The Software IP Report

Patent Invalidation under Alice Held Not to Justify Fee Award

A declaratory judgment plaintiff, having successfully invalidated patent claims under 35 U.S.C. § 101 and the Alice case, has lost a motion for its attorney fees under 285 U.S.C. § 285. Clarilogic, Inc. v. FormFree Holdings Corp., No. 3-15-cv-00041 (S. D. Cal. April 27, 2016).  The court had earlier granted a motion for summary judgment of invalidity of claims of U.S. Patent No. 8,762,243.  The plaintiff then filed a motion seeking a finding of an “exceptional case” under Section 285, arguing in part “that Defendant’s legal position supporting the validity of the challenged patent was ‘exceptionally weak.’”  On the facts here, the court declined to enter such a finding.

The facts here did not demonstrate that the patent owner’s conduct was “objectively baseless” under Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 (2014).  The patent-in-suit had issued after the Supreme Court decided Alice.  The defendant argued it was merely defending a presumptively valid patent.  Further, the defendant was correct to note “that post-Alice, the landscape of patent ineligibility under 35 U.S.C. § 101 is unsettled and rapidly evolving.”  Therefore, “the Court decline[d] to find that the substantive weakness of Defendant’s position was so objectively apparent as to render the case exceptional.”

The court also rejected the plaintiff’s argument that the defendant’s discovery conduct rendered the case exceptional.  The plaintiff had chosen to bring the case.  Further, the plaintiff could have tried to resolve the case by bringing its motion for Section 101 invalidity at the pleadings stage.  Instead, the plaintiff chose to wait until after claim construction to bring a summary judgment motion.

As a takeaway, it is hard to disagree with the result based on the court’s recitation of the facts, and the court’s indisputably correct statement that “the landscape of patent ineligibility under 35 U.S.C. § 101 is unsettled and rapidly evolving.”  Courts are generally cautious, and rightly so, in awarding fees.  This is not to say that there are no instances where, post-Alice, a patent assertion would not be objectively baseless.  I believe that there could be.  This case simply was not one of them.