Case 4:18-cv-07152-JST Document 127 Filed 12/02/19 Page 1 of 25
`
`Jeremy J. Taylor (SBN 249075)
`jeremy.taylor@bakerbotts.com
`BAKER BOTTS L.L.P.
`101 California Street, Suite 3600
`San Francisco, CA 94111
`Tel: (415) 291-6200
`Fax: (415) 291-6300
`Bryant C. Boren, Jr. (SBN 260602)
`bryant.c.boren@bakerbotts.com
`Elizabeth K. Boggs (SBN 280555)
`betsy.boggs@bakerbotts.com
`John F. Gaustad (SBN 279893)
`john.gaustad@bakerbotts.com
`Keith M. Jurek (SBN 310856)
`keith.jurek@bakerbotts.com
`BAKER BOTTS L.L.P.
`1001 Page Mill Road
`Building One, Suite 200
`Palo Alto, California 94304
`Phone: (650) 739-7500
`Fax: (650) 739-7699
`Jennifer C. Tempesta (admitted pro hac vice)
`BAKER BOTTS L.L.P.
`30 Rockefeller Plaza
`New York, NY 10112
`Phone: (212) 408-2500
`Fax: (212) 408-2501
`Attorneys for Defendant LYFT, INC.
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`OAKLAND DIVISION
`
`RIDEAPP, INC.
`
`Plaintiff,
`
`v.
`
`LYFT, INC.
`
`Defendant.
`
`Case No. 18-CV-07152-JST
`LYFT, INC.’S NOTICE OF MOTION AND
`MOTION FOR ATTORNEYS’ FEES
`Judge: Hon. Jon S. Tigar
`Date: January 22, 2020
`Time: 2:00 p.m.
`Courtroom: 6 – 2nd Floor
`
`LYFT’S MOTION FOR ATTORNEYS’ FEES
`
`Case No. 18-CV-07152-JST
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`BAKER BOTTS L.L.P.
`
`

`

`Case 4:18-cv-07152-JST Document 127 Filed 12/02/19 Page 2 of 25
`
`TABLE OF CONTENTS
`
`I.
`II.
`III.
`A.
`
`Page
`INTRODUCTION .............................................................................................................. 1
`STATEMENT OF ISSUES TO BE DECIDED ................................................................. 3
`FACTUAL BACKGROUND ............................................................................................ 3
`July‒November 2018: Case Filed in S.D.N.Y. and Transferred to N.D. Cal. After No
`Bona Fide Connection to the Forum Found ....................................................................... 3
`B. December 2018‒May 2019: IPR Petitions Filed and RideApp Provides Construction of
`“On-Demand Allocation” in Response .............................................................................. 3
`June 2019: RideApp Confirms the Construction of “On-Demand Allocation” and Fails
`to Identify Any Algorithms in Claim Construction Disclosures ........................................ 5
`July‒August 2019: The Patent Office Finds Asserted Claims Indefinite and RideApp
`Refuses to Dismiss Case .................................................................................................... 5
`E. August‒September 2019: RideApp Introduces Its New Construction for “On-Demand
`Allocation” ......................................................................................................................... 6
`F. October 2019: The Court Invalidates the Claims and Enters Final Judgment ................... 7
`IV.
`ARGUMENT ..................................................................................................................... 7
`A. This Is an Exceptional Case Under 35 U.S.C. § 285 ......................................................... 7
`1.
`Legal Standards ............................................................................................................. 7
`2.
`RideApp Knowingly Pursued a Frivolous Litigation Position After the Patent Office
`Decisions ........................................................................................................................ 8
`RideApp Litigated This Case in an Unreasonable Manner ........................................... 11
`3.
`B. Lyft’s Requested Attorneys’ Fees Are Reasonable ............................................................ 17
`1.
`Legal Standards ............................................................................................................. 17
`2.
`The Hourly Rate Paid by Lyft to Its Attorneys Was Reasonable .................................. 18
`3.
`The Number of Hours Billed to Litigate This Case Was Reasonable ........................... 19
`4.
`The Attorneys’ Fees which Lyft Seeks are Reasonable ................................................ 19
`CONCLUSION .................................................................................................................. 20
`
`C.
`
`D.
`
`V.
`
`LYFT’S MOTION FOR ATTORNEYS’ FEES
`
`i
`
`Case No. 18-CV-07152-JST
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`BAKER BOTTS L.L.P.
`
`

