In Oplus Tech v. Vizio, the Federal Circuit remanded with an order for the district court to expressly determine whether an award of attorney fees are warranted. After the merits were determined (summary judgment of non-infringement) the district court found the case “exceptional” under 35 U.S.C. 285 based upon litigation misconduct by Oplus. However, the district court then refused to award fees to the victorious accused (without fully articulating its reasons for the denial). On appeal, the Federal Circuit reviewed the record and could not “find a basis to support the court’s refusal to award fees.”
Although the “exceptional case” finding can still be a distinct step from a fee award. The case here suggests that a court should ordinarily award fees in exceptional cases.
Although the award of fees is clearly within the discretion of the district court, when, as here, a court finds litigation misconduct and that a case is exceptional, the court must articulate the reasons for its fee [denial] decision. In light of the court’s fact findings regarding the extent of harassing, unprofessional, and vexatious litigation, the change in legal standard by the Supreme Court, and the lack of sufficient basis to deny fees under § 285, we vacate and remand for the district court to consider whether and the extent to which fees are warranted. Because the court premised its decision regarding fees under § 1927 and its inherent power at least in part on its decision to deny fees under § 285, we vacate those rulings and remand for further proceedings.
Thus, on remand, the district court will reconsider whether fee award is appropriate based upon its prior determination of litigation misconduct.
The particular misconduct here that went unchallenged on appeal:
The court found that from the start Oplus “delayed the litigation by strategically amending its claims to manufacture venue,” and, in doing so, “flouted the standards of appropriate conduct and professional behavior.” It found that “Oplus provided only the most tenuous basis in its initial complaint for bringing suit in Illinois” and that its “first amended complaint took its first step over the boundaries of professionalism” because the “amendment rendered its allegations against Sears prima facie inadequate.” It chastised Oplus for “ignor[ing] well-settled law” by asking “the [Panel on Multidistrict Litigation] to return the case to Illinois after it lost” the motion to transfer to the Central District of California.
The court found that “Oplus misused the discovery process to harass Vizio by ignoring necessary discovery, flouting its own obligations, and repeatedly attempting to obtain damages information to which it was not entitled.” It found that Oplus implemented an “abusive discovery strategy” that involved “avoid[ing] its own litigation and discovery obligations while forcing its opponent to provide as much information as possible about Vizio’s products, sales, and finances.” The court noted that its “greatest concern . . . was Oplus’s counsel’s subpoena for documents counsel had accessed under a prior protective order.” In that instance, counsel for Oplus represented an unrelated patentee in a prior litigation against Vizio and, pursuant to the protective order in that prior litigation, retained copies of documents produced by Vizio. Here, counsel for Oplus, Niro, Haller & Niro, drafted what it called a tailored subpoena for documents retained by counsel for the earlier plaintiff, which also happened to be Niro, Haller & Niro. The court concluded that it “strain[ed] credulity” to believe that Oplus “issued the subpoena without using any knowledge by three attorneys [that both worked on the earlier case and the present case] as to the content of the discovery sought.” The court found that “Oplus blatantly misinterpreted its own prior discovery requests in an attempt to obtain the same information the Court had previously refused to compel.”
The court found that “Oplus used improper litigation tactics including presenting contradictory expert evidence and infringement contentions as well as misrepresenting legal and factual support.” It found that Oplus’s response to Vizio’s complaint about contradictory expert opinions—where Oplus disavowed “its own expert’s statement when Vizio cited the paragraph, rather than the paragraph heading” of its expert’s report—was “merely one example of Oplus’s strategic manipulation of the facts and evidence provided to the Court.” In another example, it noted that whereas “Oplus’s infringement contentions cite[d] a patent to show infringement” of Oplus’s patents, its “expert testifie[d] that the same patent did not disclose the methods of Oplus’s patents.” It found that “Oplus consistently twisted the Court’s instructions and decisions” and attempted “to mislead the Court.” It complained that when “Oplus had no evidence of infringement of one element of a claim, it simply ignored that element and argued another.” It found that “Oplus regularly cited to exhibits that failed to support the propositions for which they were cited” and that “Oplus’s malleable expert testimony and infringement contentions left Vizio in a frustrating game of Whac-A-Mole throughout the litigation.”
The district court particularly highlighted the activities of four lawyers from Niro, Haller & Niro: Gabriel Opatken, Raymond Niro, Arthur Gasey, and Paul Gibbons. [District Court 285 Denial][Patently-O Discussion]. The story told to the district court was that Opatken was a fresh new attorney handling most of the case but who was insufficiently supervised. Once put on notice of the misconduct Ray Niro put a stop to those activities. I suspect that the district court felt that internal reprimand was sufficient.