WPEM filed a complaint against SOTI alleging that SOTI’s MobiControl Speed Lockdown technology infringed U.S. Patent No. 9,148,762. WPEM alleged infringement based upon its review of a user manual for version 11 of Speed Lockdown. When it answered the complaint, SOTI pointed out that version 10 of Speed Lockdown predated the asserted patent and was invalidating prior art.
After various demands to settle from WPEM that continually went down in amount, SOTI continued to refer to the prior version of the user manual and sent a Rule 11 letter explaining that the complaint was frivolous, among other things. Ultimately, WPEM offered to dismiss the complaint with prejudice in exchange for SOTI not pursuing attorney’s fees.
When SOTI did not agree to this offer, WPEM file a motion for voluntary dismissal pursuant to Rule 41(a)(2). SOTI did not oppose the motion to dismiss but asserted that it should be required to bear its own fees and costs. After the case was dismissed, SOTI file a motion for a determination that the case was exceptional and sought its attorney’s fees.
The district court analyzed whether this was an exceptional case, noting the following:
Though exceptional cases are by definition “rare,” they do exist. Id. at 553–54. Reviewing the totality of the circumstances, the Court finds that this is such a case. Where, as here, a party unilaterally moves to dismiss its claims with prejudice, the opposing party is the prevailing party for attorneys’ fees purposes. Moreover, it is “reasonably clear” that the Accused Technology is in fact prior art, and thus if it is covered by the Asserted Patent, as WPEM contends, it invalidates rather than infringes the Asserted Patent. See SFA Sys., 793 F.3d at 1348. The Court notes that it considers these issues as part of an “evaluation of the strength of [WPEM’s] litigation position” and expresses no opinion on the ultimate merits of these issues. Id.
Further, the district court was concerned that WPEM had done no pre-filing investigation into the validity or the enforceability of the patent-in-suit:
Additionally, and crucially, the Court finds that WPEM conducted absolutely no pre-filing investigation into the validity or enforceability of the Asserted Patent. Even the most cursory of such investigations would have revealed the grounds for invalidity and unenforceability SOTI now asserts. Having failed to conduct a pre-filing investigation, the Court finds that WPEM has unreasonably subjected SOTI to the costs of litigation and should properly bear its attorneys’ fees.
Accordingly, the district court determined that the case was exceptional and awarded SOTI attorney’s fees.
WPEM, LLC v. SOTI, Inc., Case No. 2:18-CV-00156-JRG (E.D. Tex. Feb. 4, 2020)
The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.