`

`Case 4:18-cv-07152-JST Document 127 Filed 12/02/19 Page 3 of 25
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`TABLE OF AUTHORITIES
`
`CASES
`
`Page(s)
`
`3Form, Inc. v. Lumicor, Inc.,
`No. 2:12-CV-293, 2018 WL 4688348 (D. Utah Sept. 28, 2018) ...............................................11
`
`Automated Bus. Cos. v. NEC Am., Inc.,
`202 F.3d 1353 (Fed. Cir. 2000) ..................................................................................................17
`
`Cent. Soya Co., Inc. v. Geo. A. Hormel & Co.,
`723 F.2d 1573 (Fed. Cir. 1983) ............................................................................................18, 20
`
`Epcon Gas Sys., Inc. v. Bauer Compressors, Inc.,
`279 F.3d 1022 (Fed. Cir. 2002) ....................................................................................................8
`
`Gilead Scis., Inc. v. Merck & Co, Inc.,
`No. 13-cv-04057-BLF, 2016 WL 4242216 (N.D. Cal. Aug. 11, 2016) .......................................8
`
`Highmark Inc., v. Allcare Health Mgmt. Sys., Inc.,
`572 U.S. 559 (2014) .....................................................................................................................8
`
`Icon Health & Fitness, Inc. v. Octane Fitness, LLC,
`112 F. Supp. 3d 888 (D. Minn. 2015) (Octane Fitness II) ...................................................12–13
`
`Inventor Holdings, LLC v. Bed Bath & Beyond, Inc.,
`876 F.3d 1372 (Fed. Cir. 2017) ..................................................................................................11
`
`Kilopass Tech., Inc. v. Sidense Corp.,
`738 F.3d 1302 (Fed. Cir. 2013) ....................................................................................................8
`
`Kilopass Tech., Inc. v. Sidense Corp.,
`No. C 10–02066 SI, 2014 WL 3956703 (N.D. Cal. Aug. 12, 2014) ....................................10–11
`
`Kilopass Tech., Inc. v. Sidense Corp.,
`82 F. Supp. 3d 1154 (N.D. Cal. 2015) .......................................................................................17
`
`Large Audience Display Sys., LLC v. Tennman Prods., LLC,
`745 F. App’x 153 (Fed. Cir. 2018) .............................................................................................17
`
`Linex Techs., Inc. v. Hewlett-Packard Co.,
`No. C 13-159 CW, 2014 WL 4616847 (N.D. Cal. Sept. 15, 2014) ...........................................11
`
`LookSmart Grp., Inc. v. Microsoft Corp.,
`386 F. Supp. 3d 1222 (N.D. Cal. June 28, 2019) .................................................................16, 17
`
`Lumen View Tech. LLC v. Findthebest.com, Inc.,
`811 F.3d 479 (Fed. Cir. 2016) ....................................................................................................17
`
`Mathis v. Hydro Air Indus. Inc.,
`No. CV 80-4481, 1986 WL 84360 (C.D. Cal. Feb. 20, 1986) ...................................................18
`
`LYFT’S MOTION FOR ATTORNEYS’ FEES
`
` ii
`
`Case No. 18-CV-07152-JST
`
`

