Bed Bath and Beyond Wins Nearly $1 Million in Attorneys’ Fees for Defending Meritless Claims

Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., No. 2016-2442, 2017 (Fed. Cir. Dec. 8, 2017) (Before Wallach, Chen, and Stoll, J.) (Opinion for the court, Chen, J.)

The Federal Circuit affirmed an award of attorneys’ fees in the lower court because “following the Alice decision, IH’s claims were objectively without merit.”  Alice issued two months after the filing of suit.

At issue was a patent directed to purchasing goods at a local point-of-sale system from a remote seller, implemented using conventional computer technology. The defendant in the underlying litigation, Bed Bath and Beyond (“BBB”), filed a motion for judgment on the pleadings after the plaintiff, Inventor Holdings (“IH”), submitted its proposed claim construction. BBB argued that the patent at issue was directed to the abstract idea of “paying for a remote purchase at a local retailer” and that the claims did not “include any meaningful limitations that would ensure they amount to ‘significantly more’ than just the ineligible abstract idea.”  The district court granted BBB’s motion under 35 USC Section 101. The Federal Circuit affirmed.

BBB moved for an award of attorney fees under Section 285. The district court ruled that after Alice the suit was objectively without merit. The district court awarded fees incurred post-Alice, including during the appeal of the Section 101 decision.

The Federal Circuit affirmed the district court’s reasoning that, post-Alice, the case was exceptionally weak and that there was a “need to deter future ‘wasteful litigation’ on similarly weak arguments.”  The Court found the patent at issue was “manifestly directed to an abstract idea” as a “fundamental business practice that, when implemented using generic computer technology, is not patent eligible under Alice.”  The Court rejected IH’s arguments that post-Alice it was reasonable to believe the patent covered eligible material because of the district court’s pre-Alice denial of other defendant’s Section 101 motions directed at the same patent and that Section 101 “was, and is, an evolving area of law.”

Plaintiffs may be on the hook for attorneys’ fees even during appeal of a dispositive issue after a change in controlling law because it is the plaintiff’s “responsibility to reassess its claim in view of new controlling law.” 

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Robert Schaffer

Robert Schaffer is an intellectual property partner at Troutman Sanders. Bob applies more than 30 years of experience to IP counseling and litigation. His work includes patent procurement, strategic planning and transactional advice, due diligence investigations, district court patent cases, and Federal Circuit appeals. He regularly handles complex and high-profile domestic and international patent portfolios, intellectual property agreements and licensing, IP evaluations for collaborations, mergers, and acquisitions. In disputed court cases Bob’s work includes representing and counseling client in ANDA litigations, complex patent infringement cases and appeals, and multidistrict and international cases. In disputed Patent Office matters his work includes representing and counseling clients in interferences, reexaminations, reissues, post-grant proceedings, and in European Oppositions. For more information and to contact Bob please visit his profile page at the Troutman Sanders website.

Robert Schaffer

Joseph Robinson has over 20 years of experience in all aspects of intellectual property law. He focuses his practice in the pharmaceutical, life sciences, biotechnology, and medical device fields. His practice encompasses litigation, including Hatch-Waxman litigation; licensing; counseling; due diligence; and patent and trademark prosecution. He has served as litigation counsel in a variety of patent and trademark disputes in many different jurisdictions, and has also served as appellate counsel before the Court of Appeals for the Federal Circuit. Joe also focuses on complex inter partes matters before the U.S Patent and Trademark Office, inventorship disputes, reexaminations and reissues. His experience includes numerous interferences, a particular advantage in new U.S. Patent and Trademark Office post-grant proceedings. He also counsels on patent–related U.S. Food and Drug Administration issues, including citizen petitions, Orange Book listing, and trademark issues. For more information and to contact Joe please visit his profile page at the Troutman Sanders website.

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Discuss this

There are currently 5 Comments comments.

  1. Anon December 18, 2017 9:39 am

    Wow.

    Given that the Supreme Court’s own writings run into self-collision, the view of “objectively meritless” runs right over the other notions of law (presumption of validity and a different party’s right to at least attempt to differentiate from the “new law” as written by the Supreme Court).

    Put it this way: this signifies that the Court HAS abrogated the separation of powers by writing a new 101, as opposed to being merely an “interpretation” of existing law.

    Of course, applying even the tiniest of critical thinking to what the Supreme Court has done with 101 reveals several unsound items (including Void for Vagueness).

  2. John M. Rogitz December 18, 2017 10:06 am

    This summary omits one of the most useful pieces of dicta re abstract ideas to come out in a while: “Like the claims at issue in Mortgage Grader, the ’582 patent’s claims are directed to an “economic arrangement” implemented using “generic computer technology.” These issues were significant, IF NOT DETERMINATIVE, of the Court’s holding in Alice.”

  3. angry dude December 18, 2017 2:10 pm

    Lovely

    The law is constantly evolving and is applied backward and for whatever reason patent holders are always on the receiving end… go figure…
    I got my US patent with the signature of some dude names dudas granting me “the right to exclude” just couple months before scotus ebay took that right away from me
    Do they have laws as written in this country anymore ???
    me thinks not

  4. Mark Nowotarski December 19, 2017 8:41 am

    How can a plaintiff’s arguments be “objectively without merit”, when the Alice test is a purely subjective test?

  5. Greedy Gretchen December 19, 2017 3:03 pm

    Great!!! ? more cash for the GREEDY CORPORATE owners at Bed Bath and Beyond to pad their wallets meanwhile they lay off more employees!

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