Intel Successfully Defends its Patent Case but Owes its Own Attorneys $9 Million for the Defense.

By Dennis Crouch

Stragent, LLC v. Intel Corp., 11-cv-0421 (E.D. Texas). JudgeDykOpinion

Federal Circuit Appellate Judge Timothy Dyk has been sitting by designation as the trial judge in this patent infringement lawsuit over video compression technology. (U.S. Patent No. 7,302,102). A jury found Stragent’s two asserted patent claims both invalid and not infringed. And, apparently, Strategent chose not to appeal that determination.

The final issue left for Judge Dyk to decide then was attorney fees and the court has now denied Intel’s motion for fees.

The ordinary rule in American law is that each side pays its own attorney fees. For a successful defendant such as Intel here, the outcome of the lawsuit is likely still a seven-figure payout to its defense team (paid by the winning defendant). As an exception to the usual rule, the Patent Act provides that a district court judge may award attorney fees to the prevailing party in “exceptional cases.” Recently in Octane Fitness, the Supreme Court rejected the Federal Circuit’s prior strict standard and high-bar for exceptional case awards and instead put the determination within the discretion of district court judges.

Under Octane Fitness,

[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 . . . considering the totality of the circumstances . . . [and excising the court's] equitable discretion.

Octane Fitness, LLC v. Icon Health & Fitness, Inc., 134 S. Ct. 1749 (2014). Despite the seeming wide decision making discretion, the Supreme Court also recognized that exceptional case awards should be “rare” and “uncommon.”

Although having a losing party is a prerequisite to an exceptional case finding, Judge Dyk here found that “the mere fact that the losing party made a losing argument is not [otherwise] a relevant consideration.” Rather, according to the opinion here focus should be on whether the arguments were “frivolous or made in bad faith.” That said, Octane does not expressly require bad faith or frivolous arguments, and that decision makes clear that exceptional case awards may be available at times when the losing parties actions are not sufficiently bad to warrant Rule 11 sanctions. A second point with regard to Rule 11 sanctions is that those sanctions tend to be focused on individualized frivolous or bad faith arguments made by parties while §285 fees are awarded with reference to the case “as a whole” and in considering “a totality of the circumstances . . . includ[ing] the conduct of the winning party.”

In considering the case at hand, Judge Dyk noted that Intel’s motion for fees “is primarily based on the fact that Stragent made losing arguments.” Although Judge Dyk agreed that Stragent’s case was “certainly a weak one,” he also noted that Intel failed to even move for summary judgment:

Stragent’s argument was certainly a weak one, but despite the alleged implausibility of Stragent’s position, Intel never sought summary judgment of non-infringement on the basis of the limitation at issue. This suggests that Intel did not always view Stragent’s infringement position as frivolous. There is little injustice in forcing Intel to bear its own attorney’s fees for defending a claim it did not challenge on summary judgment. Disposing of a frivolous claim on summary judgment would avoid a trial and have the effect of saving both parties a substantial portion of their litigation costs.

Motion for fees denied. Intel is unlikely to overturn this on appeal.

= = = = =

An interesting tidbit from the Intel’s briefs: “Intel spent approximately $9 million in legal costs.” Wow! How on earth do you spend $9 million defending a three-patent case asking only for a reasonable royalty. (By trial, the case had been narrowed to only be challenging two claims found in one of the patents.) I would really love to see the accounting for that $9 million. Of course the docket does list 17 attorneys on Intel’s side. . .

 

254 thoughts on “Intel Successfully Defends its Patent Case but Owes its Own Attorneys $9 Million for the Defense.

  1. Claim 1: A video compression method comprising: compressing a segment of an input signal using an initial quality setting; calculating a data rate for an output signal that would result from adding the compressed segment to the output signal; and in response to the calculated data rate exceeding a target rate, recompressing the segment using an automatically-selected quality setting that produces a lower data rate than the calculated data rate when the recompressed segment is added to the output signal.

    The other claims are similar. That seems rather abstract. How did this pass muster under 101? I am missing something here, right?

    1. GD, applying mathematics to useful applications is patentable. Diehr.

      Applying compression to video signals, in and out, certain presents no 101 problem.

  2. > An interesting tidbit from the Intel’s briefs: “Intel spent approximately
    > $9 million in legal costs.” Wow! How on earth do you spend $9 million
    > defending a three-patent case asking only for a reasonable royalty

    It never ceases to amaze me the level of naivete expressed by academics when it comes to patent litigation. A “reasonable royalty” does not mean that the plaintiff sought a royalty that was in any way “reasonable,” it’s simply a label for the relief sought. Your article fails to mention the amount this “reasonable” royalty was. Spending $9 million defending a patent case is not excessive when the “reasonable royalty” is hundreds of millions of dollars with a double-digit going forward royalty demand. I’ve been in cases where similar amounts were sought, and at those levels, you spare no expense. I’ve invalidated patents where I had to reconstruct third party Digital Equipment Corporation system prior art from 20 year old backup tapes that I subpoenaed from a third party, and had to hire investigators to get compatible and contemporaneous hardware from that time period, and find people who could authenticate it. A costly endeavor, but ultimately successful in a billion dollar case, but something people like Dennis would say is “excessive.” You would never do this in a case seeking what is a truly ‘reasonable’ royalty, but in the world of patent assertion entities (who have no other business and no concern with taking consistent positions across assertion and defense), rarely do you see a royalty request that is in any way ‘reasonable.’

    But I agree with the other comment contributors, the reasoning of the decision is bizarre and results-oriented. Most people in the patent litigation bar are giving very little credence to early decisions like this because judges and lawyers are still too accustomed to the old days when attorney fee recoveries were reserved only for the most frivolous of cases. It will take several years before we see decisions that reflect the reality of the Octane Fitness standard and start following the patterns you see with copyright decisions (where fee awards are not common, but far more frequent than you’d ever see in patent cases).

    1. Just an additional note that the infringement damages statute, Section 284, does NOT just award a “reasonable royalty.” It awards damages “adequate to compensate for the infringement but in no event LESS THAN a reasonable royalty,” plus interest and costs. In other words “reasonable royalty” is NOT a cap, it is merely a mandatory minimum! With a lot of rope for a jury to swing up on.

    2. Dennis: I would really love to see the accounting for that $9 million. Of course the docket does list 17 attorneys on Intel’s side. . .

      Patent trials can get really expensive, really quickly. It’s a lot like putting together a theatre production except that the investors stand to lose a lot more than their investment. For that reason, there are layers and layers of axx-covering involved. You hire the best trial attorneys and experts (the actors) within your budget, and the rest of the crew (the associates and the paralegals) work day and night to make those people look as awesome as possible.

      No doubt (especially in hindsight) it would be possible to achieve the same result with fewer people (“get rid of those understudies and Bruce can do make-up and costumes by himself, can’t he?”) and fewer costs (“let’s ditch the fireworks scene … too little bang for the buck”). It’s just riskier. But if you can afford to mitigate the risk, why wouldn’t you? Especially where the penalty for failure can be enormous.

      The better question to ask is: how much money did these Texas attorneys make asserting this j nk? Because pretty much anybody with a broad patent and nothing to lose except some time can be a major pr*ck if that’s how to choose to live their lives. That’s pretty darn easy.

  3. This decision has some level of absurdity to it.

    1. Originally sued for infringement under 3 patents, a mere two claims even got so far as trial. What the heck happened? Why is Intel stuck with the costs associated with two patents that couldn’t even get to trial?

    2. The patent owner then didn’t just lose, but really lost: invalidity and non-infringement on the TWO remaining claims. How many cases proceed to trial in the ED of Texas where the claims are both invalid and not infringed. Seems pretty rare.

    3. Stragent didn’t sue Intel in a targetted litigaiton. It sued lots of people: link to dockets.justia.com.

    I’m all for keeping the American rule. But then, let’s do the same thing on the other side for willful infringement: unless it’s exceptional, no treble and no attorney’s fees. Otherwise, patent owners like Stragent have an incentive to exploit exorbidant litigation costs and risk of treble damage to extract nuisance suits without much risk themselves.

    Congratulations patent system, you needlessly cost the system.

    // I’m getting more cynical.

    1. Intel can and should appeal and if the Fed Circuit backs Dyk up then take it to the Supreme Court for another Fed Circuit smackdown.

      Originally sued for infringement under 3 patents, a mere two claims even got so far as trial. What the heck happened? Why is Intel stuck with the costs associated with two patents that couldn’t even get to trial?

      Because Intel spent a lot of money defending itself against a bunch of s c u m ba gs in the banana republic of East Texas. And Intel played nicely which apparently makes them less deserving of an award of attorney fees. Of course none of that makes sense but, hey, the worst thing ever would be for the patent world’s biggest crybabies to pay a little penalty for asserting complete j nk of the lowest order.