`

`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Case 4:18-cv-07152-JST Document 127 Filed 12/02/19 Page 4 of 25
`
`Mathis v. Spears,
`857 F.2d 749 (Fed. Cir. 1988) ........................................................................................17–18, 20
`
`Motivate Int’l, Inc. v. Inlow,
`No. 1:15-09948 (N.D. Ill. 2015) .................................................................................................12
`
`Octane Fitness, LLC v. ICON Health & Fitness, Inc.,
`572 U.S. 545 (2014) ...........................................................................................................7–8, 10
`
`S.C. Johnson & Son, Inc. v. Carter-Wallace, Inc.,
`781 F.2d 198 (Fed. Cir. 1986) ......................................................................................................8
`
`Segan LLC v. Zynga Inc,
`131 F. Supp. 3d 956 (N.D. Cal. 2015) .......................................................................................11
`
`Straight Path IP Grp., Inc. v. Cisco Sys., Inc.,
`No. C 16-03463 WHA, 2019 WL 6219220 (N.D. Cal. Nov. 20, 2019) ..............................10, 15
`
`Takeda Chem. Indus., Ltd., v. Mylan Labs., Inc.,
`549 F.3d 1381 (Fed. Cir. 2008) ..................................................................................................18
`
`Taurus IP, LLC v. DaimlerChrysler Corp.,
`726 F.3d 1306 (Fed. Cir. 2013) ..................................................................................................11
`
`View Eng'g, Inc. v. Robotic Vision Sys, Inc.,
`208 F.3d 981, 987–88 (Fed. Cir. 2000) ......................................................................................18
`
`STATUTES
`
`35 U.S.C. § 112 ..................................................................................................................................1
`
`35 U.S.C. § 285 ....................................................................................................................1, 7, 8, 17
`
`OTHER AUTHORITIES
`
`Fed. R. of Civ. Proc. 15 .............................................................................................................. 13-14
`
`Patent L. R. 3-6 .......................................................................................................................... 13-14
`
`LYFT’S MOTION FOR ATTORNEYS’ FEES
`
` iii
`
`Case No. 18-CV-07152-JST
`
`

`

`Case 4:18-cv-07152-JST Document 127 Filed 12/02/19 Page 5 of 25
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`NOTICE OF MOTION AND MOTION
`TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
`PLEASE TAKE NOTICE that on January 22, 2020 or as soon thereafter as the matter may
`be heard, in Courtroom 6 – 2nd Floor, 1301 Clay Street, Oakland, CA 94612, Defendant Lyft, Inc.
`(“Lyft”) moves the Court for attorneys’ fees under 35 U.S.C. § 285. This motion is based on this
`Notice of Motion, the attached memorandum of points and authorities in support thereof, the
`pleadings and documents on file in this case, and such other evidence and argument as may be
`presented at the hearing on this motion.
`STATEMENT OF RELIEF REQUESTED
`Lyft asks the Court to find this case “exceptional” under 35 U.S.C. § 285 and award Lyft a
`portion of the reasonable attorneys’ fees it has incurred since July 17, 2019—the day the Patent
`Office first found the asserted claims (claims 2, 3, and 6) of U.S. Patent No. 6,697,730 (the “’730
`Patent”) indefinite under 35 U.S.C. § 112, ¶ 2. Lyft specifically requests the Court award Lyft
`$569,254.34, in addition to any further reasonable attorneys’ fees incurred by Lyft in pursuing this
`motion.1
`
`I.
`
`MEMORANDUM OF POINTS AND AUTHORITIES
`INTRODUCTION
`This case is exceptional. From the beginning of the case, Lyft asserted that RideApp Inc.’s
`(“RideApp”) Patent was invalid as indefinite under 35 U.S.C. § 112. Lyft explained this in its
`Answer, in its Invalidity Contentions, in its Petition for Inter Partes Review (“IPR”) filed with the
`Patent Office, and finally in its claim construction disclosures and briefing which resulted in this
`Court confirming the invalidity of the ’730 Patent. Although RideApp’s pre-suit diligence should
`have revealed the invalidity of the ’730 Patent, when the Patent Office confirmed the invalidity of
`the ’730 Patent, not once, but twice, RideApp was fully aware its patent was invalid. Despite this,
`RideApp refused to dismiss the case and offered no explanation of how RideApp could continue to
`plausibly assert the ’730 Patent in light of the Patent Office’s invalidity findings.
`
`1 Lyft reserves the right to also seek fees in defending against any appeal of this Court’s Judgment
`by RideApp or any fees incurred in collecting on any judgment in this case.
`LYFT’S MOTION FOR ATTORNEYS’ FEES
`Case No. 18-CV-07152-JST
`
`1
`
`BAKER BOTTS L.L.P.
`
`

