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AdjustaCam, LLC v. Newegg, Inc.

Court’s Failure to Recognize That Markman Order Rendered Prosecution of Case Baseless Leads to Reversal on Fee Denial

AdjustaCam, LLC v. Newegg, Inc., (Fed. Cir. July 5, 2017) (REYNA, Mayer, Hughes) (E.D. Tex.: Gilstrap) (3 of 5 stars)

Fed Cir reverses denial of motion for § 285 attorneys’ fees. The district court abused its discretion in two respects. First, it failed to follow the instructions of a previous remand (which had come following Octane Fitness, 134 S. Ct. 1749 (2014)), which had instructed the district court to evaluate the full merits of Newegg’s motion. The district court’s re-adoption of its previous findings was inconsistent with the remand order. That the matter had been assigned to a new judge following retirement of the trial judge did not excuse the failure to reevaluate the record. University of Utah, 851 F.3d 1317 (Fed. Cir. 2017), did not bar the Fed Cir from reversing because in this case there was “no evidence that the district court properly weighed the issues.” Op. at 12. Second, the district court clearly erred in its assessment of the substantive strength of AdjustaCam’s case. The opinion describes how the court’s Markman order rendered AdjustaCam’s case baseless, and criticizes the district court for relying, in its non-exceptionality determination, on an argument AdjustaCam had not actually made. Further, the opinion describes how AdjustaCam’s use of “after-the-fact declarations” to excuse its behavior was unreasonable per Octane Fitness.

KEYWORDS: ATTORNEY FEES; SECTION 285