      1. Oh yes because everything that has anything to do with a patent or patent application that is of the smelly arts is an outrage.

        Right Milly? Your math is broken. Milly’s Math needs to be readjusted.

        Milly, how do you think you brain/mind isn’t math? You are math.

          1. Uh huh, fun game except your own logic says you are math.

            Milly says that everything that computes is math. Milly computes. Therefore, Milly is Math. And Milly’s Math needs some new equations.

            Please try to stay focused if you decide to respond.

            1. your own logic says you are math

              Hmm. I know that my own logic said it was time for me to eat a yummy sandwich. I must have missed this “you are math” business but maybe I’ve got my stereo turned up too loud.

      2. “Intel can and should appeal and if the Fed Circuit backs Dyk up then take it to the Supreme Court for another Fed Circuit smackdown.”

        Uh the USSC just got done stating it was up to his discretion. And this is definitely not an abuse of discretion.

        1. definitely not an abuse of discretion.

          Seems like an abuse of discretion to me when the Judge declares that (allegedly) “professional” conduct by the winning party “weighs against” a finding of attorney fees in a “certainly weak” case (and that “case” is just the tiny fraction of claims that ended up in trial)?

          Note: §285 fees are awarded with reference to the case “as a whole” and in considering “a totality of the circumstances . . . includ[ing] the conduct of the winning party.”

          The winning party here was “professional” and didn’t waste Dyk’s time with endless filing of motions for sanctions (something it certainly could have done). How did Dyk reward the winner’s conduct here? He didn’t. Instead, he punished the winning party for that conduct. It’s nonsense.

          1. So Dyk was the trial judge and said it didn’t seem extraordinary to him. Please give a real reason other than all patents not of the smelly arts are ev1l.

            Come on Milly try to stay focused here. We know that your math is weak, but try Milly’s Math to come up with at least one reason other than they are ev1l.

      3. Agreed, MM. Although on appeal I might frame the issues a wee bit differently than you have suggested. Your line ” s c u m ba gs in the banana republic of East Texas” certainly catches the eye, but other than that it has little to recommend it for an opening line on an appeal brief.

        The issue I see is that there is no possible legal or logical connection between the decision not to file a motion for SJ and determining whether a case meets the statutory criterion of “exceptional.” The judge has no right to deny statutory damages based on his personal opinion of how the D should have run its case. To conclude that b/c D did not seek SJ means D did not view the case as frivolous, is as bizarre as anything that has come out of EDTX. Fracking fluids must be getting into the water down there.

        Defendants have the right to design their own defense strategy however they see fit. If it doesn’t include a motion for SJ, then that is none of the judge’s business because forgoing SJ is not, so far as I read the statute, anticipated by Congress as a waiver of the right to seek attorneys’ fees. Dyk’s position is absolutely ludicrous. Dyk is just annoyed he had to sit on a jury trial. It’s beneath him.

        If the D recognized from the get-go what a bogus case it was and made the tactical decision to forgo SJ and take it to a jury so they could spank the P with heaps of legal fees, then good on them. They made the right call, IMO. Seems to me that’s why the statue was written — to spank these kinds of litigious idgits.

        Given that only the outcome can determine whether or not a case is exceptional, this one certainly was. What the judge should have done was take evidence on the amount of fees and decide what a reasonable fee award would be in view of the complexity of the issues raised in the complaint, not in view of the D’s defense strategy. At that point perhaps it would be within the purview of the judge’s discretion to limit the fees on the grounds that the case could have been resolved at SJ. But for Dyk to deny the motion for fees altogether seems to me a very valid issue for appeal.

        Dyk was just being lazy and punted the most important part of the case from a precedential POV. Hardly the first time.

        1. Babel Boy: “The judge has no right to deny statutory damages based on his personal opinion of how the D should have run its case.”

          Huh?

          The issue was whether the case was exceptional. Not even filing a SJ motion indicates there were material issues of fact disputed.

          Such cannot be a exceptional case.

          1. The point Ned is that a determination of “exceptional case” does not rest on whether or not the Defense choose the legal tactic of attempting a SJ motion.

            It is perfectly plausible that an exceptional case exists regardless of whether or not the Defense decided to make such a filing.

          2. Ned, ya’ missed my drift.

            What I was trying to say was that the decision not to request SJ does not say squat about how a party views the merits of a case. I know of no statute, no federal or state rule of procedure, and no common law requirement [other than Dyk's] that says: If you think there are material issues in dispute, then you have to file a motion for SJ.

            Not only is there no free-king requirement to file for SJ, no presumptions can be drawn by a court as to why a party did not seek SJ. Dyk’s opinion to the contrary is as helpful as pigeon pooop on the pump-handle in developing this aspect of the AIA.

            I’m willing to wager my last week’s salary (pre-tax) against yours that Dyk will be reversed if the issue is appealed.

            1. Babel, from the big picture point of view, let’s take contract damages for a moment. There is a doctrine that the non breaching party has a duty to act to minimize his damages if at all possible. A breach does not give the injured party carte blanche to maximize damages with the expectation that he will be fully compensated for all voluntary damages he incurs.

              An exceptional case has to mean that, absent litigation misconduct, that there is something definitely wrong either with validity or with infringement. Such cases should be resolved in summary judgment if at all possible in order to minimize the wasting of both the judicial resources and attorneys fees for all parties. Otherwise, the party having an all but slamdunk case can pour it on with the expectation that they can be compensated for all the expenditures they are making that are really unnecessary. They are probably doing it to punish the plaintiff for being the case in the first place, the teach them a lesson that they will never forget, and to also teach others suing this particular company that if you sue me you will be in for a world of hurt regardless of the merits of the case.

        2. Nicely stated Babel.

          If only people would express their opinions and “policy” table pounding as well as this, conversations could avoid the CRP-run away-CRP again cycle.

        3. BB: To conclude that b/c D did not seek SJ means D did not view the case as frivolous, is as bizarre as anything that has come out of EDTX.

          No doubt.

          And what makes Dyk’s opinion doubly ludicrous is that he further punishes the defendants for “minimizing disputes over collateral issues throughout the case.” In other words, the defendant here was damned if it did, and damned if it didn’t. Intel could surely have kicked up a haystorm of “collateral issues” throughout the case, seeking sanctions for all kinds of frivolous assertions made by Stragent. But it didn’t. According to Dyk, that kind of behavior “weight against” finding the case exceptional. And lest we forget: this was a “certainly weak” case in Dyk’s opinion even after the plaintiff dropped many of its undoubtedly frivolous claims that were initially asserted only so a jury could find the remaining j nk both invalid and not infringed!

          Dyk writes: Intel argues that Stragent delayed in disclosing certain positions and in abandoning certain other claims and positions, and that this constituted litigation misconduct. It did not.

          That’s the analysis we get. Do we need to look at the “certainly weak” claims which made it to trial and compare them to the j nk that was asserted initially? Why was that other j nk asserted at all? Was that other j nk also asserted against Intel’s customers? Some money was surely spent convincing Stragent to drop those claims which were asserted for one reason: to force Intel (and its customers who were directly sued) to spend money dealing with them.

          Intel should appeal this mess because Dyk basically just drove a truck through the statute.

      1. Dyk pointed to that too. But, that line of reasoning strikes me as odd too. I get that the he’s trying to make this point: if Intel thought the case was so frivolous, Intel should have at least filed for SJ.

        Let’s assume something: Intel HAD filed for SJ. What then? Filing summary judgment would have entitled it to attorneys’ fees, but not filing it deprives it? Would the outcome of SJ mattered?

        I should look, did the plaintiff file for SJ? If not, the plaintiff pursued a litigation that it new was so bad that it didn’t bother to file for SJ?

        And Dyk’s reasoning came out that it could have avoided trial costs if it had. So is the judge saying it would have granted SJ? But even if you wanted to make the assumption, can I assume it would have been within his discretion to give fees back all the way to SJ?

        1. Listen, the patent is presumed valid. Intel did not have a basis for a SJ motion of non infringement.

          I don’t see any basis whatsever this could be deemed an exceptional case.

      1. Good question (specifically, I do not pass judgment on the merits of any possible answer).

        And such a question should be had by Intel with its counsel.

        Would LOVE to see that answer.

    2. “How many cases proceed to trial in the ED of Texas where the claims are both invalid and not infringed. Seems pretty rare.”

      mmm –

      I saw an EDTX trial with a strong infringement argument, where the jury found the patents both invalid and not infringed. My understanding from talking to the lawyers is that their post-trial discussions with the jury revealed some confusion in that they believed an invalid patent could not, by definition, be infringed.

  4. I wonder how much the $9 million expenditure contributed to Judge Dyk’s finding statement that “Intel did not always view Stragent’s infringement position as frivolous.”

