The Software IP Report

Denial of Dispositive Motions Undermined Argument for Exceptional Case

A recent case in which a court refused to find a case exceptional under 35 U.S.C. § 285, and denied a defendant’s motion for fees, demonstrates how Octane Fitness has not greatly shifted the ground in many patent cases. In Ushijima v. Samsung Electronics Co., Ltd., No. A-12-CV-318-LY (W.D. Tex. Jul. 30, 2015), the denial of the defendant’s dispositive motions, and the concomitant findings that issues of material fact remained, undermined the defendant’s argument that a plaintiff’s refusal to abandon its suit after certain findings rendered the case exceptional.

Under Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014), an “exceptional case” under 35 U.S.C. § 285, in which “the court . . . may award reasonable attorney fees to the prevailing party,” is one “that stands out from others with respect to the substantive strength of a party’s litigating position . . . or the unreasonable manner in which the case was litigated.” Octane Fitness, LLC., 134 S. Ct. at 1756.

Samsung, the defendant, argued that the present case was exceptional because Ushijima, the plaintiff, “brought suit against Samsung EE Products even though he [Ushijima] disclaimed EE type cores . . . and no reasonable litigant could have expected to succeed under the circumstances,” and because Ushijima “maintained his claims against Samsung’s EE products ‘even after the Court’s Markman order confirmed the clear disclaimer of EE type cores.’” According to Samsung, Ushijima’s continuance of the suit constituted an “unreasonable manner in which the case was litigated,” making the case exceptional under Octane Fitness.

However, the court had denied Samsung’s Motion for Summary Judgment and Motion for Judgment as a matter of law. Therefore, despite Ushijima’s disclaimed subject matter and the claim construction ruling, the court found that a question of fact remained as to whether Samsung infringed Ushijima’s patent. Because there remained a question of fact, continuance of the litigation was not frivolous or baseless, and therefore the case was not an exceptional one warranting an award of attorney’s fees.

Further, because Samsung did not provide clear evidence showing a connection between its costs incurred and the litigation, the court reduced Samsung’s bill of costs, and Ushijima’s liability under 28 U.S.C. § 1920, accordingly. The party seeking fees has the burden of showing a nexus between the costs incurred and the necessity of its use in litigation. Fogleman v. Arabian Am. Oil Co., 920 F.2d 278, 286 (5th Cir. 1991).