iLOR, Inc. v. Google, Inc.
Docket No. 2010-1117, 1172
January 11, 2011
Subject matter: Claim construction, attorney’s fees
RADER, LINN, DYK
iLOR appealed (second related appeal) USDC ED KY order finding the case exceptional under 35 USC 285 and awarding attorneys’ fees etc. to Google. The decision was based on a finding that iLOR’s proposed construction of its claim 26 relating to the use of hyperlinks was baseless (“the case was “not close” on the merits (i.e., objectively baseless) and that iLOR had acted in subjective bad faith”). The FC disagreed and reversed. iLOR previously alleged that Google’s “Google Notebook” product infringed claim 26, but the DC found no infringement and denied a preliminary injunction. The DC “supported its construction by looking to the ordinary meaning of the claim language”, the specification, and the prosecution history. iLOR appealed that decision and the FC affirmed (iLOR, FC 2008) (based in part on its reading of the abstract). Under Professional Real Estate Investors, Inc. (US 1993), sanctions under 285 are only proper where “the lawsuit was ‘objectively baseless in the sense that no reasonable litigant could realistically expect success on the merits'” (see also Medtronic Navigation, FC 2010; Brooks Furniture, FC 2005; Wedgetail, FC 2009). The FC wrote that the objective baselessness standard is the same as the objective recklessness standard of Seagate (FC 2007 (willfulness requires showing that “infringer acted despite objectively high likelihood that its actions constituted infringement of a valid patent…state of mind of the accused infringer is not relevant”)). It was held that Google had not shown objective baselessness by clear and convincing evidence (“[o]n its face, the claim language does not preclude the patentee’s construction…[n]or does the specification clearly refute the patentee’s construction…the district court’s reliance on the prosecution history of the parent patent is misplaced”, citing Q-Pharma (FC 2004 (“‘therapeutically effective amount’ of an active ingredient in body lotion”) as an exemplary case). The panel concluded “simply being wrong about claim construction should not subject a party to sanctions where the construction is not objectively baseless.”