Quick resolution and deterrence are not sufficient to enhance a lodestar calculated fee award

Lumen View Technology, LLC v. Findthebest.com, Inc., Nos. 2015-1275, 2015-1325 (Fed. Cir. Jan. 22, 2016)

The court found the plaintiff’s patent invalid under 35 U.S.C. § 101 (Section 101) and awarded the defendant fees under 35 U.S.C. § 285 as an “exceptional case.” On appeal, the Federal Circuit affirmed the court’s exceptional case finding, but reversed and remanded its fee calculation.  

The court found Section 101 invalidity on the pleadings before discovery began. The plaintiff, however, submitted pre-discovery infringement contentions before the invalidity ruling. In its infringement contentions, the plaintiff argued that the defendant’s product practiced the infringing method by using preference data of “two or more” parties, as the patent required. In finding an exceptional case, the court noted that “the most basic” pre-suit investigation would have shown that the defendant’s product only used the preference data of “one party.” The court also found that the plaintiff filed the suit to extract a nuisance settlement and that such a “predatory strategy” needed to be deterred. The Federal Circuit ruled that the court did not abuse its discretion and affirmed.  

The Federal Circuit, however, did not agree with the court’s fee calculation. The court used the lodestar method and doubled its fee award because of the quick resolution of the case, coupled with motivation to deter the plaintiff’s “predatory” litigation tactics. The Federal Circuit rejected the court’s reasons for the multiplier, holding that because quick resolution and deterrence are not related to the suitability of compensation of the defendant’s attorneys, they cannot be used to enhance the lodestar amount.

A copy of the opinion can be found here