United States Court of Appeals
`for the Federal Circuit
`______________________
`
`ATEN INTERNATIONAL CO., LTD.,
`Plaintiff-Appellee
`
`v.
`
`UNICLASS TECHNOLOGY CO., LTD.,
`ELECTRONIC TECHNOLOGY CO., LTD., AIRLINK
`101, PHOEBE MICRO, INC., BROADTECH
`INTERNATIONAL CO., LTD., DBA LINKSKEY,
`BLACK BOX CORPORATION, BLACK BOX
`CORPORATION OF PENNSYLVANIA,
`Defendants-Appellants
`______________________
`
`2018-1922
`______________________
`
`Appeal from the United States District Court for the
`Central District of California in No. 2:15-cv-04424-AG-
`AJW, Judge Andrew J. Guilford.
`______________________
`
`Decided: August 6, 2019
`______________________
`
`EDWARD NAIDICH, Mei & Mark LLP, Washington, DC,
`argued for plaintiff-appellee. Also represented by LEI MEI,
`RICHARD HADORN, PHILIP ANDREW RILEY, LAURENCE M.
`SANDELL.
`
` JOSEPH PIA, Pia Anderson Moss Hoyt, Salt Lake City,
`
`
`for the Federal Circuit
`______________________
`
`ATEN INTERNATIONAL CO., LTD.,
`Plaintiff-Appellee
`
`v.
`
`UNICLASS TECHNOLOGY CO., LTD.,
`ELECTRONIC TECHNOLOGY CO., LTD., AIRLINK
`101, PHOEBE MICRO, INC., BROADTECH
`INTERNATIONAL CO., LTD., DBA LINKSKEY,
`BLACK BOX CORPORATION, BLACK BOX
`CORPORATION OF PENNSYLVANIA,
`Defendants-Appellants
`______________________
`
`2018-1922
`______________________
`
`Appeal from the United States District Court for the
`Central District of California in No. 2:15-cv-04424-AG-
`AJW, Judge Andrew J. Guilford.
`______________________
`
`Decided: August 6, 2019
`______________________
`
`EDWARD NAIDICH, Mei & Mark LLP, Washington, DC,
`argued for plaintiff-appellee. Also represented by LEI MEI,
`RICHARD HADORN, PHILIP ANDREW RILEY, LAURENCE M.
`SANDELL.
`
` JOSEPH PIA, Pia Anderson Moss Hoyt, Salt Lake City,
`
`
`
`2
`
`ATEN INTERNATIONAL CO., LTD. v. UNICLASS TECHNOLOGY
`CO., LTD.
`
`UT, argued for defendants-appellants. Also represented by
`ROBERT AYCOCK.
` ______________________
`
`Before MOORE, WALLACH, and TARANTO, Circuit Judges.
`MOORE, Circuit Judge.
`Uniclass Technology Co., Ltd. (“Uniclass”), as well as
`Electronic Technology Co., Ltd.; Airlink 101; Phoebe Micro,
`Inc.; Broadtech International Co., Ltd., d/b/a Linkskey;
`Black Box Corporation; and Black Box Corporation of
`Pennsylvania (collectively the “customer defendants”) (all
`collectively “Appellants”) appeal the United States District
`Court for the Central District of California’s order denying
`Appellants’ motion for attorney fees. Because we hold the
`district court did not abuse its discretion in declining to
`find this an exceptional case under 35 U.S.C. § 285, we af-
`firm.
`
`BACKGROUND
`Uniclass and ATEN International Co., Ltd. (“ATEN”)
`are involved in making and selling keyboard-video-mouse
`switch systems that allow a user to control multiple com-
`puters from a single keyboard, video device, and mouse. In
`2011, Uniclass stopped making payments on a license
`agreement it entered with ATEN in 2009. In 2014, ATEN
`sued Uniclass and the customer defendants alleging in-
`fringement, seeking damages and injunctive relief. Uni-
`class moved for summary judgment on ATEN’s lost profits
`theory of damages, which the district court granted in April
`2017. ATEN proceeded to trial based on a reasonable roy-
`alty theory of damages, under which its expert testified
`that the maximum recovery (not including its requested
`treble damages) was $678,337. At trial, a jury found that
`Uniclass did not infringe the asserted claims of U.S. Patent
`No. 8,589,141 or U.S. Patent No. 7,640,289. It also found
`the asserted claims of the ’141 patent invalid. ATEN
`
`
`
`ATEN INTERNATIONAL CO., LTD. v. UNICLASS TECHNOLOGY
`CO., LTD.
