Relying on Irrelevant Factors to Award Attorneys’ Fees Is a Red Flag

REALTIME ADAPTIVE STREAMING LLC v. SLING TV, LLC

Before Moore, Lourie, and Albright.  Appeal from the United States District Court for the District of Colorado.

Summary: Awarding attorneys’ fees may be an abuse of discretion if the court relies on factors that should be given no weight in the exceptional-case analysis.

In a patent infringement action brought by plaintiff Realtime Adaptive Streaming LLC against defendants DISH and related Sling entities (collectively “DISH”), the district court granted DISH’s motion for summary judgment, finding the plaintiff’s asserted claims invalid under Section 101. The district court then granted DISH’s motion for attorneys’ fees. In its fee award decision, the district court discussed six “red flags” that the plaintiff should have heeded rather than continuing to litigate. The court found that the plaintiff’s pursuit of the case despite these “red flags” rendered the case exceptional under Section 285. Plaintiff appealed.

The Federal Circuit held that the district court abused its discretion in finding the case exceptional. Specifically, the Federal Circuit found that five of the district court’s six “red flags” should not have been given weight. The Federal Circuit held that two district court decisions finding claims ineligible that were “essentially the same in substance” as the asserted claims were relevant to the exceptional case determination.  However, the Court found that the remaining five “red flags” were not relevant.  The irrelevant red flags included Patent Office determinations that related claims were anticipated or obvious; a notice letter from DISH warning the plaintiff that its patent claims were invalid; and the invalidity analysis of DISH’s expert. Because the district court relied on all six “red flags” in its analysis, the Federal Circuit vacated the district court’s fee award and remanded the case for further consideration.

Editor: Sean Murray