The United States Court of Appeals for the Federal Circuit recently issued a non-precedential decision in a patent infringement action involving Justin Timberlake and Britney Spears and their production companies. The Federal Circuit’s decision vacated an earlier award of attorneys’ fees to Timberlake, Spears and the other defendants based on a finding that the case was exceptional within the meaning of 35 U.S.C. 285. 

The original action in this patent infringement litigation was filed by Large Audience Display Systems (LADS), who alleged that Timberlake, Spears and their production companies infringed upon U.S. Patent No. 6,669,346, titled Large-Audience, Positionable Imaging and Display System for Exhibiting Panoramic Imagery, and Multimedia Content Featuring a Circularity of Action. This patent protects a panoramic imaging and display system in which an array of speakers is positioned around a perimeter of the system’s screen to provide audible sound which pans in such a way that can be synchronized with the movement of objects on the screen.

Before the district court issued its decision in the case in 2015, the defendants challenged the validity of all asserted claims of the ‘346 patent by filing a petition for inter partes reexamination, a legal proceeding no longer available at the Patent Office, but available to the defendants back in 2011 when the petition was originally filed. Ultimately, the Patent Trial and Appeal Board (PTAB) cancelled 14 claims of the ‘346 patent.

After PTAB issued its decision, the defendants filed a motion to dismiss the case from district court with prejudice in April 2015 and the case was dismissed in June 2015. In September 2015, the district court further granted an order awarding attorney’s fees and costs to the defendants in the case. The court granted the defendants an award in excess of $755,000, finding that the case was exceptional for several reasons. 

The Federal Circuit panel disagreed, finding “that the district court based its ruling, to some extent, on both a misunderstanding of what factors are relevant to an exceptionality determination and a clearly erroneous view of the record evidence.” 

The Federal Circuit specifically disagreed that the USPTO’s cancellation of the asserted claims through reexamination was proof of LADS making a frivolous claim. “The fact that PTO canceled the asserted claims after LADS filed its complaint, without more, does not support a finding of frivolousness,” the panel explained.

Interestingly, not only did this Federal Circuit decision undo the district court’s finding of exceptionality, thereby preventing the award of attorneys’ fees and costs, but the Federal Circuit also raised big questions as to how the court came to its conclusion on the amount of fees to be awarded. “In this case, little discovery had been conducted by the parties, and the case was dismissed with prejudice before trial,” the Federal Circuit noted. Further, although the defendants were represented by counsel from New York, the case was tried in California, meaning that California fee rates should be applied to determine a reasonable award. Finally, the Federal Circuit also had issue with the bill itself, raising serious questions about whether redundant work was billed to Timberlake, Spears and the production company defendants.

Ultimately, the per curiam decision from the panel made up of Judges Moore, Linn and O’Malley explained that certain of the factors relied upon by the district court to find this case to be exceptional were entitled to no weight under § 285. Thus, the attorneys’ fee order of the district court was vacated and the case remanded for further proceedings.

Tags: Attorneys Fees, CAFC, Federal Circuit, patent, patents

This entry was posted on Friday, November 25th, 2016 at 14:56 and is filed under Federal Circuit Cases, Patent Damages, Patent Issues. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.