RICHARD G. ANDREWS, District Judge.
Pending are cross-motions for attorney's fees. (D.I. 48, 50).
Plaintiff sued Defendant for patent infringement. Plaintiff is a Delaware corporation with a place of business in Plano, Texas. Defendant is a Delaware corporation with a place of business in Parlin, New Jersey. Between June 9, 2017, and October 11, 2019, Plaintiff has sued more than thirty defendants in this District. Only three of the cases currently remain open.
There were two asserted patents in this case, the first of which — the '397 patent — was filed in 1999 and issued in 2003. The Abstract of the first patent opens by describing it as, "A method and apparatus for designing and building a web page." The specification runs 70 columns. The first claim begins, "A method to allow users to produce Internet websites on and for computers having a browser and a virtual machine capable of generating displays, said method comprising...." The second patent — the '168 patent — is a continuation-in-part of the application for the first. It issued in 2009. Its first claim begins, "A system for assembling a web site comprising: a server comprising a build engine configured to: ... "I have not read the specification in connection with these motions, but I would think that if the patents were valid,
In the instant case, the complaint — with 28 pages of text — was filed on June 9, 2017. It was answered August 22, 2017, and there was a "reply" to the counterclaims on September 12, 2017. There was a scheduling conference on October 10, 2017. The parties filed a joint claim construction chart on April 6, 2018, which reflected agreement on six terms and disputes on eleven terms. (D.I. 23). The joint claim construction brief was filed on August 6, 2018. By then, there were only three disputed constructions. (D.I. 33). On the basis of the briefing, I entered an oral order construing the three terms, generally in line with what Plaintiff had requested. On October 19, 2018, new Delaware counsel substituted into the case for Defendant. A week later, new outside counsel for Defendant was admitted pro hac vice. A few days later, new Delaware counsel substituted for Delaware counsel who had entered an appearance on October 19
Defendant filed its motion first. It is an exceptional case attorney's fees motion, based on the premise — which cannot reasonably be disputed — that Defendant is the prevailing party, and that the case is exceptional — which is disputed — because, when Plaintiff moved to have the case dismissed, Plaintiff (1) "had four weeks to produce an expert report; (2) fact discovery had closed; (3) plaintiff had not commenced source code review; and (4) plaintiff had not deposed a single witness." (D.I. 49 at 2). Defendant states that it produced "millions of line of Magento and Wordpress source code." (Id.). Plaintiff responds that it did not need to do any source code review or depose any witnesses in order to "make its case." (D.I. 51 at 16). It is rather vague about how it was going to prove infringement, stating merely that Plaintiff "had already conducted investigation of Magento and Wordpress, and believed it could demonstrate infringement independent of source code review or depositions of [Defendant]." (Id. at 16-17). Defendant replies that this case stands out from the norm because it "might be the first and only [software patent] lawsuit wherein the patentee-plaintiff maintained assertions of infringement through discovery cut-off with zero source code review and zero depositions." (D.I. 53 at 2) (emphasis omitted).
I take the gist of Defendant's motion to be that Plaintiff never had any intention of taking the case to trial, and therefore that the case was litigated in an unreasonable manner. I would have a hard time saying that Defendant has shown the case lacked substantive strength.
Plaintiff, perhaps deciding that the best defense is a good offense, asserted in response to Defendant's motion, that, au contraire, Defendant's outside counsel, Amit Agarwal, should be paying it attorney's fees because he had litigated the case in an "unreasonable, vexatious, and bad faith" manner, meaning that I should award fees either pursuant to 28 U.S.C. § 1927 or the Court's inherent power. (D.I. 50). For fees pursuant to either section 1927 or inherent power, Plaintiff concedes that the Court has to find the attorney acted in "willful bad faith" or "bad faith." (D.I. 51 at 14). Plaintiff has produced a laundry list of Mr. Agarwal's supposed transgressions, but what I see is a solo practitioner who was admitted to the California Bar just six years ago.
Plaintiff provided some indication of the settlement history of Express Mobile lawsuits in Delaware, which was that Plaintiff only sued companies it thought had annual revenues in excess of $5,000,000 (D.I. 60 at 2), and dismissed at least six cases when it was persuaded the defendant did not meet that threshold. Plaintiff has licensed nationally forty-one entities, some at a significant discount "prior to major rulings" in favor of Plaintiff, to wit, the non-institution of the IPR, and the Northern District of California decision denying the patent-eligible subject matter motion. (Id. at 5). Plaintiff states that the Delaware cases resulting in settlements before the "major rulings" provided lump sum license fees of $80,000, $50,000, $3,000, $12,500, $15,000, $65,000, and $20,000. After the PTAB decision, there were settlements for $75,000, $42,500, $90,000, $25,000, $100,000, $75,000, and $95,000. (D.I. 60).