`

`Case 4:18-cv-07152-JST Document 127 Filed 12/02/19 Page 6 of 25
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Instead of acknowledging the invalidity of the ’730 Patent after the Patent Office twice
`confirmed its invalidity—as Lyft argued from the beginning of the case—RideApp adopted a
`frivolous interpretation of the ’730 Patent for purposes of claim construction that directly
`contradicted even RideApp’s own previous interpretation. As soon as the Patent Office dismissed
`the IPR challenges, RideApp did an about face, abandoning its old interpretation of the ’730 Patent
`and offering a new, contradictory one, better suited for the upcoming claim construction process.
`While this Court ultimately rejected RideApp’s new interpretation of the ’730 Patent and
`found the asserted claims indefinite for the same, and additional, reasons found by the Patent Office,
`RideApp’s tactics unnecessarily prolonged this case, wasting judicial resources and forcing Lyft to
`incur needless attorneys’ fees defending itself.
`In addition to RideApp’s shifting claim construction positions, RideApp employed
`unreasonable tactics throughout this case that unnecessarily increased the cost for Lyft to defend
`itself. RideApp’s improper tactics started the day RideApp filed this case in the Southern District
`of New York, a venue convenient for neither party to which RideApp unsuccessfully tried to
`manufacture a connection by inappropriately adding (and then quickly dismissing) a party.
`RideApp’s unreasonable tactics continued in the Northern District of California when it
`unsuccessfully tried to skirt the requirements of the Patent Local Rules by seeking to improperly
`add assertions to the case under the inapplicable amended pleading standard rather than properly
`seeking leave to amend its infringement contentions.
`As a result of RideApp’s unreasonable litigation positions and tactics, Lyft spent
`considerable resources defending itself in this case, but seeks only a portion—$569,254.34—in
`compensation for attorneys’ fees incurred since July 17, 2019, when the Patent Office first found
`the asserted claims of the ’730 Patent indefinite. This amount covers only 882 of the nearly 3,000
`total hours that Lyft’s outside counsel spent defending this case and only includes fees incurred by
`Lyft’s four outside attorneys who spent more than 50 hours on the matter after the Patent Office first
`found the asserted claims indefinite. Lyft never would have incurred these attorneys’ fees if
`RideApp had dismissed this case after the Patent Office confirmed the invalidity of the ’730 Patent,
`when RideApp unmistakably knew its case was untenable.
`
`LYFT’S MOTION FOR ATTORNEYS’ FEES
`
` 2
`
`Case No. 18-CV-07152-JST
`
`BAKER BOTTS L.L.P.
`
`