    1. Not sure if that played into the decision at all (but it is an interesting point).

      See the decision itself:

      At this point, Intel has only asked the court to determine Stragent’s liability for fees; it states that, if fees are awarded, it will later file a specific request detailing the amount of its fees. Am. Mot. for Atty’s Fees 3; see Fed. R. Civ. P. 54(d)(2)(C) (“The court may decide issues of liability for fees before receiving submissions on the value of services.”).

    2. I wonder how much the $9 million expenditure contributed to Judge Dyk’s finding statement that “Intel did not always view Stragent’s infringement position as frivolous.”

      Assuming that it did contribute to Judge Dyk’s finding, what on earth is the take-away message from that? “Don’t spend too much money defending yourself or you’ll be blocked from obtaining any award of attorney fees”? That makes zero sense.

  5. More weirdness in Dyk’s opinion:

    Intel also contends that Stragent’s position on the validity of the asserted claims was frivolous. In hindsight, Stragent’s validity argument was certainly not a winning position….

    Pretty sure that was the defendant’s position all along. It was only “hindsight” to the plaintiff.

    counsel for both sides were cooperative in reaching stipulations and minimizing disputes over collateral issues throughout the case. …Such professionalism is to be commended, and it weighs against a finding that an award of attorney’s fees is warranted

    Got that? Playing nice against a plaintiff wielding a j nk patent and avoiding unnecessary disputes weighs AGAINST awarding attorney’s fees to the defendant. What the he l l ?!?!

    Only Stragent’s infringement allegations under claims 12 and 16 of the ’072 patent proceeded to trial.

    Say, Judge Dyk, can you remind everyone what happened to the claims that were originally asserted but were deemed by this hyper aggressive s c u m b a g plaintiff to be unworthy of taking to trial? Were they also merely “weak” and “allegedly frivolous” or were they quite a bit worse than that? I’m guessing it cost some money to convince the plaintiff to withdraw those claims from the case.

      1. somebody take your lunch money?

        Nope. Just pointing out some oddities in Judge Dyk’s opinion. If I was Intel, I’d ignore Dennis’ prediction and take some of this on appeal.

        In particular, the idea that defendant’s who “play nice” with plaintiffs who’s cases are “certainly weak” (if not frivolous) should be punished for “playing nice” is absurd.

        1. Just pointing out some oddities in Judge Dyk’s opinion.
          I don’t think ‘oddity’ means what you think it means. You didn’t identify anything “strange or unusual” about Dyk’s opinion. You just identified things you disagreed with and/or used Dyk’s statements of fact as a platform to your (daily, twice-daily?, thrice-daily?) rant.

          1. You didn’t identify anything “strange or unusual” about Dyk’s opinion.

            That’s your opinion, Slo Mo.

            Try explaining to everyone why defendant’s should be punished for “playing nice” with plaintiffs asserting “certainly weak” cases.

            1. Try explaining to everyone why defendant’s should be punished for “playing nice”
              Easy … plaintiffs were rewarded for playing nice as well. God … can you come up with a harder task than that?

              with plaintiffs asserting “certainly weak” cases
              You should explore the difference between weak and frivolous — perhaps you might learn something. Scratch that, I think “learning” is something outside your capabilities.

    1. Maybe if you keyed on the part in the decision in which the law is discussed, you might not be in such ‘utter disbelief.’

      To wit:

      Third, the mere fact that the losing party made a losing argument is not a relevant consideration; rather, the focus must be on arguments that were frivolous or made in bad faith. See id. at 1753 (fee awards are not to be used “‘as a penalty for failure to win a patent infringement suit’” (quoting Park-In-Theatres, 190 F.2d at 142)). To impose fees on a party simply for making losing arguments would be the same in effect as fully adopting the English Rule, whereby the losing party always pays the winner’s fees.

      Case 6:11-cv-00421-TBD-JDL Document 364 Filed 08/06/14 P 6-7 of 11

      1. Maybe if you keyed on the part in the decision in which the law is discussed, you might not be in such ‘utter disbelief.’

        Or I could “key in” on the parts of the decision that I did, in fact, “key in” on because those were the parts which I found most troubling. And I could clearly indicate those specific parts so everyone can see exactly what I’m referring to.

        See how that works, Billy? Try it sometime.

        Pretty sure that Octane Fitness is the controlling law here, not Park-in-Theatres. Nothing in Octane Fitness suggests that attorney fees can be awarded only for “frivolous” and “bad faith” claims. Do you recall what Octane Fitness was about?

        1. were the parts which I found most troubling

          So decrees the Red Queen / Humpty Dumpty as the law is parsed and critical parts thrown away (to ease Malcolm’s “troublings”)

          Yes, Milly, I see how you work. Here’s hint: that is not how the law works.

          1. how the law works.

            You’re pretty much the last person on earth to be lecturing people on “how the law works,” Billy.

            Let me know if you need me to explain to everyone why that is the case.

            1. lecturing…

              Nice non sequitur, from the guy who does not think that intellectual honesty is required because this is a mere blog….

              Your, um, “explanations” lack all credibility. Let me know if you need me to explain that to you why that is the case.

    2. Got that? Playing nice against a plaintiff wielding a j nk patent and avoiding unnecessary disputes weighs AGAINST awarding attorney’s fees to the defendant. What the he l l ?!?!

      Read the section you quoted again:

      As this court remarked more than once, counsel for both sides were cooperative in reaching stipulations and minimizing disputes over collateral issues throughout the case. …Such professionalism is to be commended, and it weighs against a finding that an award of attorney’s fees is warranted (emphasis added)

      It had nothing to do with punishing the winning defendant for “playing nice.” The point was that the losing plaintiff was cooperative, and that argues against an award of attorney’s fees. Read the paragraph above it, where the judge points out that the plaintiff did not engage in litigation misconduct or bad faith discovery.

      The defendant “never sought discovery sanctions … or even a court ruling limiting the scope of discovery.” Pretty hard to turn around at the end of the case and argue that the plaintiff engaged in such bad faith discovery that an award of attorney’s fees was warranted. And indeed the judge didn’t buy it.

      1. JD: It had nothing to do with punishing the winning defendant for “playing nice.” The point was that the losing plaintiff was cooperative

        Except that’s not “the point” that Judge Dyk made. He didn’t single out the plaintiff’s behavior. He pointed out that both sides were “professional” and that this fact weighed against an award of attorney fees. Note: it didn’t leave the scale unchanged or tilt the scale in favor of awarding fees to the winning party. In Dyk’s mind, it tilted the scale away from awarding attorney’s fees to the winner. Why?

        There are other statutes and rules for dealing with bad, unprofessional behavior by attorneys. That’s not what Octane Fitness was about.

        This was not a “close case” by any stretch of the imagination and that’s not even taking into account the patents and claims that were initially asserted by these “professional” j nk patent wielding s cu m bags.

        Dyk’s opinion seems to suggest that if you expect to be awarded atttorney’s fees when you win a “certainly weak” patent case that the “professional” plaintiffs insisted on pressing forward with (after dropping all the frivolous j nk they first threw at you), then you are better off filing motions for sanctions (wherever such motions are not themselves sanctionable) instead of “playing nice.” Otherwise Dyk will question your veracity and punish you.

        The built-in assumption Dyk is operating under is that those “professionals” in the banana republic who make extraordinary amounts of money asserting this j nk deserve to continue making that living. Because, hey, they agreed to drop those incredibly cr ppy claims they first threw at you … after you spent tons of money dealing with that incredible cr p. Nice racket.

        Much more of this and maybe we’ll see Dyk taking one of those “Rader vacations” from the bench.

      2. JD The defendant “never sought discovery sanctions

        Perhaps the defendant was trying to be “professional” and not raise unnecessary disputes in the expectation that when it won this “certainly weak” case it would recover some of its attorney fees.

        Instead, the defendant was punished.

        1. punished….

          Because he did not get exceptional fees when he did not deserve them, he is “punished”

          Now that is a weak argument.

          1. ecause he did not get exceptional fees when he did not deserve them, he is “punished”

            Now that is a weak argument.

            Indeed, Billy. Unfortunately for you, that’s your argument, not mine.

            I don’t expect you to be able to understand that, of course, given your long-recognized difficulties with the English language.

      3. the losing plaintiff was cooperative, and that argues against an award of attorney’s fees.

        Pressing a “certainly weak” case — with the claims both invalid and non-infringed — all the way through trial is “cooperative”?

        Only in the bizarro world of our broken patent system.

        1. Try reading the entire case Malcolm, not just the parts you parse that make you feel warm and fuzzy. Include the parts directly on point that defeat your rant.

          Have a nice day.

  6. Given the track record of patents dragged back to PTAB for IPR’s and such, that would seem to be the venue of choice for the accused infringer, instead of District Court litigation.

    Will these big attorneys fees bills continue in the future, now that accused infringers can run to the PTO for another look at the patent and try to kill it?

