Lumen View Technology LLC v. Findthebest.com, Inc.
811 F.3d 479
| Fed. Cir. | 2016Background
- Lumen View, exclusive licensee of U.S. Patent No. 8,069,073 (method for bilateral/multilateral preference matching), sued Findthebest.com (FTB) in May 2013 for patent infringement based on FTB’s “AssistMe” recommendation feature.
- FTB repeatedly told Lumen View pre-suit that AssistMe used only a single user’s preference data, not bilateral/multilateral data; Lumen View nevertheless served infringement contentions and pursued the suit.
- The district court granted FTB’s Rule 12(c) judgment on the pleadings, holding the ’073 patent claims directed to an abstract idea and invalid under 35 U.S.C. § 101; it found claim construction unnecessary.
- FTB moved for attorney fees under 35 U.S.C. § 285; the district court found the case exceptional under Octane Fitness and awarded fees, reasoning Lumen View’s suit was frivolous and part of a predatory nuisance-litigation strategy.
- The district court calculated fees by lodestar and then doubled the amount (2x multiplier), citing quick case resolution (low lodestar) and the need for deterrence.
- On appeal the Federal Circuit affirmed exceptionality but vacated the enhanced fee award for lack of adequate justification for the 2x multiplier and remanded for recalculation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the case was "exceptional" under § 285 | Lumen View: conducted reasonable pre-suit investigation; claims were based on a presumptively valid patent; district court biased | FTB: Lumen View failed to timely present pre-filing investigation; presumption of validity does not excuse baseless infringement claims | Affirmed: court did not abuse discretion — totality of circumstances showed the suit was baseless and litigation unreasonable |
| Whether claim construction was required before finding noninfringement | Lumen View: court erred by deciding noninfringement without construction | FTB: construction unnecessary because Lumen View’s own proposed construction required multi-party data | Affirmed: claim construction not required given Lumen View’s concessions |
| Whether the lodestar may be enhanced in this case | Lumen View: enhancement improper; § 285 permits only reasonable (compensatory) fees; deterrence already served by fees | FTB: enhancement permissible in rare exceptional cases where lodestar undercompensates; multiplier supported by expedited schedule and deterrence needs | Reversed in part: enhancement vacated — district court failed to justify 2x multiplier and relied on impermissible considerations (results obtained, deterrence) |
| Standard for remand and recalculation of fees | Lumen View: remand should result in reduced/nominal award if enhancement improper | FTB: remand should allow district court to justify a multiplier based on record | Remand: district court must recompute reasonable attorney fees under lodestar and may consider only appropriate factors for enhancement per precedent |
Key Cases Cited
- Octane Fitness v. ICON Health & Fitness, 572 U.S. 545 (2014) (defines “exceptional” and endorses totality-of-circumstances test for § 285)
- Highmark Inc. v. Allcare Health Mgmt. Sys., 572 U.S. 559 (2014) (reviews § 285 determinations for abuse of discretion)
- Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542 (2010) (lodestar method and narrow circumstances permitting enhancement)
- Pennsylvania v. Del. Valley Citizens’ Council for Clean Air, 483 U.S. 711 (1987) (discusses circumstances justifying enhancement of fee awards)
- Bywaters v. United States, 670 F.3d 1221 (Fed. Cir. 2012) (enhancement allowed only when lodestar fails to account for relevant consideration)
- Blum v. Stenson, 465 U.S. 886 (1984) (results obtained generally subsumed within lodestar)
- Junker v. Eddings, 396 F.3d 1359 (Fed. Cir. 2005) (client payment is one factor, not ceiling, in determining reasonable fees)