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`No. _______
`
`In The
`Supreme Court of the United States
`-------------------------- ♦ ---------------------------
`
`BLACKBIRD TECH LLC,
`dba Blackbird Technologies,
`Petitioner,
`
`
`
`
`v.
`
`
`
`HEALTH IN MOTION LLC,
`dba Inspire Fitness,
`LEISURE FITNESS EQUIPMENT LLC,
`Respondents.
`
`-------------------------- ♦ --------------------------
`On Petition for Writ of Certiorari to the United
`States Court of Appeals for the Federal Circuit
`
`-------------------------- ♦ --------------------------
`
`PETITION FOR A WRIT OF CERTIORARI
`
`-------------------------- ♦ --------------------------
`
`WENDY H. VERLANDER
` THOMAS M. DUNLAP
`JEFFREY D. AHDOOT
` Counsel of Record
`BLACKBIRD TECH LLC
`DUNLAP BENNETT &
`One Boston Place, Suite 2600
` LUDWIG PLLC
`Boston, Massachusetts 02108
`211 Church Street, SE
`Leesburg, Virginia 20175 (617) 307-7100
`(703) 777-7319
`tdunlap@dbllawyers.com
` Counsel for Petitioner
`Dated: March 16, 2020
`
`THE LEX GROUPDC (cid:105)(cid:105) 1050 Connecticut Avenue, N.W. (cid:105) Suite 500, #5190 (cid:105) Washington, D.C. 20036
`(202) 955-0001 (cid:105) (800) 856-4419 (cid:105) www.thelexgroup.com
`
`
`
`i
`
`QUESTION PRESENTED FOR REVIEW
`35 U.S.C. § 285 provides that a court “in
`exceptional cases may award reasonable attorney fees
`to the prevailing party.” In Octane Fitness, LLC v.
`ICON Health & Fitness, Inc., 572 U.S. 545 (2014), this
`Court held that an exceptional case is “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.” This Court further held that “district courts
`may determine whether a case is ‘exceptional’ in the
`case-by-case exercise of their discretion, considering
`the totality of the circumstances.” Id. Applying
`Octane Fitness, in this case both the district court and
`Federal Circuit found this was an exceptional case
`based in part on the number of previous unrelated
`litigations filed by Petitioner without any analysis of
`those previous cases.
`
`The question presented is:
`Can a court consider factors unrelated to the
`instant case in determining whether a particular case
`is exceptional, i.e., whether those outside factors are
`relevant to the strength of a party’s litigating position
`in that particular case, or the manner in which that
`particular case was litigated?
`
`
`
`
`
`
`
`
`ii
`
`PARTIES TO THE PROCEEDINGS AND
`RULE 29.6 STATEMENT
`The parties to the proceedings include those
`
`listed on the cover.
`dba Blackbird
`LLC
`
`Blackbird
`Tech
`Technologies is a limited liability company. It does not
`have a parent corporation and no publicly held
`corporation owns 10% or more of its stock.
`The following is a list of all proceedings in other
`courts that are directly related to the case:
`(cid:120) Blackbird Tech LLC d/b/a Blackbird
`Technologies v. Health In Motion LLC
`et al., No. 2:17-cv-03488-R-GJS, U.S.
`District Court for the Central District of
`California. Judgment entered Sept. 10,
`2018.
`(cid:120) Blackbird Tech LLC d/b/a Blackbird
`Technologies v. Health In Motion LLC et
`al., No. 2018-2393, U.S. Court of Appeals
`for the Federal Circuit. Judgement
`entered December 16, 2019.
`
`
`
`
`
`
`
`
`
`
`iii
`
`TABLE OF CONTENTS
`
`Page
`QUESTION PRESENTED FOR REVIEW ................. i
`PARTIES TO THE PROCEEDINGS AND
`RULE 29.6 STATEMENT .......................................... ii
`TABLE OF CONTENTS............................................ iii
`TABLE OF AUTHORITIES ....................................... v
`PETITION FOR A WRIT OF CERTIORARI ............. 1
`OPINIONS AND ORDERS BELOW ......................... 1
`STATEMENT OF JURISDICTION ........................... 1
`STATUTORY PROVISION INVOLVED ................... 1
`INTRODUCTION ....................................................... 1
`STATEMENT.............................................................. 3
`A.
