A Delaware court has denied defendant’s motion for attorneys’ fees under 35 U.S.C. § 285 following summary judgment of invalidity on all of the asserted claims. Plaintiff EON Corp. IP Holdings sued FLO TV and others on U.S. Patent No. 5,663,757 relating to a television program communication network. Following a Markman hearing, the court found eight computer-implemented, means-plus-function terms in the ’757 patent claims indefinite and later granted summary judgment of invalidity. FLO TV moved for a finding of an exceptional case and attorneys’ fees. Evaluating the motion under the Supreme Court’s recent Highmark decision, the court found that neither the substantive strength of EON’s position nor the manner in which it had litigated the case warranted a finding of an exceptional case. The court noted that, even though it eventually agreed with the defendants on indefiniteness, the decision was not an easy one, requiring a supplemental evidentiary hearing and supplemental briefing; nor was the court convinced by FLO TV's argument that EON should have either dropped the case or entered into a settlement earlier, given that any potential recovery from FLO TV would be dwarfed by the costs of litigation. The court noted that it had bifurcated liability and damages in the case, and FLO TV's arguments about potential recovery were merely speculative. Moreover, the court found that EON was allowed to pursue a de minimis infringement claim. “It cannot be the case that a plaintiff may be subjected to monetary sanctions for failing to drop a case against a defendant if the cost of litigation exceeds the potential recovery,” the court wrote. Given that there was no evidence in the record of a settlement offer from FLO TV, the court concluded that this was not a case where a party’s approach to settlement was so unreasonable as to justify finding of an exceptional case.

EON Corp. IP Holdings LLC v. FLO TV Inc., No. 1-10-cv-00812 (D. Del. May 27, 2014) [Andrews, J.]