`

`Case 4:18-cv-07152-JST Document 127 Filed 12/02/19 Page 7 of 25
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`II.
`
`III.
`
`STATEMENT OF ISSUES TO BE DECIDED
`1.
`Whether this case is exceptional in view of RideApp’s frivolous litigating position
`and the unreasonable manner in which it litigated this case.
`Whether Lyft is entitled to attorneys’ fees in view of the exceptional nature of this
`case.
`Whether Lyft’s requested attorneys’ fees are reasonable.
`3.
`FACTUAL BACKGROUND
`
`2.
`
`A.
`
`July‒November 2018: Case Filed in S.D.N.Y. and Transferred to N.D. Cal.
`After No Bona Fide Connection to the Forum Found
`On July 23, 2019, RideApp, a Delaware corporation located in Georgia, filed this case in the
`Southern District of New York against Lyft, a San Francisco-based company with the bulk of its
`engineering team also in the San Francisco Bay Area. ECF No. 1. At the initial case management
`conference, Lyft informed RideApp and the New York court that it intended to file a motion to
`transfer the case to the Northern District of California for convenience of the witnesses and parties.
`Ex. A2 at 4; ECF No. 21. On the day Lyft’s motion to transfer was due, RideApp filed an amended
`complaint, naming Motivate International, Inc. (“Motivate”), a New York-based company that Lyft
`was in the process of acquiring, as a second defendant. See ECF No. 29 ¶ 37; ECF No. 43 at 2–3.
`RideApp’s new complaint prominently featured New York and Motivate’s ties to New York. Ex. A
`at 4:9‒14. Less than a week later, RideApp dismissed Motivate from the case without explanation,
`but continued to attempt to leverage its allegations against Motivate to keep the case in New York.
`Id. at 4:15‒5:17. Despite this, the New York court granted Lyft’s motion to transfer the case to the
`Northern District of California, finding “no factual basis for Lyft to be held liable for Motivate’s
`acts.” Id. at 5:8–9. The New York court found none of the convenience factors favored maintaining
`the case in New York and concluded the “allegations in the complaint do not show a bona fide
`connection to the forum.” Id. at 5:18‒19; id. at 5:19–9:25.
`
`B.
`
`December 2018‒May 2019: IPR Petitions Filed and RideApp Provides
`Construction of “On-Demand Allocation” in Response
`On December 12, 2018, a third party—Unified Patents Inc. (“Unified”)—filed an IPR
`
`2 All exhibits are exhibits to the Declaration of Keith Jurek, filed herewith.
`LYFT’S MOTION FOR ATTORNEYS’ FEES
`Case No. 18-CV-07152-JST
`
` 3
`
`BAKER BOTTS L.L.P.
`
`

`

`Case 4:18-cv-07152-JST Document 127 Filed 12/02/19 Page 8 of 25
`
`Petition with the Patent Office, arguing that the asserted claims of the ’730 Patent were both
`anticipated and rendered obvious by a number of prior art references. See Ex. B. Lyft filed its own
`IPR Petition on February 12, 2019, also arguing that a number of prior art references both anticipated
`and rendered obvious the asserted claims. See Ex. C. Both Unified and Lyft interpreted the plain
`meaning of “on-demand allocation” to be “assigning” or “matching” a passenger to a vehicle. See,
`e.g., Exs. B at 5 (“The central assigning system allocates (assigns) a passenger . . . to one or more
`vehicles . . . .”); C at 25 (“Behnke thus discloses a ‘wireless means of’ matching riders and drivers
`responsive to the rider’s ride request in the same fashion as the ’730 Patent.”). Both Unified and
`Lyft also recognized the asserted claims contained several means-plus-function terms. See, e.g.,
`Exs. B at 9, 12, and 14; C at 17‒18. Lyft argued that (1) these means-plus-function limitations were
`implemented by a general-purpose computer running an algorithm for performing the claimed
`functions and (2) “[t]he ’730 Patent describes no innovative algorithms for assigning a passenger to
`a driver, no novel communication devices, and no inventive method for tracking vehicle position.”
`Ex. C at 7, 18‒20.
`On May 9, 2019, RideApp filed its Preliminary Response to Unified’s IPR Petition, and
`confirmed that “on-demand allocation” included “assignment,” among other things:
`
`“Assignment” is a part of “on-demand allocation,” but “on-demand
`allocation” in the Patent is much more. During “allocation,” the
`central assigning system processes, integrates and transmits data
`including:
`(1) communications with passengers to schedule their trips and give
`them precise information on trip times and sites; (2) vehicle (and in
`some instances passenger) location communications using GPS
`technology; (3) communications to allocate routes, schedules and
`passengers; and (4) communications between passengers and vehicles
`to monitor system usage. These communications pertain to both ride-
`sharing and vehicle rental. Under normal operations, digital
`computers monitor and control
`the system without manual
`intervention so as to both minimize costs and make the complex data
`processing possible in a timely manner.”
`
`Ex. D at 16‒18 (emphasis in original). Using this definition, RideApp argued that the “prior art
`systems do not provide on-demand allocation.” Id. at 18. RideApp also argued that Unified’s
`Petition should be dismissed because Unified failed to identify an algorithm for any of the means-
`
`LYFT’S MOTION FOR ATTORNEYS’ FEES
`
` 4
`
`Case No. 18-CV-07152-JST
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`BAKER BOTTS L.L.P.
`
`