`Legal Background ............................ 3
`B.
`Proceedings Below ........................... 5
`REASONS FOR GRANTING THE PETITION ......... 8
`I.
`THE FEDERAL CIRCUIT’S FINDINGS ARE
`UNSUPPORTED BY THIS COURT’S DECISION
`IN OCTANE FITNESS, INCONSISTENT WITH
`THE OBJECTIVES OF THE PATENT ACT,
`AND CONFLICTS WITH
`ITS OWN
`PRECEDENT .................................................. 8
`A.
`The Federal Circuit’s Findings
`Are Unsupported by This Court’s
`Decision in Octane Fitness ............... 8
`
`
`
`iv
`
`B.
`
`C.
`
`The Federal Circuit’s Findings
`Contradict the Objectives of the
`Patent Act ...................................... 12
`The Federal Circuit’s Findings
`Conflict With Its Own Precedent .. 15
`IF NOT REVERSED, THE FEDERAL
`CIRCUIT’S FINDINGS WILL HAVE SERIOUS
`REPERCUSSIONS FOR PLAINTIFFS .............. 20
`III. THIS CASE IS A GOOD VEHICLE TO
`REVIEW THE QUESTION PRESENTED .......... 22
`CONCLUSION ......................................................... 23
`APPENDIX:
`Precedential Opinion and Judgment of
`The United States Court of Appeals
`For the Federal Circuit
`
`entered December 16, 2019 ...................... 1a
`Order of
`The United States District Court
`For the Central District of California
`Re: Granting Defendants’ Motion for
`Attorneys’ Fees and Expenses
`
`entered September 10, 2018 ................... 19a
`
`
`II.
`
`
`
`
`
`
`
`v
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`CASES
`Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc.,
`393 F.3d 1378 (Fed. Cir. 2005) .................... 3, 4
`Eon-Net LP v. Flagstar Bancorp,
`653 F.3d 1314 (Fed. Cir. 2011) ...................... 17
`Evans v. Jeff D.,
`475 U.S. 717 (1986) ........................................ 16
`Flight Attendants v. Zipes,
`491 U.S. 754 (1989) ........................................ 12
`Fogerty v. Fantasy, Inc.,
`510 U.S. 517 (1994) ................................ passim
`Hardt v. Reliance Standard Life Ins. Co.,
`560 U.S. 242 (2010) .......................................... 3
`Kewanee Oil Co. v. Bicron Corp.,
`416 U.S. 470 (1974) ........................................ 13
`Kirtsaeng v. John Wiley & Sons, Inc.,
`136 S. Ct. 1979 (2016) .................. 10, 11, 12, 22
`Lieb v. Topstone Indus., Inc.,
`788 F.2d 151 (3d Cir. 1986) ............................. 9
`Martin v. Franklin Capital Corp.,
`546 U.S. 132 (2005) ........................................ 11
`Marx v. Gen. Revenue Corp.,
`568 U.S. 371 (2013) .......................................... 3
`
`
`
`vi
`
`Monolithic Power Systems, Inc. v.
`O2 Micro International, Ltd.,
`
`726 F.3d 1359 (Fed. Cir. 2013) ...................... 17
`Octane Fitness, LLC v.