    1. The big fees are now going to the attorneys that are doing the IPRs in our registration system.

        1. Not true either, since almost all IPRs are in response to litigation, and when successful greatly reduce litigation costs.

              1. So Milly (MM), I think you should not be upset at being called math. After all under your logic, you are nothing but math.

                Right Milly? Milly’s Math (MM). If it is me interpreting Milly’s math, I’d say there are a few equations that need to be corrected.

      1. Good IPR’s are not cheap, but vastly cheaper and faster than patent litigation for defendants. But they are also very limited, only to 102 or 103 issues based only on issued patents and publications. [But these are the very issues for which it is very difficult for defendants to get S.J.]

        1. But, Paul, this is just starting. With a survival rate of only about 1/3 for claims, the IPR fees may go way up. This is evolving.

          I hope everyone can see how this has turned into a registration system. You register your patent (get some examination), then when you want to assert it you have to pay $500K ++++ or it gets invalidated.

          That is a registration system.

          1. That is a registration system.

            Not quite – we still get to pay for the examiner-albatross BILLION dollar innovator tax sham system, while a true registration system could be (highly efficiently) run for a fraction of that BILLION dollar annual cost to the innovators who are the source of all money the Office spends.

            1. Anon, it is close when you consider $20K to register and $500K to assert BEFORE going to the dist. court.

              So, register ($20K), get examined ($500k), assert in a litigation ($1,000,000+).

              Cold facts.

              By the way, Ned and MM how does your math (mind/brain) process the above?

              1. NWPA,

                I am not disagreeing with you – but merely pointing out that if we were to go to an actual registration system, we could eliminate more than BILLION dollars that innovators right now pay into the USPTO and the examiners who would rather be doing something else anyway.

              2. True enough anon. There are some great pressures on the system right now with the IPRs burning down most patents.

                I guess no one has figured out that that means the PTO isn’t doing its job.

            2. You know consider if TSM were still alive and well. Then in the IPR, the attorneys would be competing with the examiners for finding TSM in the references. It would lead to the examiners getting better and better. The IPRs would be providing good feedback.

              Instead what do we have? A ’cause game. No one respects the results of the board. No one thinks that any ’cause argument is anything but a ’cause argument. So, some f**’ing judge thinks its no good ’cause. No one cares.

            3. “Not quite – we still get to pay for the examiner-albatross BILLION dollar innovator tax sham system”

              That’s the price you pay to keep the junkiest of the junk and most easily found and subsequently invalidated “inventions” out of the system.

              1. No, it is not. That’s the price we pay to have the examination system that we have.

                You too (especially) should be careful about your complaining, as heaven forbid you needed to actually work in the private sector.

              2. “That’s the price we pay to have the examination system that we have.”

                Yeah that’s what keeps the junkiest of the junk and most easily found out re re.

                “You too (especially) should be careful about your complaining, as heaven forbid you needed to actually work in the private sector.”

                Oh yes, I’m shaking in my boots at the prospect of doing less work (at least if I went and did eng). Oh my god, plz to be saving me!

          2. It is certainly evolving. More and more law firms want to get into IPRs, and are competing on fees [not increasing fees] to do so, especially with the IPR correlation tp decreasing litigation fees. Unfortunately the most qualified attorneys are often some of the few real interference litigation experts, not pure D.C. litigation attorneys, since from the get-go the PTAB made it clear that IPRs will be run to a considerable extent the way prior art related motions are handled in interferences. Including evidence by declarations and live depositions only for cross-examinations, etc. Thus, expert consultations are advisable.
            At the present rate it looks to me like approximately 1/3 of all new patent suits will be recieving responsive IPRs?

        2. Paul, you seem to be a motormouth for the infringer lobby, as I have never seen you post in the last several years anything that reflects the concerns of patent owners with respect to what has been going on with respect to the AIA and with respect to IPRs and the like.

          IPRs do to following: they reduce the requirements of proof from clear and convincing to preponderance, claim construction from “consistent with the specification” to broadest reasonable, and further deny patent owners a right to have the validity of their patent determined by jury in an Article III court, which are both constitutional rights that are denied.

          The benefit to the infringer is your sole concern.

          That the patent office might be issuing large numbers of very bad patents is a concern best addressed by the Federal Circuit and by the patent office itself. The unfortunate dicta in Alappat and the travesty of State Street Bank have led to the issuing of hundreds of thousands of business method patents or computer implemented patents that never should have been issued. Given the Alice case, most these patents should be amenable to summary judgment at this point in time.

          But we should not destroy the patent system to deal with these problematic patents.

          1. And, might I add, that not having any requirement for standing to file reexaminations or IPRs allows any big company to simply crush any small company at will.

  7. Looks like seeking a DJ is going to be the default to avoid the “must have taken it seriously” category along with the associated implied level of veracity in the assertion made by the patent owner. I can imagine a jury being persuaded that since DJ was not sought there must have been some merit to the charges. Yikes!

  8. “[An exceptional case] is simply one that stands out from others with respect to the substantive strength of a party’s litigating position.”

    Another clear cut and trivial to apply maxim from the Court. They bestow these crystalline gems on us precisely to avoid churning litigation fees. Because they’re smart and kind and totally awesome.

  9. The next time you guys hear about the mythical examiner that doesn’t check IDS’s know this: I just gifted some ta rd $500 in lost production time (at least) to reopen his patent to help him get it right ivo newly submitted art. With still more to be required at this point.

    And there are some people that wonder why those mythical examiners exist.

      1. The post is not intended to make you think I’m a great humanist or care deeply for humanity. It is to highlight why there is a huge financial disincentive to even check IDS’s in the first place. Do even two of those a year, you’re looking at being down a grand.

            1. (1) It’s my understanding that SPEs can make adjustments to examiners’ production hour metrics for tasks like this. If your SPE isn’t, then you can make the case to your art unit director.

              (2) Your lost time here is undoubtedly compensated by production hours that didn’t require the predicted amount of your time to earn.

              In many of my cases that hit a final rejection, the examiner refuses to consider or allow after-final amendments, as they “raise new issues of patentability that require a new search” – and yet, when I present those exact same amendments with an RCE, the examiner allows them without batting an eye. I know exactly what’s happening here: the examiner has just earned a disposal – which the USPTO expects to take somewhere between 15 and 20 hours – and the examiner only spent maybe thirty seconds considering the claim amendments, and ten minutes writing up the notice of allowance.

              I don’t think the USPTO is oblivious to these games. Rather, I think that production metrics are expected to be a mean average… possibly with a very large statistical deviation, but a mean average nonetheless.

              But what this means, 6, is that when you are spending time one one case for which you don’t get credit, you are not “gifting” the applicant out of your own pocket. Rather, the “gift” is from some other applicant paid a full fee for work that took a fraction of the projected time.

              1. This was already known NWPA – I think Prof. Crouch even had a thread dedicated to how little actual, um, “consideration” is given to the items of an IDS.

                Of course, one should understand that by “consideration,” the actual bar of the examiner pouring through any list of supplied references (from any source – not just applicants and their supplied IDS) is rather low (and may be met, for example, by the mere perusal of the title). “I read the list” may become equivalent to “I considered the list.”

              2. SPEs do not grant extra time for considering IDSs. An examiner can complain to the director all they want. All they’ll get is a director and a SPE who are both annoyed with them.

                Maybe examiners actually need to conduct a significant amount of searching to know that something is allowable. Isn’t that ultimately the point of paying for examination? I don’t see the problem.

              3. “It’s my understanding that SPEs can make adjustments to examiners’ production hour metrics for tasks like this. If your SPE isn’t, then you can make the case to your art unit director.”

                I’ve never heard such a thing. This is one of the things on POPA’s radar at this very moment specifically what you just said is not the case.

                “(2) Your lost time here is undoubtedly compensated by production hours that didn’t require the predicted amount of your time to earn.”

                That’s a big ol’ lol!

                “I know exactly what’s happening here: the examiner has just earned a disposal”

                And you should also know that you also got him to look it over again, something to which you were not entitled.

                “and the examiner only spent maybe thirty seconds considering the claim amendments, and ten minutes writing up the notice of allowance.”

                The time it takes varies. Though 30 seconds is usually on the low side.

                “I don’t think the USPTO is oblivious to these games.”

                It is hardly a game.

                “Rather, I think that production metrics are expected to be a mean average…”

                Of course it is.

                What you don’t seem to be hearing, because you, and some others are apparently deaf (or blind as the case may be) is that there is a profound DISINCENTIVE to checking the IDS at all when doing so may lead to reopening. No matter how much the “mean time expected” is, or what have you, or how many counts I currently have, it doesn’t matter. I could otherwise be “gaming” the system, if you want to put it that way, or simply just getting by, but in each case I have a large financial DISINCENTIVE to check it (in either time, money or counts which are effectively time and money). And that is solely my point here today. Not that the count system isn’t based on avgs or means or whatever or anything else.