`
`3
`
`appealed various aspects of the September 2017 jury ver-
`dict separately in No. 18-1606, which we also decide today.
`After trial, Uniclass moved to declare this case excep-
`tional under 35 U.S.C. § 285, arguing that ATEN did not
`conduct an adequate pre-filing investigation, unnecessarily
`increased the costs of claim construction, drastically in-
`creased discovery costs by frequently changing counsel and
`infringement positions, and engaged in unreasonable liti-
`gation behavior requiring additional motion practice and
`leading to an expensive and disproportionate trial. The
`district court denied the motion.
`Uniclass timely appealed. We have jurisdiction under
`28 U.S.C. § 1295(a)(1).
` DISCUSSION
`Under § 285, “[t]he court in exceptional cases may
`award reasonable attorney fees to the prevailing party.”
`“[A]n ‘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
`courts should determine whether a case is exceptional on a
`case-by-case basis, considering the totality of the circum-
`stances. Id. We review the district court’s § 285 determi-
`nation for abuse of discretion. Highmark Inc. v. Allcare
`Health Mgmt. Sys., Inc., 572 U.S. 559, 561 (2014). “The
`abuse-of-discretion standard does not preclude an appel-
`late court’s correction of a district court’s legal or factual
`error: A district court would necessarily abuse its discre-
`tion if it based its ruling on an erroneous view of the law or
`on a clearly erroneous assessment of the evidence.” Id. at
`563 n.2 (internal quotation marks omitted).
`
`
`
`4
`
`ATEN INTERNATIONAL CO., LTD. v. UNICLASS TECHNOLOGY
`CO., LTD.
`
`I
`Appellants focus their arguments on appeal on a theory
`that the district court erred in not finding this case excep-
`tional based on ATEN’s disregard for the “foundational pol-
`icy” of proportionate litigation. Appellants’ Br. 15–16.
`Appellants summarize ATEN’s expenses as including over
`$700,000 in expert witness fees alone, without considering
`other expenses including attorney fees. Appellants argue
`that ATEN could recover, at most, $678,337 in reasonable
`royalty damages. See J.A. 902 at 7:20–8:4; J.A. 870 at
`23:8–11; J.A. 923 at 90:14–15. Accordingly, Appellants ar-
`gue this case is exceptional because the cost of litigating
`the case exceeded ATEN’s potential recovery at trial. See,
`e.g., Appellants’ Br. 15–20, 25–26. We reject this argu-
`ment. We see no error in the court’s legal analysis and no
`clear error in its fact findings.
`There is no per se rule that a case is exceptional if liti-
`gation costs exceed the potential damages. The District of
`Delaware’s post-Octane decision in EON is persuasive on
`this point: “[The court] is unaware of any de minimis ex-
`ception for infringement. It cannot be the case that a plain-
`tiff may be subjected to monetary sanctions for failing to
`drop a case against a defendant if the cost of litigation ex-
`ceeds the potential recovery.” EON Corp. IP Holdings,
`LLC v. FLO TV Inc., No. 10-812-RGA, 2014 WL 2196418,
`at *2 (D. Del. May 27, 2014). Litigation strategies motivat-
`ing a patent suit are many, with monetary damages being
`one. We routinely hear cases in which damages are not at
`issue—for example, in appeals from the International
`Trade Commission, in some Hatch-Waxman cases, and
`other cases where only an injunction is sought. A patentee
`may also bring suit to deter other competitors from in-
`fringement, encourage licensing, or test a patent’s ability
`to withstand validity challenges. Thermolife Int’l LLC v.
`GNC Corp., 922 F.3d 1347, 1363–64 (Fed. Cir. 2019).
`
`
`
`ATEN INTERNATIONAL CO., LTD. v. UNICLASS TECHNOLOGY
`CO., LTD.
`
`5
`
`Moreover, ATEN sought injunctive relief against Uni-
`class, its direct competitor. This alone undermines Appel-
`lants’ argument. The case could have proceeded to trial
`requesting only an injunction, and there would be no po-
`tential damages to compare to ATEN’s expenses. We can-
`not conclude that the district court’s decision denying
`Appellants’ motion for fees under these circumstances
`amounts to an abuse of discretion.