`ICON Health & Fitness, Inc.,
`
`572 U.S. 545 (2014) ................................ passim
`Ruckelshaus v. Sierra Club,
`463 U.S. 680 (1983) .......................................... 3
`Sebelius v. Cloer,
`569 U.S. 369 (2013) .......................................... 4
`SFA Sys., LLC v. Newegg Inc.,
`793 F.3d 1344 (Fed. Cir. 2015) .......... 15, 17, 18
`Thermolife Int’l LLC v. GNC Corp.,
`922 F.3d 1347 (Fed. Cir. 2019) .... 15, 16, 17, 22
`CONSTITUTIONAL PROVISION
`U.S. CONST. Art. I, § 8, cl. 8 ...................................... 12
`STATUTES
`17 U.S.C. § 505...................................................... 9, 11
`28 U.S.C. § 1254(1) ..................................................... 1
`35 U.S.C. § 271.......................................................... 22
`35 U.S.C. § 285.................................................. passim
`35 U.S.C. § 299.......................................................... 14
`RULE
`Sup. Ct. R. 29.6 ............................................................ i
`
`
`
`vii
`
`OTHER AUTHORITIES
`Brian C. Howard, Lex Machina Patent Litigation
`Year in Review 2017, Lex Machina, 2018 ..... 19
`
`
`
`1
`
`PETITION FOR A WRIT OF CERTIORARI
`Petitioner Blackbird Tech LLC dba Blackbird
`Technologies respectfully petitions for a writ of
`certiorari to review the judgment of the United States
`Court of Appeals for the Federal Circuit.
`OPINIONS AND ORDERS BELOW
`The panel order affirming the district court’s
`
`judgment (App. 1a-18a) is reported at 944 F.3d 910
`(Fed. Cir. 2019). The opinion and order of the district
`court (App. 19a-23a) is unreported but available at
`2018 WL 10247635 (C.D. Cal. 2018).
`STATEMENT OF JURISDICTION
`The court of appeals entered judgment on
`
`December 16, 2019. This Court’s jurisdiction is
`invoked under 28 U.S.C. § 1254(1).
`STATUTORY PROVISION INVOLVED
`Section 285 of Chapter 35 of the United States
`
`Code provides: “The court in exceptional cases may
`award reasonable attorney fees to the prevailing
`party.”
`
`INTRODUCTION
`This case presents a fundamental question of
`whether courts can consider facts unrelated to the
`case at issue in determining whether that case is
`exceptional under 35 U.S.C. § 285. In Octane Fitness,
`LLC v. ICON Health & Fitness, Inc., 572 U.S. 545
`(2014), this Court held that an exceptional case is “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
`
`
`
`2
`
`of the case) or the unreasonable manner in which
`the case was litigated.” This Court further held
`that “district courts may determine whether a case
`is
`‘exceptional’
`in the case-by-case exercise of
`their discretion, considering the totality of the
`circumstances.” Id. Although this Court declined to
`set forth any rigid rule identifying factors relevant to
`the totality of the circumstances, its holding makes
`clear those factors are not limitless. As set forth in
`Octane Fitness, the relevant facts should be limited to
`those that aid in the determination of (1) the strength
`of a party’s litigating position in the case, or (2) the
`unreasonable manner in which the case was litigated.
`These are unquestionably determinations that are
`case specific, and accordingly, should rely only on
`those facts relevant to that case.
`Both the Federal Circuit and district court
`erroneously broadened the scope of 35 U.S.C. § 285
`and this Court’s holding in Octane Fitness, LLC v.
`ICON Health & Fitness, Inc., 572 U.S. 545 (2014) by
`considering facts unrelated to the case at issue,
`including facts regarding the general number of
`lawsuits filed by Petitioner. By doing so, the Federal
`Circuit has put the Petitioner at issue in what should
`otherwise be an isolated determination of whether a
`particular case is exceptional. The Federal Circuit
`and district court’s reliance on these extraneous facts
`is particularly troubling since neither court ever
`evaluated any of those prior cases filed by Petitioner
`and simply relied on the arbitrary number of cases
`that were filed. The Federal Circuit, therefore, has
`sanctioned a dangerous expansion of § 285. But given
`this Court’s guidance that exceptional cases are a
`“case-by-case exercise” that involve facts closely tied
`to the actual case, the Federal Circuit erred in relying
`
`
`
`3
`
`on the number of lawsuits filed by Petitioner (without
`any analysis of those cases) in determining this case
`was exceptional.
