The U.S. Court of Appeals for the Federal Circuit (CAFC) recently made a significant ruling in the case involving Sling TV and DISH Networks (DISH), requiring a redo of the analysis for awarding attorney’s fees. Judge Alan Albright, sitting by designation, authored the opinion, which overturned a Colorado district court’s decision to grant DISH’s motion for Realtime Adaptive Streaming, LLC to pay its attorney’s fees.
The underlying lawsuit stemmed from Realtime’s 2017 patent infringement claim against DISH, alleging violations of its digital data compression patents. The district court deemed the case exceptional, leading to the award of attorney’s fees to DISH. However, the CAFC found errors in the district court’s judgment and highlighted several issues that required a reevaluation.
One key aspect of the CAFC’s opinion was the consideration of various factors as “red flags” indicating exceptionality. The court pointed out that while certain elements, such as previous patent infringement cases involving Realtime and decisions by the CAFC and the Patent Trial and Appeal Board (PTAB), could be deemed red flags, others were not sufficient to warrant the award of attorney’s fees.
For example, the CAFC questioned the relevance of two inter partes review (IPR) decisions and non-final office actions during a reexamination process. The court noted that these findings did not conclusively establish the lack of merit in Realtime’s claims and therefore should not have been used as red flags in determining exceptionality.
Additionally, the CAFC scrutinized a letter sent by DISH’s counsel to Realtime, urging the latter to drop its infringement claims. While the district court considered this letter a red flag, the CAFC emphasized that mere notice of potential litigation expenses and the possibility of attorney’s fees should not automatically trigger the award of fees. The court highlighted that sending such notice letters at the early stages of litigation could become a common practice if they were deemed sufficient for invoking Section 285.
Moreover, the CAFC found fault with the district court’s reliance on DISH’s expert witness opinions as red flags justifying exceptionality. The court emphasized that the presence of opposing expert opinions is typical in patent infringement cases and does not necessarily indicate exceptionality. Realtime’s consideration of DISH’s expert opinions, even if countered by its own expert, did not warrant the award of attorney’s fees.
In light of these findings, the CAFC vacated the district court’s decision and remanded the case for further consideration. The court did not provide a definitive opinion on the correct disposition of DISH’s attorney’s fees motion but outlined the shortcomings in the previous analysis that needed to be addressed.
Overall, the CAFC’s ruling in the DISH case underscores the importance of a thorough and accurate assessment of red flags indicating exceptionality in awarding attorney’s fees. The decision sets a precedent for future cases involving similar considerations and highlights the need for a nuanced approach in determining the appropriateness of fee awards in patent litigation disputes.