`

`Case 4:18-cv-07152-JST Document 127 Filed 12/02/19 Page 9 of 25
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`plus-function claim elements, including “on-demand allocation.” Id. at 13‒15.
`Nearly two weeks later, on May 22, 2019, RideApp filed its Preliminary Response to Lyft’s
`IPR Petition echoing the arguments made in its response to Unified’s IPR Petition. Ex. E. RideApp
`again argued that “on-demand allocation” includes assignment. Id. at 18 (“On-demand allocation
`includes ‘assignment,’ but on-demand allocation in the ’730 Patent is more robust.”) (emphasis in
`original); see also id. at 11‒14, 18‒20. RideApp also argued that Lyft’s IPR Petition should be
`denied because (1) the prior art lacked “on-demand allocation” under this definition and (2) Lyft did
`not identify algorithms for the claimed means-plus-function elements. Id.
`
`C.
`
`June 2019: RideApp Confirms the Construction of “On-Demand Allocation”
`and Fails to Identify Any Algorithms in Claim Construction Disclosures
`On June 24, 2019, the parties exchanged proposed constructions. Once again, RideApp
`advanced its position that “on-demand allocation” included the assignment of a passenger to a
`specific vehicle:
`
`This term means “the processing, integration and transmission of data
`to assign a passenger to a specific vehicle and vice-versa based on
`current passenger transportation vehicle usage information (including
`passenger parameters) and current vehicle data.”
`
`Ex. F at 3 (emphasis added).
`For the alleged algorithms corresponding to the means-plus-function elements, RideApp
`cited large swaths of the specification, including 1079 lines from the ’730 Patent (including the
`entirety of Table 1) along with seven of the patent’s nine figures. See id. at 4‒5.
`
`D.
`
`July‒August 2019: The Patent Office Finds Asserted Claims Indefinite and
`RideApp Refuses to Dismiss Case
`On July 17, 2019, the Patent Office issued its decision denying Unified’s IPR Petition. ECF
`No. 105-1. The Patent Office analyzed the ’730 Patent and found it failed to disclose a requisite
`algorithm for the “on-demand allocation” function. Id. at 5‒13. In reaching its decision, the Patent
`Office relied on RideApp’s definition of “on demand allocation” that included the assignment of a
`passenger to a vehicle. Id. The Patent Office also found the ’730 Patent failed to disclose a requisite
`algorithm for the claimed “detecting the proximity of the passenger” function. Id. at 13‒14.
`Because the specification failed to disclose algorithms for the claimed functions, the Patent Office
`
`LYFT’S MOTION FOR ATTORNEYS’ FEES
`
` 5
`
`Case No. 18-CV-07152-JST
`
`BAKER BOTTS L.L.P.
`
`