`This Court should grant review, correct the
`Federal Circuit’s error, and remand for further
`proceedings consistent with the Court’s ruling.
`STATEMENT
`Legal Background
`A.
`Under the “bedrock principle known as the
`‘American Rule,’
`[e]ach
`litigant pays his own
`attorney’s fees, win or lose, unless a statute or
`contract provides otherwise.” Hardt v. Reliance
`Standard Life Ins. Co., 560 U.S. 242, 253 (2010)
`(quoting Ruckelshaus v. Sierra Club, 463 U.S. 680,
`683, 103 S.Ct. 3274, 77 L.Ed.2d 938 (1983)).
`“Notwithstanding the American Rule, however, we
`have long recognized that federal courts have
`inherent power to award attorney’s fees in a narrow
`set of circumstances, including when a party brings
`an action in bad faith.” Marx v. Gen. Revenue Corp.,
`568 U.S. 371, 382 (2013).
`fee-shifting provision
`The Patent Act’s
`authorizes district courts to award attorney’s fees to
`prevailing parties only in “exceptional cases.” 35 U.S.C.
`§ 285. Section 285 states that a district court “may
`award reasonable attorney fees to the prevailing
`party.” It thus authorizes fee-shifting if a particular
`case is exceptional, but without specifying standards
`that courts should adopt, or guideposts they should
`use,
`in determining when such awards are
`appropriate. In Octane Fitness, this Court examined
`the Federal Circuit’s decision in Brooks Furniture
`
`
`
`4
`
`Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378, 1381
`(2005) in which the Federal Circuit defined an
`“exceptional case” as one which either involves
`“material inappropriate conduct” or is both “objectively
`baseless” and “brought in subjective bad faith.”
`The Court began its analysis by finding that
`the Patent Act does not define “exceptional,” so it
`construed it “‘in accordance with [its] ordinary
`meaning.’” Octane Fitness, 572 U.S. at 553 (quoting
`Sebelius v. Cloer, 569 U.S. 369, 376 (2013)). Based on
`the plain and ordinary meaning of exceptional, this
`Court rejected the Federal Circuit’s test in Brooks
`Furniture and held that “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.” Id. at 554. The Court
`further held that “[d]istrict courts may determine
`whether a case is ‘exceptional’ in the case-by-case
`exercise of their discretion, considering the totality of
`the circumstances” and that “‘[t]here is no precise rule
`or formula for making these determinations,’ but
`instead equitable discretion should be exercised ‘in
`light of the considerations we have identified.’” Id.
`(quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 534
`(1994).
`the Court
`Further relying on Fogerty,
`consider a
`explained
`“district
`courts
`could
`‘nonexclusive’ list of ‘factors,’ including ‘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. at 554, n. 6
`
`
`
`5
`
`(quoting Fogerty, 510 U.S. at 534, n. 19 (internal
`quotation marks omitted)). Notably, in reaching these
`conclusions, this Court never indicated that the scope
`of § 285 was untethered to the instant case.
`B.
`Proceedings Below
`This petition arises from a patent infringement
`case wherein Petitioner Blackbird Tech LLC dba
`Blackbird Technologies, the patent owner, accused
`Respondents Health in Motion LLC (“HIM”) and
`Leisure Fitness Equipment LLC (HIM’s distributor)
`of infringing U.S. Pat. No. 6,705,976 (the “‘976
`Patent”) by manufacturing and selling the “M1 Multi-
`Gym,” an at-home
`fitness
`trainer. Petitioner
`originally filed the underlying suits in October 2016
`in the District of Delaware. The cases were
`transferred to the Central District of California in
`May of 2017.
`During the course of the district court
`litigation, Petitioner
`repeatedly attempted
`to
`ascertain Respondents’ financial information so that
`it could perform a valuation of the case and formulate
`an appropriate demand for possible resolution. After
`almost 14 months of waiting, Respondents provided
`the requested sales information. At that same time,
`Respondents made their first disclosure of any non-
`infringement positions. Based on those sales figures,
`Petitioner offered to settle the case for $80,000, which
`was approximately a 4% royalty on Respondents’
`sales and projected revenue for future sales of the
`accused product over the life of the patent-in-suit. The
`royalty rate was based upon previous licenses.
