Last Week in the Federal Circuit (June 29-July 2): Patent Plaintiff Can’t Escape Past

It was a short week in the Federal Circuit with the Fourth of July holiday as the Federal Circuit ramps up for the July argument sitting. All said, there were only 10 decisions by the Court. As usual, we provide last week’s statistics and our case of the week—our highly subjective selection based on whatever case piqued our interest.

Precedential opinions: 5

Non-precedential opinions: 5

Rule 36: 0

Longest pending case from argument: Sharpe v. Secretary of Health and Human Services, No. 19-1951 (120 days from argument to decision)

Shortest pending case from argument (non-Rule 36): Tie between CardioNet, LLC v. InfoBionic, Inc., No. 20-1018 and Braemar Manufacturing, LLC v. The Scottcare Corporation, No. 19-2263 (27 days from argument to decision)

Case of the week: Electronic Communication Technologies, LLC v. ShoppersChoice.com LLC, No. 19-2087 (July 1, 2020)

Panel: Chief Judge Prost and Judges Dyk and Wallach, with Judge Wallach writing the opinion.

Read this case if: you have an exceptional case motion against a previously litigious plaintiff.

In this case, a patent plaintiff could not escape its long record of past litigation conduct. Patentee Electronic Communication Technologies (ECT) had a habit of filing patent infringement lawsuits seeking “low-value ‘license fees’” to force settlements. In fact, from 2011-2015, ECT had sued at least 150 defendants alleging infringement of various claims within the same patent family. When ECT sued ShoppersChoice on claims in that patent family (and lost on 101 grounds), ShoppersChoice sought attorney’s fees.  The district court denied fees finding the case not exceptional.

The Federal Circuit held that the district court abused its discretion. Quoting Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014), the Federal Circuit explained that an “‘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.” For starters, the Federal Circuit held that the district court clearly erred by failing to address ECT’s past litigation conduct. In particular, the Federal Circuit highlighted the sheer number of lawsuits ECT had filed and threated to file, including “ECT’s demand for a low-value settlement—ranging from $15,000 to $30,000—and subsequent steps—such as failure to proceed in litigation past claim construction hearings” in other cases. The Court suggested that this conduct “indicates the use of litigation to achieve a quick settlement with no intention of testing the strength of the patent or its allegations of infringement.” In addition, the Federal Circuit emphasized a decision by another district court in a different lawsuit that awarded fees against ECT. The Court explained that ruling recited ECT’s pattern of unreasonable litigation conduct and found that “no reasonable patent litigant” would have believed the asserted claim was viable. Lastly, although not critical to its decision, the Court noted that the district court applied the incorrect attorney’s fees statute—15 U.S.C. § 1117 in the Lanham Act rather than 35 U.S.C. § 285 in the Patent Act. The Federal Circuit told the district court to apply the right statute on remand.