`

`Case 4:18-cv-07152-JST Document 127 Filed 12/02/19 Page 10 of 25
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`was “unable to apply the claim language to the prior art” and rejected Unified’s IPR Petition,
`recognizing that this deficiency renders the claims indefinite. See id. at 7‒8, 14.
`The day after the Patent Office dismissed Unified’s IPR Petition, RideApp changed its
`position, arguing the Court should afford “on-demand allocation” its plain meaning, which RideApp
`later alleged excluded assigning a passenger to a vehicle. See Exs. G & H at 6. In the Joint Claim
`Construction and Prehearing Statement, filed the next day, RideApp dropped “on-demand
`allocation” entirely from its list of terms to construe. See Exs. I & J; ECF No. 93. RideApp again
`broadly cited to large portions of the specification including “descriptive prose from the intrinsic
`evidence” in the Joint Claim Construction Statement without identifying specific algorithms. See
`ECF No. 93, App’x A at 1‒5.
`In view of the Patent Office finding the asserted claims indefinite, Lyft sent RideApp a letter
`on July 22, 2019, requesting that RideApp promptly dismiss the case. Ex. K at 1. RideApp did not
`respond to this request.
`On August 12, 2019, the Patent Office issued a decision denying Lyft’s IPR Petition for
`reasons similar to those discussed in the Unified IPR decision, finding that because the specification
`failed to disclose the requisite algorithms for the claimed functions, it was “unable to apply the claim
`language to the prior art” and that this deficiency renders the claims indefinite. ECF No. 105-2 at
`8, 15.
`
`Following the Patent Office’s second decision finding the asserted claims of the ’730 Patent
`indefinite, Lyft again requested RideApp dismiss the case, explaining that the Patent Office’s
`finding made RideApp’s litigation position meritless. See Ex. L. In response, RideApp confirmed
`it “d[id] not intend to dismiss the action at this juncture,” without an explanation of how RideApp
`believed the case remained meritorious in light of the multiple Patent Office decisions finding the
`asserted claims indefinite. Ex. M.
`
`E.
`
`August‒September 2019: RideApp Introduces Its New Construction for “On-
`Demand Allocation”
`On September 6, 2019, in its opening claim construction brief, RideApp introduced a brand-
`new construction for the term “on-demand allocation” that excluded assigning a passenger to a
`
`LYFT’S MOTION FOR ATTORNEYS’ FEES
`
` 6
`
`Case No. 18-CV-07152-JST
`
`BAKER BOTTS L.L.P.
`
`

`

`Case 4:18-cv-07152-JST Document 127 Filed 12/02/19 Page 11 of 25
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`vehicle. See ECF No. 101 at 8. Contrary to its previous position, RideApp now argued that
`“‘allocation’ and ‘assignment’ are two different things.” ECF No. 107 at 4. RideApp confirmed its
`new construction was motivated by the Patent Office decisions finding the ’730 Patent invalid under
`RideApp’s previous definition of “on demand allocation.” See ECF No. 101 at 8, n.6.
`
`October 2019: The Court Invalidates the Claims and Enters Final Judgment
`F.
`On October 16, 2019, the Court rejected RideApp’s new definition of “on-demand
`allocation” and found the asserted claims of the ’730 Patent indefinite, confirming Lyft’s position
`from the beginning of this case and the Patent Office’s two decisions. See ECF No. 117. According
`to this Court, “[t]he interpretation of ‘allocation’ as including assignment is persuasive,” and “[t]he
`patent discloses no algorithm for assigning passengers to vehicles.” Id. at 13:24–28, 16:2–3. The
`Court specifically recognized that RideApp’s eleventh-hour construction for the term “on-demand
`allocation” was not “conducive to the orderly progress of th[e] case” and that the Court disapproved
`of it. Id. at 13:3–7.
`In addition to the “on-demand allocation” term, the Court found four other claim terms
`indefinite rendering the asserted claims of ’730 Patent invalid for multiple independent reasons.
`With respect to the tracking function, the first limitation in each asserted claim of the ’730 Patent,
`the Court concluded that “the ’730 Patent contains no algorithm whatsoever – simple or otherwise
`– describing how the invention performs the tracking function.” Id. at 11.
`On October 31, 2019, the Court entered final judgment in the case, finding all asserted claims
`of the ’730 Patent invalid. See ECF No. 122.
`IV.
`ARGUMENT
`
`A.
`
`This Is an Exceptional Case Under 35 U.S.C. § 285
`Legal Standards
`1.
`The Patent Act provides that the “court in exceptional cases may award reasonable attorney
`fees to the prevailing party.” 35 U.S.C. § 285. An exceptional case “is simply one that stands out
`from others with respect to the substantive strength of a party’s litigating position (considering both
`the governing law and the facts of the case) or the unreasonable manner in which the case was
`litigated.” Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 554 (2014). “District
`
`LYFT’S MOTION FOR ATTORNEYS’ FEES
`
` 7
`
`Case No. 18-CV-07152-JST
`
`BAKER BOTTS L.L.P.
`
`