`Respondents
`rejected
`that offer and
`instead
`demanded that Petitioner pay their attorneys’ fees
`based on the alleged strength of their non-
`
`
`
`6
`
`infringement case. Respondents’ financial disclosures
`made it clear to Petitioner that its total potential
`recovery would be in the mid five figures. Knowing
`that upcoming litigation costs would quickly dwarf
`that figure, Petitioner aggressively sought to resolve
`the litigation and cut off further costs for both parties.
`Respondents rejected all offers and refused to discuss
`any terms that did not include Petitioner paying its
`legal fees.
`With no remaining way to avoid pre-trial costs,
`Petitioner was left with two choices: (1) prepare for
`and conduct a trial that could, at best, recoup far less
`than the marginal cost of a trial, or (2) dismiss the
`case. On May 28, 2018, Petitioner chose the latter and
`filed a dismissal and covenant not to sue defendants.
`The district court dismissed this case on June 15,
`2018, but
`retained
`jurisdiction
`to
`consider
`Respondents’ motion for fees. On June 28, 2018,
`Respondents
`submitted
`their motion
`seeking
`attorneys’ fees. Prior to Petitioner dismissing the
`case, the district court issued no substantive rulings
`either on the merits or for discovery matters,
`including no claim construction order or summary
`judgment rulings.
`On September 10, 2018, the district court
`granted Defendants their requested attorneys’ fees in
`full. Despite the lengthy factual history presented to
`the district court, in a three-page opinion with
`virtually no substantive analysis or meaningful
`evaluation of the full record, the district court found
`for the Respondents on every issue. Regarding the
`strength of Petitioner’s litigation position, the district
`court held only that Petitioner’s claim construction and
`infringement contentions were flawed, but provided
`
`
`
`7
`
`no other reasoning or analysis. (App. 20a). Regarding
`Petitioner’s litigation conduct, the district court found
`that Petitioner’s settlement demands and inadvertent
`failure to produce a handful of documents constituted
`exceptional conduct. (App. 21a). And, although
`Petitioner dismissed the case and filed a covenant not
`to sue to avoid litigating a case with minimal value,
`the district court also found these actions supported
`an exceptional case finding. (App. 21a).
`In addition to the Octane Fitness factors, the
`district court found the fee award was “warranted
`here to deter future abusive litigation.” (App. 21a).
`However, the only basis for such deterrence was the
`district court’s statement that “[s]ince 2014, Plaintiff
`has filed over one hundred patent infringement
`lawsuits, and none have been decided, on the merits,
`in favor of Plaintiff.” (App. 21a). The district court
`provided no analysis of any of those previous
`unrelated lawsuits but nevertheless relied on those
`lawsuits as a basis for finding the case exceptional.
`Petitioner appealed, and on December 16,
`2019, the Federal Circuit affirmed the district court’s
`findings. Blackbird Tech LLC v. Health In Motion
`LLC, 944 F.3d 910, 914-917 (Fed. Cir. 2019). In
`further finding that the district court “did not abuse
`its discretion by considering the need to deter future
`abusive litigation,” the Federal Circuit directly
`quoted the district court’s basis for reaching that
`conclusion – i.e., that “Blackbird has filed over one
`hundred patent infringement lawsuits, and none have
`been decided on the merits, in favor of [Blackbird].”
`(App. 13a) (quoting App. 21a (district court opinion)).
`In a footnote, the Federal Circuit explained further
`that:
`
`
`
`8
`
`As of August 2018, Blackbird had filed
`“over 110” lawsuits since its inception in
`2014. Blackbird admits that the vast
`majority of these lawsuits were settled
`before a determination on the merits
`could be made, and acknowledges that
`not a single of its lawsuits “ha[s] reached
`a full, final decision on the merits.”
