Adjustacam, LLC v. Newegg, Inc.
861 F.3d 1353
| Fed. Cir. | 2017Background
- AdjustaCam sued Newegg (and many others) for infringement of U.S. Patent No. 5,855,343 (the "'343 patent") claiming a hinge that rotates about a single axis.
- Newegg’s accused products used a ball-and-socket style joint permitting rotation about multiple axes (although somewhat constrained); AdjustaCam never produced evidence that Newegg’s products were limited to a single axis.
- After a Markman ruling construing "rotatably attached" to require rotation about a single axis, AdjustaCam continued litigation against Newegg through expert discovery and then dismissed its infringement claims with prejudice shortly before summary judgment.
- Newegg moved for attorneys’ fees under 35 U.S.C. § 285; the district court denied the motion, and the Federal Circuit remanded in light of Octane Fitness v. Icon Health & Fitness.
- On remand the new district judge largely adopted the prior judge’s factual findings and again denied fees; the Federal Circuit held the district court abused its discretion and reversed, finding the case exceptional under Octane.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether this case is "exceptional" under 35 U.S.C. § 285 | AdjustaCam: its infringement and damages theories were reasonable and not frivolous; late reports were inadvertent | Newegg: case became objectively baseless after Markman; AdjustaCam pursued litigation to extract nuisance settlements and used after-the-fact declarations to rescue its position | Reversed: case is exceptional; fees warranted |
| Whether the district court properly applied Octane on remand | AdjustaCam: prior factual findings were correct and remand did not require a new independent analysis | Newegg: remand required an independent Octane totality-of-the-circumstances analysis | Reversed: district court failed to follow the mandate and did not independently evaluate the record under Octane |
| Whether Newegg’s products could reasonably be found to infringe after claim construction | AdjustaCam: ball-and-socket constraints could be read to meet single-axis limitation | Newegg: products rotate about at least two axes so cannot meet single-axis claim limitation | Held for Newegg: no reasonable factfinder could find infringement given claim construction |
| Whether AdjustaCam’s litigation conduct warranted fees (unreasonable manner) | AdjustaCam: late disclosures were inadvertent and insufficient alone to justify fees | Newegg: repeated last-minute reports, post-judgment supplemental declarations, and nuisance settlements show unreasonable litigation conduct | Held: conduct (late reports/declarations and settlement patterns) supported finding the case was litigated unreasonably and reinforced exceptionality |
Key Cases Cited
- Octane Fitness v. Icon Health & Fitness, Inc., 134 S. Ct. 1749 (2014) (clarified § 285: an "exceptional" case is one that stands out for weak substantive position or unreasonable litigation conduct)
- Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S. Ct. 1744 (2014) (appellate review of fee rulings is for abuse of discretion; courts may correct legal or clearly erroneous factual errors)
- Univ. of Utah v. Max-Planck-Gesellschaft zur Foerderung der Wissenschaften e.V., 851 F.3d 1317 (Fed. Cir. 2017) (deference to district court’s weighing of circumstantial evidence when supported by independent evaluation)
- Bayer CropScience AG v. Dow AgroSciences LLC, 851 F.3d 1302 (Fed. Cir. 2017) (district court abuses discretion if it makes a clear error in weighing relevant factors)
- Apple Inc. v. Samsung Elecs. Co., 809 F.3d 633 (Fed. Cir. 2015) (discusses limits of appellate deference to district court fee determinations)
- MarcTec, LLC v. Johnson & Johnson, 664 F.3d 907 (Fed. Cir. 2012) (review of district court’s inherent-authority awards is for abuse of discretion)