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June 3, 2014
If the CAFC Isn't Listening, Maybe Other Judges Are
When the Supreme Court overturned the CAFC in a case known as Octane Fitness earlier this year, I noted that SCOTUS was telling the CAFC that the Federal Circuit had the wrong idea about when attorney fees could be awarded in baseless patent suits. Now, according to Joe Mullin for Ars, we have our first ruling1 putting the Octane principle into action.
The case involved another 'fitness' company - information fitness in this case. FindTheBest is a start-up that offers to help people match up offers with needs. According to Lumen View, FTB was in violation of a patent Lumen held and it sued in what has become a typical troll pattern: the suit was held back if only FTB would settle; Lumen filed a large number of similar suits all at once, etc. Most tellingly, according to the judge's decision in this case Lumen didn't do "any reasonable pre-suit investigation."
That led the judge to determine that Lumen's case fit the criteria laid out in Octane and Judge Cote has found this case to be an exceptional one that justifies shifting FTB's legal fees to Lumen. The exact amount of this shifting is still to be deteremined, as FTB will have to show the judge what it cost to defend this case.
It will be interesting to see what Lumen's response is. They may just chalk one up in the loss column and move on, assuming that other defendants will be more willing to settle. A district judge's ruling isn't precedential in other jurisdictions, but it should be helpful to other defendants. If there's a District split then that gives Lumen stronger grounds for appeal later on; on the other hand, the risks of multiple judges following Judge Cote's reasoning might give them pause.
1. According to Mike Masnick at Techdirt, "NewEgg was able to pursue fees against a troll" so this might technically not be the first.
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