                I’m not sure why this is so hard for you guys to understand. Maybe you’re just bad at accounting or econ.

                “But what this means, 6, is that when you are spending time one one case for which you don’t get credit, you are not “gifting” the applicant out of your own pocket. ”

                Actually that isn’t what it means.

                What you don’t seem to get is that I could just as dam well open the IDS, click 5 buttons, save, attach to a printer rush, save, post and be done. Or, I could spend an hour looking at the IDS refs (minimum in many cases) and then spend a day hard at work (not to mention where I don’t get any credit, set that to the side). Regardless of your subjective feelings about what all that abstract nonsense “means”, that is what it “means” irl.

                And it is a gift. Every single fking time. Because the count system treats it as such. And whether or not you want to “call it one” or not. And none of yours or anyone else’s abstract theorizing is going to change that.

              4. “Rather, the “gift” is from some other applicant paid a full fee for work that took a fraction of the projected time.”

                I hear what you’re saying, but not really. Because that applicant did not “give” me any counts. The “fees” paid do not equate to “paying” the examiner due to how we’re paid. In counts.

              5. “All of that may be true, but I think 6 just told us how about 90 percent of examiners think about IDSs.”

                Exactly. At least the ones that would result in reopening. The other ones we won’t get into.

              6. And it is a gift. Every single fking time. Because the count system treats it as such.

                LOL – way to prove my point 6 that you are part of the problem.

                Such the lemming.

        1. You are a unionized federal employee. You are not “down a ground”. You are never “down a grand”. Whom do you think you are kidding?

          1. “You are a unionized federal employee.”

            Ahhh yes, because opportunity costs do not count to federal employees! They’re above the capitalistic nonsense that goes on for other people who care about “money”. It’s all good in the socialist paradise that is unionized federal employment! In fact, excellent!

            You guys are either st upi d as fck or bad at econ. Perhaps both.

    1. So, you mean you agreed to look at new art after allowance and then let him make claim amendments without an RCE?

      1. “So, you mean you agreed to look at new art after allowance and then let him make claim amendments without an RCE?”

        What do you mean “let” him make amendments? It’s an after allowance IDS. They get “free” reopening of pros if a ref anticipates/obviouses etc. He gets a “free” nonfinal, along with amendments and everything else that goes along with a nonfinal/reopen. As far as I’ve heard anyway. Who knows? Maybe I can make that final since it is a second action and this is based on an IDS. We’ll see. But I’m pretty sure not.

        In any event, I’ve started on the supar ez app that David thinks that the other guy just stole some time from. So I guess I’ll just let the IDS guy steal some time from this guy. I’ll just cut him off at 5 hrs search. Who cares if the search is even nearly done? Right?

        Right David?

        It’s all just a “mean”. The next guy doesn’t need his full search time or for me to really read his spec. Pshaw! None of that matters! Just let the other guy steal a couple hours np. And of course don’t account for any of this in the production system. Let’s just have a bad accounting setup. So that people like the IG won’t know his ar se from his elbow when he looks at what is going on from the outside.

  10. Dennis,

    I know of an NPE that was charged, a few years ago, $10m by a big firm BEFORE SUMMARY JUDGMENT (the firm lost, too!). It’s nuts.

    1. Yeah, high a big firm used to working for big co. and one gets litigation run amok.

      Small companies need to hire small firms to handle patent litigation. They can get a case done for a fraction, a very small fraction, of what one would be charged by a big firm.

      Litigation costs began to get out of hand when big general practice firms got into patent litigation. These guys KNOW how to milk a case for all its worth.

    1. Otherwise known as “math.”

      “Applied math,” actually, that typically exploits characteristics of the original video capture hardware and physical limitations on humans’ ability to perceive characteristics of video images presented on display screens. There’s nothing abstract about video compression technology, at least as a gen_eral matter.

        1. How is that statutory?
          Hmmm …. “Whoever invents or discovers any new and useful process … may obtain a patent therefor.” I just looked at the patent and it looks like its recites process claims. Do you need anymore help?

            1. walking malpractice case
              So charming …

              BTW … I’m still getting applications like the one above allowed ALL THE TIME.

              As a double BTW … those particular claims would easily sail through even the USPTO’s new guidelines regarding 35 USC 101 and Alice.

              I hope you are not counseling your clients consistent with your comments here … if so, you may consider talking to your malpractice carrier about raising your coverage.

              1. I hope you are not counseling your clients consistent with your comments here … if so, you may consider talking to your malpractice carrier about raising your coverage.

                LOL – careful there Oh no, you have identified (yet another) of Malcolm’s short script replies: Accuse Others Of That Which Malcolm Does

              2. I’m still getting applications like the one above allowed ALL THE TIME

                Sooper awesome cr p of the lowest order requiring zero technical competence in the relevant field. Yup. Sounds like something you’d excel at, Slo Mo.

                I hope you are not counseling your clients consistent with your comments here

                You”re the ign 0ramus who just suggested that if a method is a “process” then it’s per se eligible subject matter. That proposition is absolutely false, of course. Let me know if you need that explained to you in more detail.

              3. Billy, I don’t think Slo Mo needs your “help.”

                But since you seem to have trouble reading, here’s Slo Mo’s 101 analysis: I just looked at the patent and it looks like its recites process claims. Do you need anymore help?

                I didn’t “misrepresent” anything, Billy. You did. Again.

                Get your meds adjusted, Billy.

              4. The misrepresentation continues as you leave out this was a discourse with Ned and used the term “statutory” which Ned has used as shorthand for statutory category of 101.

                Try to keep up to speed. You won’t have to taste your shoe leather so much.

              5. You”re the ign 0ramus who just suggested that if a method is a “process” then it’s per se eligible subject matter.
                Did I say anything about “per se” eligible? Oh wait, I didn’t. Nice of you get the facts wrong (yet again).

                Perhaps you don’t get the law regarding 35 USC 101 — actually I’m sure you don’t. A process is one of the explicitly-described categories of statutory subject matter. You do realize what “laws of nature, physical phenomena, and abstract ideas.” They are exceptions to the categories listed in 35 USC 101. Thus, if you recite a process, it is by default within one of the statutory categories. It is up to somebody else to establish that the claim falls within one of the exceptions.

                Getting back to Ned’s question of “How is that statutory?” I answered that the claims were directed to a process and a process is part of 35 USC 101. Pretty simple, huh? Ned’s question did not raise that the claims were encompassed by one of the exceptions to 35 USC 101. As such, I correctly answered the question that was asked.

                This English language thing is a bit tricky for you, isn’t it?
                I wouldn’t ascribe incompetence to MM when plain, old deliberate misrepresentation is the more likely explanation.

              6. Slo Mo: A process is one of the explicitly-described categories of statutory subject matter.

                Oh, so a mental process is eligible, right? Because … process.

                Is that what you tell your clients?

                How about a diagnostic process comprising an old data gathering step and a step of thinking about what the data means? That’s a process … so eligible, right? According to your theory? Is that what you tell your clients?

                if you recite a process, it is by default within one of the statutory categories. It is up to somebody else to establish that the claim falls within one of the exceptions.

                LOL. And apparently that “someone else” is never you. Too funny.

                Ned’s question did not raise that the claims were encompassed by one of the exceptions to 35 USC 101. As such, I correctly answered the question that was asked.

                Try to believe it, folks. One of your patent t e a b a g g e r s hard at work doing his lawyerly best to convince himself that he didn’t shoot himself in the face.

              7. OH No, “allowed all the time.”

                I hope you have claims that recited both physical inputs and physical outputs in addition to claims that only recite math and then stop.

                See, e.g., Parker v. Flook.

              8. Is that what you tell your clients?
                My clients don’t have inventions in “mental processes” so I have never had that conversation. Then again, perhaps you can point to be the section of 35 USC that requires “non-mental processes”? I would be very appreciative in case I ever have the conversation.

                That’s a process … so eligible, right? According to your theory
                I see your reading comprehension is on the wane again. I don’t have a “theory.” I’m working with the text of the statute — perhaps you should try it sometime. Ned was talking about the claims here — not Mayo v. Prometheus (I thought that was pretty self-evident).

                hard at work doing his lawyerly best to convince himself.
                I don’t have to do any convincing. Convincing is needed when somebody is in doubt — I have no doubt about my interpretation of the law, which is consistent with how it is being practiced by the USPTO (both before and after CLS Bank).

                Perhaps you need to relook at your positions. Going into the CLS bank decision, the claims you thought were going to be disallowed (and the claims that I thought were going to be acceptable) based upon that decision are still acceptable today. It is you who is attempting to convince yourself that CLS Bank is more expansive than what it really is.

              9. I hope you have …
                Sorry Ned … you are just about one of the last people I would take advice from regarding patent law. Your “view” of patent law rarely comports with the law, as it is currently being applied.