`(App. 14a, n. 8 (citations omitted)).
`As is more fully explained below, the Federal
`Circuit erred in considering Petitioner’s previous
`cases in affirming the district court’s finding that this
`case was exceptional.
`REASONS FOR GRANTING THE PETITION
`I.
`THE FEDERAL CIRCUIT’S FINDINGS ARE
`UNSUPPORTED BY THIS COURT’S DECISION IN
`OCTANE FITNESS, INCONSISTENT WITH THE
`OBJECTIVES OF THE PATENT ACT, AND
`CONFLICTS WITH ITS OWN PRECEDENT
`A.
`The Federal Circuit’s Findings
`Are Unsupported by This Court’s
`Decision in Octane Fitness
`The sole reason the Federal Circuit justified
`fees as a deterrence was the arbitrary number of cases
`previously filed by Petitioner. (App. 14a, & 14a, n. 8).
`But neither the district court nor the Federal Circuit
`ever analyzed any of those cases to determine (1) if
`they were related to the present case, or (2) whether
`those cases involved any wrongdoing by Petitioner.
`Instead, they simply concluded, without more, that
`these unrelated, unanalyzed cases somehow warrant
`the need for deterrence. Such a broad application of
`
`
`
`9
`
`§ 285—applying facts unrelated to the present case—
`has no support in this Court’s precedent.
`In finding that fees were justified as a
`deterrent
`in this case
`(based on Petitioner’s
`previously unrelated and unexamined cases), the
`district court cited to this Court’s decision in Octane
`Fitness. (App. 21a). Although not directly cited in the
`opinion, the district court likely relied on a footnote
`from Octane Fitness as support for its deterrence
`finding. In particular, in Octane Fitness this Court
`noted “district courts could consider a ‘nonexclusive’
`list of ‘factors,’ including ‘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. at 554, n. 6
`(quoting Fogerty, 510 U.S. at 534, n. 19 (internal
`quotation marks omitted)).
`The Court in Octane Fitness did not provide
`any additional guidance as to what is appropriate to
`consider in evaluating the need for deterrence, nor did
`it condone what the Federal Circuit did here.1 There
`is no support, in Octane Fitness or elsewhere, for the
`proposition that the number of previous unrelated
`lawsuits filed by a plaintiff can (or should) have any
`bearing on whether deterrence is warranted. Octane
`
`1 The Court’s footnote in Octane Fitness quoted directly from the
`decision in Fogerty, which was a copyright case evaluating fee-
`shifting under 17 U.S.C. § 505. Fogerty, 510 U.S. at 519. Fogerty
`also did not expand on the deterrence factor, as the same
`language was quoted from a Third Circuit copyright decision,
`Lieb v. Topstone Indus., Inc., 788 F.2d 151, 156 (3d Cir. 1986). In
`that regard, this Court has never explained what facts should be
`considered in determining whether deterrence is an appropriate
`justification for fee-shifting.
`
`
`
`10
`
`Fitness does not support such expansion of the
`statute, nor should it. In defining “exceptional case,”
`the Court in Octane Fitness focused solely on
`considerations that are directly related to the facts of
`the case at issue—“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.” 572 U.S. at 554. There can be no
`legitimate dispute that this Court’s definition was
`narrowly tailored to circumstances relevant to the
`instant case (“considering . . . the facts of the case”
`and “manner in which the case was litigated”). It
`naturally follows that the other factors identified
`by this Court (frivolousness, motivation, objective
`unreasonableness, compensation, and deterrence)
`would likewise be rooted in the facts of the instant
`case—not facts from other unrelated cases. Thus, the
`Federal Circuit and district court erred in reaching
`beyond the facts of this case to find deterrence was
`required, which finds no support in Octane Fitness,
`either expressly or implicitly.
`The Federal Circuit’s ruling also runs afoul of
`this Court’s established principle that, with regard to
`fee-shifting, “a court may not treat prevailing
`plaintiffs and prevailing defendants any differently.”
`Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 1979,
`1985 (2016) (citing Fogerty, 510 U.S. at 527).
`Although Kirtsaeng and Fogerty involved the issue of
`defendants being held to a more stringent fee-shifting
`standard than plaintiffs, the Court’s “evenhanded”
`principle cuts both ways. Allowing the number of
`cases a plaintiff has filed to influence whether a
`particular case is exceptional, which is what the
`
`
`
`11
`
`Federal Circuit has done here, swings the pendulum
`in the opposite direction creating a severe imbalance
`in favor of defendants. This is why any fee-shifting
`determination must be limited to facts directly
`related to the instant case. Rather than maintain the
`balance, the Federal Circuit opened the door to
`consideration of any fact regarding a plaintiff, such as
`the arbitrary number of (unrelated) cases filed by a
`plaintiff. Doing so has put the plaintiff at issue, rather
`than the case and, as a result, a different set of
`considerations is applied to plaintiffs. This is in direct
`contradiction with this Court’s established principles.
`Although Octane Fitness did not expand on the
`deterrence factor, in Kirtsaeng, another copyright
`case dealing with the fee-shifting provision in § 505,
`this Court again quoted the Fogerty language but
`noted that Fogerty “left open the possibility of
`providing further guidance in the future, in response
`to
`(and grounded on)
`lower courts’ evolving
`experience.” 136 S. Ct. 1979, 1985 (2016) (citing
`Fogerty, 510 U.S. at 534-535); see also Martin v.
`Franklin Capital Corp., 546 U.S. 132, 140, n.* (2005)
`(noting that Fogerty was not intended to be the end of
`the matter). Under such guidance, this Court should
`respond to the Federal Circuit’s (and district court’s)
`unsupported expansion of the fee-shifting factors,
`now considering evidence outside the scope of the
`instant case. For that reason, this Court should
`reverse and set the boundaries as to what can be
`considered
`in determining what comprises an
`exceptional case, including what is appropriate to
`justify a need for deterrence.
`
`
`
`
`12
`
`B.
`
`The Federal Circuit’s Findings
`Contradict the Objectives of the
`Patent Act
`This Court has emphasized that “in a system of
`laws discretion is rarely without limits.” Flight
`Attendants v. Zipes, 491 U.S. 754, 758 (1989). In the
`context of fee-shifting, this Court has explained:
`Without
`governing
`standards
`or
`principles, such provisions threaten to
`condone judicial whim or predilection.
`At
`the
`least, utterly
`freewheeling
`inquiries often deprive litigants of the
`basic principle of justice that like cases
`should be decided alike . . . as when, for
`example, one judge thinks the parties’
`motivation[s] determinative and another
`believes the need for compensation
`trumps all else . . . . And so too, such
`unconstrained
`discretion
`prevents
`individuals from predicting how fee
`decisions will turn out, and thus from
`making properly informed judgments
`about whether to litigate. For those
`reasons, when applying fee-shifting laws
`with no explicit limit or condition, we
`have nonetheless found limits in them—
`and we have done so, just as both parties
`urge, by looking to the large objectives of
`the relevant Act . . . .
`Kirtsaeng, 136 S. Ct. at 1985–86 (internal quotations
`and citations omitted). Article I, § 8, cl. 8, of the
`Constitution grants to the Congress the power “(t)o
`promote the Progress of Science and useful Arts, by
`securing for limited Times to Authors and Inventors
`
`
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`the exclusive Right to their respective Writings and
`Discoveries . . . .” The objectives of the Patent Act were
`explained in Kewanee Oil Co. v. Bicron Corp.:
`The stated objective of the Constitution
`in granting the power to Congress to
`legislate in the area of intellectual
`property is to ‘promote the Progress of
`Science and useful Arts.’ The patent
`laws promote this progress by offering a
`right of exclusion for a limited period as
`an incentive to inventors to risk the
`often enormous costs in terms of time,
`research,
`and
`development. The
`productive effort thereby fostered will
`have a positive effect on society through
`the introduction of new products and
`processes
`of manufacture into
`the
`economy, and the emanations by way of
`increased employment and better lives
`for our citizens.
