In a December 17, 2013 ruling, Judge P. Kevin Castel denied attorneys' fees to defendants Facebook, Inc. and Google, Inc. after they successfully secured summary judgment dismissing plaintiff Wireless Ink Corporation's patent infringement action. Noting that a court may award attorneys' fees under 35 U.S.C. § 285 in an exceptional case, Judge Castel wrote that as "a threshold matter, a court must first determine whether the party seeking attorney fees has proved by clear and convincing evidence that the case is exceptional."Google and Facebook argued that the case is exceptional, and became objectively baseless and pursued in bad faith after the Court's claim construction ruling rendered it impossible for Wireless Ink to prevail on its infringement claims. Wireless Ink contended that it opposed summary judgment based on its expert's opinion of infringement that was rendered after the Court's claim construction. In rejecting the defendants' argument, Judge Castel first noted that a "loss on summary judgment does not . . . lead to a presumption that a claim was objectively baseless," and accepted Wireless Ink's contention that its reliance on its expert witness was reasonable. The Court concluded that because "Facebook and Google have not shown, by clear and convincing evidence, that [Wireless Ink's expert's] opinions were objectively baseless, a finding that Wireless Ink's positions on infringement were objectively baseless is not warranted.
In then considering whether Wireless Ink acted in subjective bad faith, Judge Castel wrote that there "is a presumption that an assertion of infringement of a duly granted patent is made good faith," but that an inference of bad faith may be drawn where there is evidence of "wrongful intent, recklessness, or gross negligence." The Court rejected the defendants' argument that an inference of bad faith could be drawn "based on Wireless Ink's allegedly unreasonable litigation positions," again noting that Wireless Ink reasonably relied on its expert's opinions, which were formed after claim construction. Judge Castel ruled that the "decision of a party to rely on its own expert in deciding to continue litigation is not inherently unreasonable."
The Court also rejected the defendant's argument that Wireless Ink engaged in litigation misconduct, finding that "Google has not provided any direct evidence to indicate that Wireless Ink's behavior throughout this litigation was anything more than a good faith attempt at representing its client . . . . Absent direct evidence of malicious intent, the Court concludes that Wireless Ink's actions were not so egregious as to warrant finding of litigation misconduct." Judge Castel thus denied the motion for fees.
