Oplus Techs., Ltd. v. Vizio, Inc.

Addressing the issue of attorneys’ fees, the U.S. Court of Appeals for the Federal Circuit vacated and remanded a district court’s denial of fees, finding that it “cannot find a basis to support the court’s refusal to award fees” where plaintiff’s blatant litigation misconduct caused defendant to incur additional fees, and instructing the district court to reconsider its ruling in light of the Supreme Court of the United States’ Octane Fitness decision. Oplus Techs., Ltd. v. Vizio, Inc., Case No. 14-1297 (Fed. Cir., Apr. 10, 2015) (Moore, J.)

Plaintiff Oplus sued defendant Vizio for patent infringement. After Vizio eventually obtained a summary judgment of non-infringement, it moved to recover its attorneys’ and expert witness fees. The district court found that Oplus engaged in a variety of litigation misconduct, including ignoring necessary discovery, attempting to obtain damages information to which it was not entitled, presenting contradictory expert evidence and infringement contentions, and misrepresenting legal and factual support for its positions. However, the “greatest concern” noted by the district court was Oplus’s counsel’s subpoena for documents that counsel had accessed under a protective order in an unrelated litigation against Vizio. Based on this misconduct, the district court found the case exceptional under § 285 and found that Oplus and its counsel were vexatious litigants who had engaged in litigation misconduct. Nevertheless, the district court denied Vizio’s motion for fees, reasoning that both sides contributed to delays, that “each instance of motion practice occurred according to normal litigation practice,” and that Vizio would not have incurred significantly more attorneys’ or expert fees in the absence of Oplus’s vexation conduct.

In vacating and remanding the district court’s decision, the Federal Circuit noted that the district court applied the old Brooks Furniturestandard for attorneys’ fees (requiring clear and convincing evidence that a case was exceptional), which has since been replaced by the Supreme Court’s Octane Fitness standard. Under the lower Octane Fitness standard, the district court is only required to determine whether the case stands out from others with respect to the substantive strength of a party’s litigating position or the unreasonable manner in which the case was litigated (IP Update, Vol. 17, No. 5).

As to the merits of the district court’s opinion, the Federal Circuit found that nothing in that opinion or in the record substantiated the court’s decision not to award fees. Specifically, the court found that plaintiff Oplus’s conduct would certainly have caused Vizio to incur additional fees, because “[t]he discovery abuses, unprofessionalism, and changing litigation positions described by the court had to have increased expense and frustration for all concerned.” The Federal Circuit further clarified that, although the decision to award fees lies squarely within the discretion of the district court, once “a court finds litigation misconduct and that a case is exceptional, the court must articulate the reasons for its fee decision.”