`416 U.S. 470, 480–81 (1974). Expanding § 285’s
`application to include consideration of facts unrelated
`to the instant case would be inconsistent with the
`objective of the Patent Act – to “promote the Progress
`of Science and useful Arts.” Sanctioning a plaintiff
`simply for filing more lawsuits than another would
`serve a conflicting objective. Instead of promoting
`science and the arts, it would inhibit such progress by
`constraining patent holders from enforcing their
`rights against any and all known offenders out of fear
`those same enforcement efforts will be used against
`them.
`Under the Federal Circuit’s application, § 285
`would impede patent holders’ ability to freely protect
`
`
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`their rights against any number of infringers. This is
`true not only for enforcement of a single patent across
`multiple defendants, but also for the situation that
`occurred here — enforcement of unrelated patents
`against unrelated defendants. No such restrictions
`comport with the primary objective of the Patent
`Act — to promote innovation.
`More, the plain language of § 285 does not
`support the Federal Circuit’s expansion. Section 285
`states: “[t]he court in exceptional cases may award
`reasonable attorney fees to the prevailing party.”
`(emphasis added). The statute is entirely based on
`whether a particular case is exceptional. This Court’s
`decision in Octane Fitness supports that reading,
`looking to facts related to the case being evaluated.
`There is nothing in § 285 to support the Federal
`Circuit’s expansion, which now considers awarding
`attorney’s fees based on extraneous actions of a
`plaintiff. This is entirely inconsistent with the
`objectives of the statute itself.
`
`The implications of the Federal Circuit’s
`decision reach beyond § 285, and conflict with other
`provisions of the Patent Act. The 2013 amendments
`to § 299 requires the filing of separate suits against
`defendants concerning the same patent. These
`amendments, enacted to deter single filings against
`many defendants, have resulted in many more
`individual cases being filed by a single plaintiff. But
`under the Federal Circuit’s ruling, the § 299
`requirement can now be used against plaintiffs to find
`an exceptional case. That is particularly unfair in
`circumstances such as exist here, where Petitioner’s
`previous cases (relied on by the Federal Circuit to find
`an exceptional case) did not involve the same patents,
`
`
`
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`issues. They were completely
`defendants, or
`unrelated. And, neither the Federal Circuit nor the
`district court analyzed even one of those cases in an
`attempt to relate them to the instant case. The
`Federal Circuit’s consideration of the number of
`lawsuits filed by a plaintiff penalizes plaintiffs for
`following statutory requirements.
`
`The Federal Circuit’s findings contradict not
`only the large objectives of the Patent Act, but also
`specific provisions, and therefore, its decision should
`be reversed.
`C.
`The Federal Circuit’s Findings
`Conflict With Its Own Precedent
`The only basis the Federal Circuit had for
`deterring Petitioner was that “Blackbird has filed
`over one hundred patent infringement lawsuits, and
`none have been decided on the merits, in favor of
`[Blackbird].” (App. 14a (quoting App. 21a) (district
`court opinion)); see also App. 14a, n. 8. But in
`Thermolife Int’l LLC v. GNC Corp., the Federal
`Circuit plainly held that “filing a large number of
`suits does not, by itself, justify an inference of … an
`improper motive.” 922 F.3d 1347, 1363 (Fed. Cir.
`2019) (citing SFA Sys., LLC v. Newegg Inc., 793 F.3d
`1344, 1351 (Fed. Cir. 2015)). It is not clear how the
`Federal Circuit’s decision in this case can be
`reconciled with its own holding in Thermolife, which
`was decided only six months prior to the decision in
`this case.
`In Thermolife, the Federal Circuit evaluated
`whether the district court abused its discretion in
`granting defendants’ motion for fees under 35 U.S.C.
`§ 285. In concluding fees were appropriate, the
`
`
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`16
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`district court found that plaintiffs failed to make an
`