Corp.

Applying recent standards for determining whether a case is “exceptional” under Octane Fitness for purposes of awarding fees, the U.S. District Court for the Eastern District of Texas (Judge Bryson of the U.S. Court of Appeals for the Federal Circuit, sitting by designation) denied a defendant’s motion for fees based, in significant part, on the defendant’s lack of prior complaint regarding the alleged misconduct that formed the basis of the post-verdict motion.  Stragent, LLC v. Intel Corp., Case No. 6:11-cv-421 (E.D. Tex., Aug. 6, 2014) (Bryson, J., sitting by designation).

Plaintiff Stragent asserted four patents against Intel as part of its original complaint.  Only one of the four patents was ultimately tried.  The jury concluded that the asserted claims were both invalid and not infringed.  As the parties were in the midst of briefing the issue of whether the case was an “exceptional” one under § 285, the U.S. Supreme Court issued its opinion in Octane Fitness (IP Update, Vol. 17, No. 5).  With that decision as a guidepost, the district court set out to determine based on the various pronounced factors whether this case “stands out from others with respect to the substantive strength of [Stragent’s] litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.”

The court rejected Intel’s arguments criticizing the substantive strength of the case as to both infringement and invalidity.  Regarding infringement, the court found that “Stragent’s argument was certainly a weak one,” but that “Intel never sought summary judgment of non-infringement on the basis of the limitation at issue.”  The court found that this suggested that Intel did not always view Stragent’s infringement position as frivolous and that there is little injustice in forcing Intel to bear its own attorneys’ fees for defending a claim it did not challenge on summary judgment.  The court found that had the defendants successfully moved it would have avoided a trial and would have had the effect of saving both parties a substantial portion of their litigation costs.  Regarding invalidity, the court found that “Stragent’s validity argument was certainly not a winning position, but the disputes between the parties over invalidity and related claim construction questions were real and substantial,” that Stragent prevailed in the majority of disputed claim constructions and that Stragent “simply lost the jury verdict.”

The court also rejected Intel’s arguments criticizing the manner in which the case was litigated.  The court found that Stragent had not delayed in disclosing certain positions and or committed misconduct in abandoning certain other claims and positions.  The court also found no misconduct in Stragent’s alleged strategy of “fil[ing] infringement suits against Intel customers in an effort to force a settlement of this case.”  Similarly, the court found that Stragent had not engaged in bad faith discovery, evidenced by the fact that “Intel never sought discovery sanctions against Stragent or even a court ruling limiting the scope of discovery.”

Finally, the court found that “counsel for both sides were cooperative in reaching stipulations and minimizing disputes over collateral issues throughout the case.” Reasoning that “[t]his not only saved the court’s time, but surely lowered the parties’ costs as well” and that “such professionalism is to be commended and weighs against a finding that an award of attorney’s fees is warranted.”