South Florida Court Awards Bona Law Client LensDiscounters.com Attorneys' Fees Against Patent Troll
Patent trolls often attack small- and medium-sized businesses engaged in e-commerce in the hopes of obtaining a nuisance settlement payment because they know that patent lawsuits are expensive to litigate. Unfortunately, they do it because they are often successful: they register broad, vague patents that look like they are valid, but which only describe generic processes that nearly all businesses use.
As described in the litigation, Bona Law client LensDiscounters.com was attacked by notorious patent troll Shipping & Transit LLC, which holds a number of different patents that purport to do something all businesses use: package delivery tracking. LensDiscounters.com, one of the nation’s leading online contact lens discounters, relies on shipping all of its product: its customers purchase their contacts online and they are shipped right to their door. Although LensDiscounters.com does not provide its own tracking, it does provide its customers with the tracking provided by the shipping carriers.
As this case and others have demonstrated, LensDiscounters.com’s business model allows it to provide the lowest price contacts available because of its low overhead. But Shipping & Transit put that model in jeopardy when it threatened LensDiscounters.com with a lawsuit and demanded a $45,000 “license fee” to settle its claims, just as it had done to hundreds of victims before. LensDiscounters.com refused to be another of this patent troll’s victims and hired Bona Law to defend it. Eventually, Shipping & Transit filed its lawsuit in the Southern District of Florida.
Shipping & Transit likely realized that its strategy was doomed when Bona Law attorneys Jarod Bona and Aaron Gott, along with Geoff Cahen of Cahen Law, P.A. in Boca Raton, Florida as local counsel, aggressively defended LensDiscounters.com. The plaintiff responded, as it had in other cases, by filing a unilateral covenant not to sue and sought to voluntarily dismiss its case within three months of filing its complaint.
Thereafter, LensDiscounters.com filed a motion for attorneys’ fees under 35 U.S.C. 285, which allows a prevailing party in a patent case to recover its reasonable attorneys’ fees in “exceptional cases.” Under U.S. Supreme Court precedent, a case is exceptional where it “stands out from others [in] the substantive strength of the party’s litigating position . . . or the unreasonable manner in which the case was litigated.” Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1755 (2014). LensDiscounters.com argued that this case concerned both problems: the patents are invalid and Shipping & Transit’s litigation conduct was unreasonable.
The court referred the motion to the magistrate judge, which on July 11, 2017 recommended the district judge grant the motion for attorneys’ fees. The court did not rule on the substantive patent issues because the case had not progressed far enough to rule on them—Shipping & Transit cut and ran just after the pleadings had closed. Instead, the court ruled that Shipping & Transit’s history of litigation conduct, the number of suits it filed, the lack of any substantive merits decision in any such case, the manner in which contested cases were quickly dismissed, and the holes in Shipping & Transits attempts to manufacture reasonable explanations for its conduct, all militated in favor of a finding that Shipping & Transit’s case was exceptional.
The court also found that all of LensDiscounters.com’s requested fees were reasonable and recommended a full award of attorneys’ fees expended by LensDiscounters.com in the case. The order will go into effect if adopted by the district judge after a 14-day objection period.
Update: On August 10, 2017, the district judge adopted the Magistrate's Report and Recommendation, expressly finding that the Magistrate's recommendations were "well reasoned and correct."
This is a positive result for our client, but the law, facts, and decisionmakers are unique to each matter. So results may vary depending upon the circumstances.
We are reporting this result because we know that there are many innocent businesses that suffer financially and otherwise from frivolous lawsuits over intellectual property with dubious merit. And it is important that these businesses understand that there are options available to them if they want to fight back. Of course, a positive result in one case is no guarantee or even an indication that there will be a positive result in another case.
If you have been sued for patent infringement and believe that the lawsuit is unjust, you are welcome to contact us discuss your options.