Judge Andrews issued an interesting opinion today denying a requested $9 million attorneys' fee award in Acceleration Bay LLC v. Take-Two Interactive Software, C.A. No. 16-455-RGA (D. Del.).
There were a number of facts in defendant's favor, but not quite enough to get over the bar for fees under § 285. The one that most caught my eye was that the Court had previously expressed concerns about counsel's candor—a rare thing for the Court in the District of Delaware to do:
Defendants argue that the impropriety of Plaintiff's litigation conduct-including the lack of candor, forcing relitigation of lost issues, and the pattern of inappropriate conduct in previous cases-further proves that this case was exceptional. . . . Regarding the lack of candor, I stated in an earlier Order in a related case that I was "concerned that Plaintiff's national counsel cannot be relied upon for 'candor to the tribunal'" based on incidents that occurred during discovery and claim construction. . . . . I do not agree, however, that this proves that this case was exceptional.
It looks like the defendants didn't have much to go on to allege lack of candor beyond the Court's prior conclusion, however (or at least little that made it to the opinion). Instead they seemingly focused on other courts' findings against counsel for plaintiff in other jurisdictions for other clients:
Regarding Plaintiff's pattern of misconduct, Defendants reference multiple instances where courts have reprimanded Plaintiff's attorneys for inappropriate conduct [while representing other clients]. (Id at 14-15 (citing Freshub, Inc. v. Amazon.com Inc., No. 6:21-cv-00511-ADA, 2021 WL 5987106, at *6 (W.D. Tex. Dec. 17, 2021) (pending appeal in Fed. Cir. Case No. 22-1425) ("[A] bitter losing party's difficulty in explaining its loss is never a proper basis for counsel to invoke baseless allegations ofracism and anti-Semitism to request a new trial. Such vitriolic and unsubstantiated allegations are not only shocking, but also offensive to this Court. . . . By making such baseless allegations, Freshub's counsel has breached their duty to the Court." ); Finjan, Inc. v. Juniper Networks, Inc., No. 3:17-cv-05659-WHA, 2021 WL 3140716, at *4 (N.D. Cal. July 26, 2021) (pending appeal in Fed. Cir. Case No. 21-2253) ("In no way does this order vindicate [certain Acceleration Bay attorneys, acting on behalf of a different client]. Their conduct was improper and frustrated the fairness of the proceedings. Judges in the future should take this into account when dealing with them in future cases."); Midwest Athletics & Sports All. LLC v. Ricoh USA, Inc., No. 2:19cv-00514-JDW, 2021 WL 1907475, at *6 (E.D. Pa. May 12, 2021) (pending appeal in Fed. Cir. Case No. 21-2340) ("No court likes to say that a party acted in bad faith, but the Court questions how MASA and its attorneys could have thought that such conduct fell within expected standards of practice.") (cleaned up))). While the need for deterrence must be considered in deciding whether a case is exceptional, I do not believe these attorneys' misconduct in unrelated cases (which seems worse than what I saw) described in opinions issued well after the final judgment in this case should too heavily cloud my consideration of whether the present case was exceptional. What I said previously about the conduct in this case (D.I. 422) stands, . . . and it is Defendants' strongest single argument for an exceptional case determination, but I nevertheless do not think it had a significant impact on the proceedings in this case. Thus, the conduct, while regrettable, does not in my opinion justify a finding that the case is exceptional.
This is notable. I've seen § 285 motions where the Court discusses the parties' conduct in other cases. I can't recall any other ones where the moving party focused on the opposing attorneys' actions in unrelated cases for unrelated clients, though.
It's particularly interesting because the defendants sought § 285 fees from the plaintiff, not from its attorneys. The relevance of the attorneys' actions in other cases for unrelated clients seems awfully attenuated.
The Court also rejected the idea that the plaintiff's case was exceptionally weak or that they relied on "falsified evidence." It declined to grant fees under § 285:
In sum, I agree with Defendants that there are multiple instances where Plaintiffs counsel could and in some instances should have litigated this case differently, and I understand Defendants' frustration. Yet, I do not believe the totality of these instances proves that this case was exceptional.
Finally, the Court also (unsurprisingly) rejected the idea that it should award fees under its inherent authority, after declining to award them under § 285:
Defendants argue, "Alternatively, the Court should award Defendants their fees and costs under its inherent power." . . . For the same reasons described above regarding 35 U.S.C. § 285, I do not find that Plaintiff's counsel has "(1) multiplied proceedings; (2) unreasonably and vexatiously; (3) thereby increasing the cost of the proceedings; (4) with bad faith or with intentional misconduct." . . . I also note that it would be a rare case where there could be a basis for an inherent power sanction when there was an insufficient basis for a § 285 finding.
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