                I like to practice the law — as it is today — not as you (or MM) want the law to be.

            2. Oh no, from my recollection of the positions you take, you seem to think that Judge Rich’s view of patent law is correct.

              Only, Judge Rich’s view are routinely legislatively overturned or overturned every time the reach the Supreme Court.

              The only thing I can think of that Rich came up with that has been sustained on appeal is that being alive does not disqualify subject matter from patent eligibility — that and the proposition stated in Diehr, and I will quote from Application of Diehr:

              “A claim drawn to a process or method does not depend for its validity under 35 U.S.C. § 101 on whether a computer is involved. If the claim is drawn to subject matter, which is otherwise statutory, it does not become nonstatutory merely because a computer is involved in its execution. ”

              But the idea that every claim that recites a programmed computer is eligible is eligible under 101 because a machine is eligible is plainly and simply wrong. But it is consistent with his view of nominalism. Rich was of the view that all differences between the claimed subject matter and the prior art had to be analyzed under 103 for obviousness regardless of whether those differences were statutory.

              Literally, crazy.

          1. Oh No, mathematical processes are non statutory per Benson.

            Now if the claim were tied to real physical signals, in and out, I think we approach the statutory.

            1. mathematical processes are non statutory per Benson
              I suggest you re-read the case and focus on how SCOTUS limits the scope of their decision to certain facts.

              As an aside, the claims here do not recite a specific mathematical process so you appear to be barking up the wrong tree.

              1. I’m sorry, Oh No, but are you suggesting that if a claim dealing entirely with data processing has an if/then decision in its matrix that it is not mathematical?

        2. did nothing but…

          I love the way you tea bag gers try to minimize the inventions you don’t like with abstractions.

          Just a gang of intellectual dishonest thieves.

          And, Ned, so your mind/brain is just maths, right?

          And, Ned, would you say that a new wire that simply reduced signal noise by one half “just reduced signal noise”?

            1. Milly’s Math (MM), the claim is junk? You don’t care what the spec says? You don’t read claims in view of the specification? Maybe that is one reason your math Milly is always so upset.

              1. He’s not trying to “resurrect” anything, he is merely informing you (since you seem to want to leave out this material point of law) that claims are to be read by a person having ordinary skill in the art to which the invention pertains, having been informed by the specification.

                A little thing called “context”….

              2. claims are to be read by a person having ordinary skill in the art to which the invention pertains,

                Thanks, Billy, for continuing to dig. We know it’s what you do best!

                So tell everyone, Billy: what’s in this imaginary spec that rescues your li’l buddy’s j nk claim?

    2. So, MM does that mean that your mind is math?

      I can tell you under your logic the answer is yes.

    3. You realize that this is a patent for a HARDWARE based encoder, right? It’s actually a layout of physical components (gates) on a piece of silicon. You’re ruining your software/hardware distinction; best to stop now.

      1. LOL – shhhhh it’s fun to watch that anti-software patent folk self FAIL when they act in accord with the fact that software is equivalent to firmware and is equivalent to hardware.

      2. It’s actually a layout of physical components (gates) on a piece of silicon.

        Well, if you recite the novel, non-obvious “layout” in your claim in objective structural terms then you might have a valid enforceable patent.

        [shrugs]

  11. Here’s the ga rbage asserted in this case by this serial offender patent tr 0ll:

    1. A video compression method comprising:

    compressing a segment of an input signal using an initial quality setting;

    calculating a data rate for an output signal that would result from adding the compressed segment to the output signal; and

    in response to the calculated data rate exceeding a target rate, recompressing the segment using an automatically-selected quality setting that produces a lower data rate than the calculated data rate when the recompressed segment is added to the output signal.

    Got that? Sooper dooper technical stuff, folks. It’s a method for compressing something comprising (1) compressing a part of it using a compression method, (2) determining if that method will work for your purposes and (3) if it doesn’t, use some other method.

    When will the courts and the PTO pull their heads out of their arses and realize that this functionally-claimed b. s. is rotting the patent system to its core? This tr 0ll and the btttm-feeding s c um ba g attorneys who represent it need to be sanctioned, and hard.

    Of course, we might see some more crying on the stand if that happened. LOLOLOL!

    1. MM,

      May I suggest that all software is non statutory, but that the use of computers to do something new might define a new or improved process.

      The claim here operates on an input signal, but it does not produce or require any output signal. After input, it is all data processing, 100%. Such cannot define a statutory process.

      The problem here is not functional claiming, but claiming non statutory subject matter.

      1. The claim here operates on an input signal, but it does not produce or require any output signal. After input, it is all data processing, 100%.
        Ummmm … data processing (i.e., the recompressing) creates an output signal.

        Such cannot define a statutory process.
        So says you. Too bad neither the Federal Circuit nor SCOTUS agrees with you. You do remember that phrase in Benson that Anon likes to remind you of?

        1. Oh No, Alappat approved of a claim that calculated digitally – but it also linked its output to a larger machine.

          I can think of NO CASE that approved of only calculations without more. Flook is a case in point.

          1. So, Ned, is your mind math? According to your logic and the Church-Turing Thesis the answer is yes.

            So, think!, about that.

            1. So, Night, show me the case where the improved human mind was patented?

              Assume such a patent, what are the remedies? Royalties for use of the mind? What if they don’t pay?

          2. I can think of NO CASE that approved of only calculations without more. Flook is a case in point.
            Now remind me again, where is it 35 USC that the result of calculations have to outputted?

            BTW — a calculation necessarily involves an output.

            1. where is it 35 USC that the result of calculations have to outputted?

              Where does 35 USC say that calculations are eligible subject matter?

              a calculation necessarily involves an output

              Depends on how you define “output”. If a computer performs a calculation but doesn’t display the result to a person or communicate it to any other machine, is there an “ouput”? That doesn’t sound like “applied math” to me. Sounds more like the performance of a calculation, period.

              1. Where does 35 USC say that calculations are eligible subject matter?
                I already reproduced that language above, but let me help you out again: “Whoever invents or discovers any new and useful process … may obtain a patent therefor.” Calculations involve a process.

                That doesn’t sound like “applied math” to me.
                That does not surprise me in the least. If ‘applied math’ came up and bit you in the ass you would probably smile and think that was a nice side effect of whatever drug you were on.

              2. Slo Mo: “Whoever invents or discovers any new and useful process … may obtain a patent therefor.” Calculations involve a process.

                So a calculation is eligible for patenting because they involve “a process”?

                I can patent a claim to “a calculation, wherein said calculation comprises taking one number and then multiplying it by 10.243599 and substracting 3.29 from the result”? Is that what you tell your clients?

                If not, what do you tell them?

              3. LOL – closer attention? Like 6 Nah brosef’ing you? or DanH/Leopold coming a close second in noting to you that there is a difference between math and applied math?

                You mean attention like that?

                /Malcolm self FAIL mode in full gear

    2. When will the courts and the PTO pull their heads out of their arses and realize that this functionally-claimed b. s. is rotting the patent system to its core? This tr 0ll and the btttm-feeding s c um ba g attorneys who represent it need to be sanctioned, and hard.
      There, there … did somebody take your binky, winky? Can we find you another pacifier to suck on?

  12. Here are some relevant and unbiased-source patent suit average defense costs from the AIPLA , for year 2011:
    $1M-$25M at risk = total cost $2.5M. $25M+ at risk = $5M total cost ($3M just to get through discovery.)

    1. Paul, just from personal experience, I never had even one case that approached the lower end of the AIPLA range. I suspect that is because the damages asked were always well into the hundreds of millions.

      1. Agreed, millions can easily be spent by defendants on compling with required discovery, investigation of non-infringement, prior art and various invalidity defenses, experts, and other matters before even getting to a first meeting with a judge.

        1. And that’s why judges within current law framework do poor job.

          Restructuring case so that LEAST expensive task are done first change nothing for suers (they know they will win, right? otherwise thats “frivolous” case?), and bring risk down for defendants.

          And it matter only in cases where defendants think that they can pull case down (for what ever reason).

          That would also save costs for court (human resources, and others).

          So why its not default?

          1. przemo_li,

            Without touching on the merits of your question, do you realize that if you succeed in obtaining your desired goal, that there will be more (much, much, much, much more) NOT less patent lawsuits?

            I see that people have not yet decided to grasp the bigger picture.

  13. Dyk: There is little injustice in forcing Intel to bear its own attorney’s fees for defending a claim it did not challenge on summary judgment. Disposing of a frivolous claim on summary judgment would avoid a trial and have the effect of saving both parties a substantial portion of their litigation costs.

    Had Intel brought a motion for Summary Judgment it would be in a better position to argue for attorney fees (at least from Dyk’s perspective). But it doesn’t seem fair to require defendants to spend additional money (lots of it) to move for Summary Judgment if the defendants believe that the motion is likely to fail. That belief can be reasonably held right alongside the belief that the defendant will ultimately prevail in the case.