`

`Case 4:18-cv-07152-JST Document 127 Filed 12/02/19 Page 12 of 25
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`courts may determine whether a case is ‘exceptional’ in the case-by-case exercise of their discretion,
`considering the totality of the circumstances.” Id. Relevant considerations include “frivolousness,
`motivation, objective unreasonableness (both in the factual and legal components of the case) and
`the need in particular circumstances to advance considerations of compensation and deterrence.”
`Id., n.6. The exceptional nature of a case and entitlement to fees under Section 285 need only be
`shown by a preponderance of the evidence. Id. at 557–558.
`All aspects of a Section 285 determination are left to the discretion of the district court.
`Highmark Inc., v. Allcare Health Mgmt. Sys., Inc., 572 U.S. 559, 561 (2014). “The trial judge is in
`the best position to weigh considerations such as the closeness of the case, the tactics of counsel,
`the conduct of the parties, and any other factors that may contribute to a fair allocation of the burdens
`of litigation as between winner and loser.” S.C. Johnson & Son, Inc. v. Carter-Wallace, Inc., 781
`F.2d 198, 201 (Fed. Cir. 1986)). A prevailing party may demonstrate an exceptional case by
`showing: “inequitable conduct before the PTO; litigation misconduct; vexatious, unjustified, and
`otherwise bad faith litigation; a frivolous suit or willful infringement.” Epcon Gas Sys., Inc. v.
`Bauer Compressors, Inc., 279 F.3d 1022, 1034 (Fed. Cir. 2002). Ultimately, “the aim of § 285 is
`to compensate a defendant for attorneys’ fees it should not have been forced to incur.” Gilead Scis.,
`Inc. v. Merck & Co, Inc., No. 13-CV-04057-BLF, 2016 WL 4242216, at *2 (N.D. Cal. Aug. 11,
`2016) (quoting Kilopass Tech., Inc. v. Sidense Corp., 738 F.3d 1302, 1313 (Fed. Cir. 2013)).
`
`2.
`
`RideApp Knowingly Pursued a Frivolous Litigation Position After the
`Patent Office Decisions
`RideApp’s decision to continue pursuing this case against Lyft after July 17, 2019, when the
`Patent Office found the asserted claims of RideApp’s Patent indefinite, makes this case exceptional.
`RideApp’s pre-suit diligence should have revealed the invalidity of the ’730 Patent, but after the
`Patent Office twice confirmed the invalidity of the ’730 Patent, RideApp was fully aware that its
`patent was invalid and should have dismissed the case. RideApp’s attempt to abandon its
`interpretation of the ’730 Patent following the Patent Office decisions finding the asserted claims
`indefinite further confirms the frivolousness of RideApp’s litigation position.
`When the Patent Office issued its decision on July 17, 2019, finding the asserted claims of
`
`LYFT’S MOTION FOR ATTORNEYS’ FEES
`
` 8
`
`Case No. 18-CV-07152-JST
`
`BAKER BOTTS L.L.P.
`
`

`

`Case 4:18-cv-07152-JST Document 127 Filed 12/02/19 Page 13 of 25
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`the ’730 Patent indefinite, RideApp should have dismissed this case. The Patent Office confirmed
`what Lyft had argued from the beginning of the case—RideApp’s litigation position lacked merit
`because the asserted claims were indefinite. On August 12, 2019, the Patent Office again confirmed
`the indefiniteness of the asserted claims in dismissing Lyft’s IPR Petition. Despite this, RideApp
`refused to dismiss the lawsuit.
`Instead, after beating the Patent Office challenges, RideApp pivoted. No longer needing to
`maintain the position taken to avoid the IPR petitions, RideApp adopted a brand-new interpretation
`of the ’730 Patent that directly contradicted RideApp’s previous position consistently taken
`throughout this case.
`From the beginning of the case, RideApp argued the term “on-demand allocation” included
`(amongst other things) assigning a passenger to a vehicle. In its opposition to Lyft’s § 101 motion,
`for example, RideApp stated that “‘[a]llocation’ is a function of the wireless communic