Parallel Networks, LLC v. Kayak Software Corporation
700 F. App'x 1000
| Fed. Cir. | 2017Background
- Parallel Networks sued over U.S. Patent No. 6,446,111 alleging certain website applets infringed claims requiring an "executable applet" that is executable when generated and before transmission to the client.
- This appeal follows the district court's grant of summary judgment of noninfringement for Kayak, Orbitz, and Wolverine because their accused applets relied on external resources transmitted separately and thus were not "executable applets" as claim-constructed.
- Parallel Networks previously lost claim construction on the "executable applet" requirement in this litigation (Fed. Cir. construction: executable when generated and before first transmission).
- Parallel Networks attempted to change its expert position mid-brief about Kayak’s applet; the district court disallowed that belated revision.
- Shoebuy: Parallel Networks offered to dismiss its infringement claim with prejudice only if Shoebuy dismissed its invalidity counterclaim with prejudice; the district court dismissed both with prejudice based on an erroneously found covenant.
- All defendants sought attorneys’ fees under 35 U.S.C. § 285; the district court denied fees and the Federal Circuit affirmed that denial (but reversed the with-prejudice dismissal of Shoebuy’s invalidity counterclaim).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether accused applets infringe the ’111 Patent (executable-applet requirement) | Applets are "executable" when evaluated on intended client devices; thus they may meet claim requirements | Applets rely on external resources transmitted separately, so they are not executable when generated/transmitted and do not meet claim | Affirmed: summary judgment of noninfringement for Kayak, Orbitz, Wolverine (applets relied on external resources and thus were not "executable" as construed) |
| Whether Parallel Networks could reverse its earlier factual/expert position about Kayak in a surreply | Position change was justified by new analysis | Change was impermissible and amounted to impeaching prior sworn testimony without explanation | Affirmed: district court properly barred the belated change; no genuine factual dispute on reliance on external resources |
| Whether case was "exceptional" warranting attorneys’ fees under 35 U.S.C. § 285 | Parallel Networks’ theory was meritless in light of prior Federal Circuit decision and litigation was aimed at extorting settlements | Defendants argued objective unreasonableness and improper litigation conduct meriting fees | Affirmed: district court did not abuse discretion in denying fees; Parallel Networks’ theory and conduct did not render the case "exceptional" under Octane Fitness standard |
| Whether dismissal of Shoebuy’s invalidity counterclaim should be with prejudice | District court found a covenant and dismissed both claims with prejudice | Shoebuy argued no covenant existed and dismissal with prejudice was erroneous | Reversed in part: dismissal of Shoebuy’s invalidity counterclaim with prejudice was an abuse of discretion; dismissal should be without prejudice |
Key Cases Cited
- Parallel Networks, LLC v. Abercrombie & Fitch Co., 704 F.3d 958 (Fed. Cir. 2013) (construing "executable applet" to require applet to be executable when generated and before transmission)
- S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489 (5th Cir. 1996) (parties may not defeat summary judgment with affidavits that impeach earlier sworn testimony without explanation)
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (U.S. 2014) (standard for awarding attorneys’ fees under § 285; "exceptional" case is case-by-case totality-of-circumstances inquiry)
- Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994) (factors relevant to fee awards include frivolousness, motivation, and objective unreasonableness)