    A weak case is a weak case. Complete denial of attorney’s fees under these circumstances just encourages more weak cases to be asserted. Why not force the plaintiff in a weak case to offset at least part of the defendant’s fees?

    1. ” But it doesn’t seem fair to require defendants to spend additional money (lots of it) to move for Summary Judgment if the defendants believe that the motion is likely to fail.”

      If it is likely to fail then what justification is there for providing attorney fees in the first place?

      “A weak case is a weak case. Complete denial of attorney’s fees under these circumstances just encourages more weak cases to be asserted.”

      I think all can agree on that, but he isn’t outright barring fees under those circumstances, he’s simply requiring more than just that. In his personal discretion in this particular case.

      “Why not force the plaintiff in a weak case to offset at least part of the defendant’s fees?”

      That would seem an odd remedy. Either the case was exceptional or not. It can’t be half-exceptional I don’t think.

      1. “Why not force the plaintiff in a weak case to offset at least part of the defendant’s fees?”

        That would seem an odd remedy. Either the case was exceptional or not.

        There’s nothing “odd” about the remedy of awarding partial attorney fees. Obviously you have to find the case to be “exceptional” first. I think Dyk could easily have found this case to be exceptional. He just chose not to.

        If [summary judgment] is likely to fail then what justification is there for providing attorney fees in the first place?

        The justification is that the plaintiff’s case was “certainly a weak one.” That’s the point of the statute: to force plaintiff’s to pause and think really hard about whether they want to bring a weak case and risk paying the defendant’s attorney fees.

        1. “That’s the point of the statute: to force plaintiff’s to pause and think really hard about whether they want to bring a weak case and risk paying the defendant’s attorney fees.”

          Yeah idk about that brosef. The statute says something other than weak, if they wanted to say weak then they could have. Though it may be a good purpose for us to amend the statute to.

          1. The statute says something other than weak

            Right. It says “exceptional.” And the Supreme Court told us in Octane that this refers “simply [to a case] 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)”.

            See that word “strength”? What’s the other side of the coin?

            Thanks for playing.

            1. I’ll grant you that, but does this one “stand out” from the others, or is it simply weak?

              I’m not sure that all weak cases necessarily “stand out” MM. They’re just weak.

  14. the Supreme Court also recognized that exceptional case awards should be “rare” and “uncommon.”

    That assumption makes sense only if one assumes that the assertion of invalid or ineligible patents is “rare” and “uncommon”.

    Is that a reasonable assumption? I don’t think so.

    When the Supreme Court refers to cases that “stand out from others”, are they referring to other patent cases, or to litigated cases ge nerally? What percent of litigated cases end with the statute under which the litigation is brought being thrown out of the books because there was no rational basis for the statute?

  15. Dennis wrap your mind around the greatest racket in real dollars in the history of mankind. To get to summary judgment alone is a million dollars. Small businesses that have patents asserted against them are often destroyed, regardless of the merits. Its a sick system, almost everyone recognizes it, but what can be done about it? Octane Fitness is a good start, but there has to be a way to get some kind of fast preliminary assessment by a judge on the merits. That’s why 101 has been stretched like a pretzel- because it can happen early.

      1. LOL – that point was made to Marty long ago.

        I wonder if he ever discussed with his attorney, and if he did, I wonder what her response was.

    1. Small businesses that have patents asserted against them are often destroyed, regardless of the merits.
      You should then be able to rattle off a good 10-20 names of small companies that were destroyed. Let us know when you have those names.

      Regardless, we all know that you are exaggerating. If a company is really small, why would they even bother to defend? The cost of a taking a license would likely only be a couple percentage points of their revenue. Also, why spend $2M to defend a lawsuit that, at best, could the other side could ask for maybe $100K. If you truly are a small company, you won’t have the revenues to justify a higher damages number.

      1. If a company is really small, why would they even bother to defend? The cost of a taking a license would likely only be a couple percentage points of their revenue.

        Once again, the true beliefs of the patent t e a b a g g ers always leak out.

        Thanks, Slo Mo.

        Too funny.

        1. Once again, the true beliefs of the patent t e a b a g g ers always leak out.
          Leak out? You say that like it was some great secret — it isn’t. Fighting a lawsuit (NO MATTER WHAT KIND) is a business decision.

          Let me clue you into something as well, anybody can get sued for just about anything. The merits of any lawsuit are just one point of the calculus in making a business decision pertaining to that lawsuit.

          The main point of my post (which you ignored) is that small companies (with small revenues) shouldn’t be spending big $ to fight a patent case because the damages that could be reasonably asked for are tied to those revenues. As such, Martin’s allegation that “[s]mall businesses that have patents asserted against them are often destroyed” is just a bunch of hooey.

          You think fighting a lawsuit that shouldn’t have been filed in the first place is unfair? That’s nice — put it on the pile of a thousand other things that business owners think are unfair. As an attorney, when faced with one of these “unfair” situations, you can either advise your client to make a wise business decision or you can wail and scream like a baby about unfairness of it all. I prefer the former … I see you prefer the latter.

          1. That’s why for software patents “Vendor/Developer/Owner” can take over the case, WOULD BE solution.

            Simple.

            Cheap.

            Less work for attorneys, less wiggle room for PAEs… Wont happen ;)

          2. You think fighting a lawsuit that shouldn’t have been filed in the first place is unfair? That’s nice

            LOLOLOLOLOLOL.

            Keep the hits coming, Slo Mo.

            The patent t e a b a g g e r s just can’t help themselves. You guys really are your own worst enemies because you’re so wrapped up in your weird0 beliefs you’ve lost the ability to empathize with the vast majority of normal people who look at you and immediately think: s c u m b ag.

            1. you’ve lost the ability to empathize with the vast majority of normal people who look at you and immediately think: s c u m b ag.

              When the law fails you, you can always turn to the mob opinion to obtain justice…

              /face palm

      2. If a company is really small, why would they even bother to defend? The cost of a taking a license would likely only be a couple percentage points of their revenue. Also, why spend $2M to defend a lawsuit that, at best, could the other side could ask for maybe $100K. If you truly are a small company, you won’t have the revenues to justify a higher damages number.

        Yes, I think you have accurately described the patent troll business model.

        And just how many “percentage points of their revenue” do you think the typical small business can afford to fork over before it becomes unprofitable?

        1. “And just how many “percentage points of their revenue” do you think the typical small business can afford to fork over before it becomes unprofitable?”

          Why should that matter Dan? Don’t you know that the economy at large exists to serve Inventors?

        2. DanH, and do you realized that the “troll” model of which you speak was invented by big companies that we all know about that see patents as a profit centers?

          Do you care to name a few of the biggest trolls?

          It is amazing that Obama’s first director came from a company that uses patents primarily for making money.

          If approaching potential licensees only because they are in particular businesses and then demanding protection money is not legitimate, I would suggest that the government ought to investigate these companies for systematically abusing the patent system.

          They might want to contact Mr. Snyder about the problem.

          1. It is amazing that Obama’s first director came from a company that uses patents primarily for making money.
            Heaven forbid … a company that acquires property “for making money.” How totally un-communistic of them. What will these companies think of next? Doing crazy things like maximizing shareholder wealth?

            I need to stop … these radical concepts involving “making money” are making me flustered.

            1. “a company that acquires property “for making money.””

              Sounds a lot like rent-seeking to me. Heaven may not forbid it, but after a fashion humans may after economists get through trashing it.

            2. OH No, there are legitimate and illegitimate ways of making money from patents.

              One way is the troll way — where the big co. with stacks of patents to the roof, and a litigation budget that would sink a battleship if it was loaded aboard, approaches small co. with a deal: give us a million and we will look the other way.

              Mobs do the same thing. It is the way of the troll.

        3. And just how many “percentage points of their revenue” do you think the typical small business can afford to fork over before it becomes unprofitable?
          I see you, like MM before you, fail to appreciate my main point which is that Martin’s allegation that “[s]mall businesses that have patents asserted against them are often destroyed” is just a bunch of hooey.

          Any small business that is destroyed by a patent lawsuit is destroyed more because they had dumb lawyers — not because they were sued.

        1. Oh No, you do know that there are big companies that operate a lot like the mob? They sell protection.
          Not quite. The protection being sold by the mob is protection from the mob. Also, what the mob is protecting you from is violence, which is itself illegal.

          If you are getting sued for patent infringement, then you might be doing something wrong for which you need protection.

          1. OH No, you have no fricken clue how big co. operates, do you?

            IMHO, there is little difference between a mob shakedown and what happens in the real world with these folks.

            1. OH No, you have no fricken clue how big co. operates, do you?
              Perhaps your company shouldn’t be infringing big co.’s patents? Did you ever think of that solution?

