A plaintiff seeking to enforce patents claiming automated methods for uploading multimedia content was ordered to pay defendants’ attorney fees based on a finding of an “exceptional case” under U.S.C. § 285. Cellspin Soft, Inc. v. Fitbit, Inc., No. 4:17-CV-5928-YGR (N.D. Cal. July 6, 2018). The court had previously granted motions to dismiss because claims of U.S. Patent Nos. 8,738,794; 8,892,752; 9,749,847; and 9,258,698 were not patent eligible under 35 U.S.C. § 101 and the Alice/Mayo test. Relying on Inventor Holdings, LLC v. Bed Bath & Beyond Inc. (Fed. Cir. 2017), the court found the case exceptional because the claims were not only “manifestly directed to an abstract idea,” but, unlike the Inventors Holdings litigation, were sought to be enforced after a lot of post-Alice precedent should have made clear that the claims were patent-ineligible.
The plaintiff’s main basis for opposing the fee award was “a lack-of-bad-faith defense.” One of its arguments was that “it reasonably relied on the presumption of validity following the issuances of the Asserted Patents, especially the two most recent patents.” Not so fast, said the court, citing Judge Mayer’s concurrence in Ultramercial, Inc. v. Hulu, LLC (Fed. Cir. 2014), stating that there was no presumption of eligibility, in contrast to the presumption of validity. The court then took the plaintiff to task for its argument that “that it should not be forced to adjudicate the validity of its own patent and can rely on the courts to serve in that role,” explaining that patent plaintiffs must accept responsibility for their own actions:
Cellspin cannot hide behind its own refusal to analyze its patents critically. Lawyers routinely evaluate the viability of contracts and strength of claims and thereupon counsel clients to act responsibly. To do otherwise unnecessarily burdens to the courts and inflicts significant costs to the opposing parties. Given the patents at issue here, Cellspin could have litigated a test case but instead chose to file and pursue aggressively fourteen lawsuits simultaneously. It could have waited to issue overarching discovery requests but did not.
Lessons for Practice
Perhaps some day the Federal Circuit or the Supreme Court will resolve the question of whether, once the USPTO issues a patent, there is a presumption of patent-eligibility. But does it matter? Suppose a plaintiff sought to enforce a patent even though it knew there was a near, even if not absolute, certainty, that a product covered by the patent claims had been offered for sale several years before the application for the patent was filed. Wouldn’t this plaintiff’s case be exceptional, the presumption of validity notwithstanding? Similarly, hasn’t the law after Alice evolved enough so that some – maybe not many, but certainly some – patent claims are patent-ineligible under any legal light?