`Appellants argue the district court should be bound by
`its statements during trial that the court was troubled by
`disproportionate aspects of the case. But Appellants admit
`that such comments were largely directed to the amount of
`public resources expended on the limited recovery at issue.
`Appellants’ Br. 17–20 (citing J.A. 955 at 12:16–20 (regard-
`ing public resources); J.A. 1052 at 73:19–25 (regarding
`time spent with one witness); J.A. 1053 at 80:17–22 (re-
`garding the length of trial compared to damages at issue);
`J.A. 1153 at 102:15–25 (regarding ATEN’s attorney fees
`and the amount of time spent with the witness)). Appel-
`lants cite an exchange in which the court recognized a sce-
`nario in which expenditures might understandably exceed
`recovery: “I just don’t understand [expert expenditures of]
`$400,000 in a $650,000 case. When I was a lawyer, if I did
`that, I would be fired, or frankly, I’d be working for a client
`who said: They are competitors. Spend every penny.” Ap-
`pellants’ Br. 18 (citing J.A. 956 at 13:2–6 (emphasis
`added)). We cannot conclude that the court’s comments
`during trial regarding public resources render its subse-
`quent decision denying fees an abuse of discretion. We see
`no abuse of discretion in the court’s conclusion that under
`the totality of the circumstances this litigation was not ex-
`ceptional.
`
`II
`Appellants also argue the district court erred by failing
`to weigh ATEN’s frivolous damages methodology in its
`analysis. Specifically, Appellants argue the district court
`
`
`
`6
`
`ATEN INTERNATIONAL CO., LTD. v. UNICLASS TECHNOLOGY
`CO., LTD.
`
`should have weighed the strength of ATEN’s lost profits
`theory (rejected at the summary judgment stage), which
`Appellants allege was knowingly baseless and brought in
`bad faith. Appellants’ Br. 22–25.
`The district court did refer to Uniclass’ argument that
`ATEN presented a weak case for lost profits that relied on
`guesswork, which it listed among the “whole slew” of Uni-
`class’ arguments it considered. J.A. 3. The district court
`found there were “perhaps . . . shortcomings” in ATEN’s po-
`sitions that did not “amount to a showing that [ATEN’s]
`behavior was exceptional, amounting to the type of unrea-
`sonableness discussed in Octane.” J.A. 4.
`Though ATEN’s lost profits theory was not strong
`enough to withstand summary judgment, “[a] party’s posi-
`tion . . . ultimately need not be correct for them to not
`‘stand[ ] out.’” SFA Sys., LLC v. Newegg Inc., 793 F.3d
`1344, 1348 (Fed. Cir. 2015) (quoting Octane, 572 U.S. at
`544). The district court “had no obligation to write an opin-
`ion that reveals [its] assessment of every consideration.”
`Univ. of Utah v. Max-Planck-Gesellschaft, 851 F.3d 1317,
`1323 (Fed. Cir. 2017). We can find no abuse of discretion
`in the district court’s failure to discuss the strength of
`ATEN’s lost profits theory.
`III
`To the extent Appellants argue weakness in ATEN’s
`other substantive positions justifies reversing the district
`court’s determination that this case was not exceptional,
`we do not agree. Today in No. 18-1606, we reverse the dis-
`trict court’s denial of JMOL because the jury’s finding of
`anticipation was not supported by substantial evidence.
`Though we affirm as to noninfringement of the ’141 and
`’289 patents, we note that ATEN’s primary argument on
`appeal—that the court improperly gave claim construction
`disputes to the jury—was rejected because ATEN did not
`timely raise this issue with the court below. We find no
`abuse of discretion in the district court’s determination
`
`
`
`ATEN INTERNATIONAL CO., LTD. v. UNICLASS TECHNOLOGY
`CO., LTD.
`
`7
`
`that ATEN’s positions were not so objectively unreasonable
`or exceptionally meritless as to stand out from other cases.
`We have considered Appellants’ other arguments and
`find them without merit.
`CONCLUSION
`We hold the district court did not abuse its discretion
`in declining to find this an exceptional case under 35 U.S.C.
`§ 285. For the foregoing reasons, we affirm.
`AFFIRMED
`COSTS
`
`Costs to ATEN.
`
`
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