              1. You know, Oh No, that the issue of actually infringement of specific patents is rarely discussed by big. co.?

                We were approached by a big. co. one time, and the demand was high. I responded by simply saying that doing business in a particular space was not enough for me to recommend taking out a protection policy. I asked them to show me at least one patent, any patent, that we actually infringed.

                They did not come back.

              2. They did not come back.
                Assuming that what you say is true (for you, a hard assumption to make), then good for you and your client.

                However, what would you do if they came back with claim charts for 20 patents and said that they believe that the following list of 350 patents were likely infringed but they were going to hold off doing the claim charts on those? What do you do then? Perhaps you could defeat 10 of the 20 … maybe even 15 of the 20 if the wind is at your back and the jury likes your client. In the end, if you are practicing business in the space of one of the mega corporations that has tens of thousand of patents you are extremely likely infringing something they own. In this instance, you need to make a business decision.

                To restate my point … anybody who fights a patent lawsuit and whose company is destroyed because of the fight has made an unwise business decision.

      3. “Regardless, we all know that you are exaggerating” so sure of yourself, yet so wrong…

        Look up a company called Sendouts LLC, which IMHO, was destroyed by Kenexa (now IBM) v. Hireability et al

        No license has been offered, and proposed settlement ranges have been in the range of almost everything we have ever earned, for a completely non-core component that nobody even noticed go away when we removed it.

        I can rattle off what I know about from this obscene case.

        The rest of the profanity I leave to you and your fellow Patent Tea Baggers….to relate. If IBM manages to destroy us, it will make two, if not three, from this case alone, because HireAbility is tiny too. How many others are out there?

    2. Beware of what you ask for.

      What you are really seeking is lower court fees.

      Once that happens, there will be many more (not less) court cases.
      Many many more.
      You tend to forget that cost is borne on both sides.

  16. Although I’d love to see Octane Fitness be vigorously adopted by district courts, I can’t help but agree with Judge Dyk based on what I can gather from this case in the opinion.

    1. It does make me wonder whether going to trial was a strategic decision on Intel’s part to crush this particular plaintiff financially. Is the plaintiff not appealing because they suspect they’ll lose again, or because they ran out of money at trial?

      1. It does make me wonder whether going to trial was a strategic decision on Intel’s part to crush this particular plaintiff financially.

        Going to trial makes patent litigation vastly more expensive for everybody.

        If the plaintiff was actually concerned about being “crushed” financially, the plaintiff had only to exercise one very obvious and very simple option.

        1. If the plaintiff was actually concerned about being “crushed” financially, the plaintiff had only to exercise one very obvious and very simple option.
          Dedicate their patents to the public and leave the “sport of kings” to kings?

          Shame on them for trying to take on one of the big boys without adequate financial resources. We all know that he who has the $$ gets the justice. Isn’t that the system you want?

            1. You want to defend the sh it that was asserted in this case
              I’m not a litigator and I don’t know the facts, so I cannot comment. However, I do notice that you are not a litigator and you don’t know the facts, and that didn’t stop you. Then again, you never let an absence of facts get in the way of you sharing your opinion.

              1. No … it is more that MM thinks that his “sexual innuendo” comments are witty and he is scoring putdown points — typical of a teenager (or the maturity of one)

              2. Step 1: Switch meds
                Step 2: Re-think position
                Step 3: Express the position persuasively (whatever it is) with conviction, clarity, integrity, and a dab of decorum.

              3. Anon2,

                Noble – but fruitless suggestions.

                I had adovcated for such long, long long ago. But until “the other side” plays nice, responding in kind appears to be the only language they understand.

  17. “(By trial, the case had been narrowed to only be challenging two claims found in one of the patents.) I would really love to see the accounting for that $9 million. ”

    That accounting (or some digest of it) would indeed be very interesting.

  18. “The ordinary rule in American law is that each side pays its own attorney fees. For a successful defendant such as Intel here, the outcome of the case is likely still a six-figure payout to its defense team. ”

    I may have misunderstood what you meant here, but in any patent case that makes it to trial, isn’t it more likely a seven-figure payout in legal fees?

      1. I continue to have trouble wrapping my head around why the average patent case is so expensive to litigate whereas other complex lawsuits are often at least an order-of-magnitude cheaper (six figures instead of seven).

          1. My guess is it is the standard economic consequences be it pain or gain (weighted by probability/risk of all outcomes) and the size (ability) of the player to throw the amount of money at the problem which makes business sense. Presumably the more resources you throw at any problem the more likely you can find a solution or reduce the risks of failure.

            Multiply the original risks by the possible outcomes and you should be able to determine for a set risk reduction what expenditure of resources will be worth it.

            Just a guess but clients spend money on lawyers because they gain value from the expenditure, and for multibillion dollar companies/products/patents it makes sense.

          2. Dennis, these are state court cases, not D.C. cases, and presumably many are “small potatoes” cases without enough at stake to justify large legal time expenditures.

            1. Also a vastly different class of ‘expert’ involved in those cases. Experts add 100-200.

              So 1-3mil depending on what’s going on is probably normal. 9mil? Intel has been had. But that’s what they wanted, so I’m glad they set that precedent on what a patent trial should cost.

          1. It should be obvious, Dennis, that major corporations defending a case are willing to spend lavishly because they can afford to do so, and because they all almost always want to maximize the litigation expense to the patent owner in order to force settlement.

            Think about it this way by analogy to war. If one attacks Panama, one can expect to win in hours. If, however, one declares war on a major power, the matter will be contested vigorously regardless of the merits of the cause.

            Britain may have been in the right in declaring war on Germany in both WWI and in WWII, but they should have known and probably did know that it was beyond their capacity to win the war alone in both cases. From the get go in both wars, Britain began looking for allies, particularly the United States.

            Think back to the Napoleonic wars. Britain never could have defeated France one-on-one. But bring in Russia, a guerrilla war in Spain, and Prussia, and the combination eventually proved too much even for Napoleon.

            From my own experience as a patent counsel at a major company who was often sued for infringement, Intel got off lightly in this case. Inside counsel may be bean counters in some cases, but in most cases they actively urge litigation counsel to pile it on for the reasons stated.

            Also, consider that the size of the budget one has also determines the grade level one should be at inside a corporation. Both patent and general counsel have a personal interest in expanding their budgets and in not losing any litigation, but particularly not patent cases where the damages demanded often dwarf the litigation expense.

        1. I do scratch my head about the 9 mio – particularly with no MSJ (although perhaps Intel did prepare such but not file). But in general I get where the average case with considerable money at stake is more like 3 million (going on memory from an AIPLA survey a couple of years ago). Shoot, I seriously doubt you could get a good mock jury from a consultant for less than six figures. And if you have 100 mio on the line, you’re going to run a 3-panel mock.

          Think of it like a complex product liability case (defense of which can easily go over 1 mio) in terms of the numbers of defendant employees who will be deposed and the sheer amount of defendant documents that must be produced. Anything or anyone soup to nuts (er, product early development through and after launch) is a target.

          Similar numbers of experts – or more – retained. For just one accused product, you might have one professor about aspect A of the product, one about aspect B, others for aspects C, D, E ….

          Now add to that the mini-trial aspects. Markman on 50 claims (not the case above) can take a lot of resources. Ditto the spend trying to invalidate 50 claims (again, not this case, but some). Lots of MIL practice, especially as plaintiffs try to get around or expand the limitations of the Markman ruling.

          Some judges won’t do the Markman until after MSJ, which can send those average costs up. You and your infringement experts and validity experts spend a lot more time on MSJ when you don’t know what the claims mean yet.

          Ditto the judges who don’t want to bifurcate, and make you try invalidity, infringement and damages all at the same time. That shoves average cost up.

        2. I continue to have trouble wrapping my head around why the average patent case is so expensive to litigate
          A couple reasons (to start) …

          Damage experts are freak’n expensive. I’ve seen budgets just for costs (i.e., not attorney fees) well exceed $1,000,000, which a big chunk just going to the experts.

          Also, unlike most complex litigations, you aren’t asking for a piece of the pie, which is essentially what you are asking for with damages.

          The damages for a big patent litigation (before possibly being tripled) can easily be nine figures. You just don’t see those kind of numbers in many other litigations. Where the stakes are high, the parties involved are not going to be afraid to spend big $ on their attorneys.

        3. One problem is you basically get no truly useful information on patent cases until the expert report. Parties spend way more on discovery, motions and other matters that wouldn’t have been had defendant known little was at stake.

      2. Thanks. I tried to give a more complete reply, but must have written something your software didn’t like. I did thoughtlessly use the words, “In ge_n_e_ral” without the spacing….

        1. What in goodness sakes is wrong with words having g_e_n in them? or is it g_e_n_e in it? In either case it makes no sense to me.

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