Docket No. 2014-1297
PROST, MOORE, O’MALLEY
April 10, 2015
Brief Summary: DC decision refusing to award fees under 35 U.S.C. § 285 and § 28 USC 1927 vacated and remanded in view of Octane Fitness (US 2014).
Summary: Vizio appealed DC denial of attorney and expert witness fees under “35 U.S.C. § 285, § 28 USC 1927, and the court’s inherent power”. The DC found that Oplus engaged in litigation misconduct including “delay[ing] the litigation by strategically amending its claims to manufacture venue” thereby “flout[ing] the standards of appropriate conduct and professional behavior” (“only the most tenuous basis in its initial complaint for bringing suit in Illinois…first amended complaint…rendered its allegations against Sears prima facie inadequate.”) It also found “Oplus misused the discovery process to harass Vizio by ignoring necessary discovery, flouting its own obligations, and repeatedly attempting to obtain damages information to which it was not entitled” and engaged in an “abusive discovery strategy”. Other similar findings were also described. The DC “found the case exceptional under 35 U.S.C. § 285 and that Oplus and its counsel were vexatious litigants and engaged in litigation conduct” but denied Vizio’s request for fees in part because “[t]here is little reason to believe that significantly more attorney fees or expert fees have been incurred than would have been in the absence of Oplus’s vexatious behavior.” Regarding § 1927, the DC found “no evidence suggesting that Oplus’s behavior stemmed from bad faith or a sufficient intent to harass”. The FC reviewed these decisions for abuse of discretion. The FC opinion explained that at the time of the DC decision, clear and convincing evidence was required (Brooks, FC 2005). Subsequent to the DC decision, the Supreme Court held “nothing in § 285 justifies such a high standard” (Octane Fitness, US 2014) thereby “lower[ing] considerably the standard for awarding fees”. The panel noted that given Oplus’s misconduct described by the DC, “it is difficult to imagine how Vizio had not incurred additional expenses defending against such filings” (“it seems this sort of discovery abuse would increase litigation costs”). It was not able to “find a basis to support the court’s refusal to award fees” and “the court must articulate the reasons for its fee decision”. The DC decision was therefore vacated and remanded.