Thursday, September 28, 2017

Want To Pursue Attorneys Fees After Invalidating A Patent in Front of the Patent Trial and Appeal Board?

Not so fast.  If the case is moot because all of the claims have been extinguished, you may have foregone your ability to pursue discovery to support your claim for attorneys fees in federal court.

MD Security Solutions, LLC sued Protection 1, Inc. for alleged infringement of U.S. Patent No. 7,864,983 concerning a security alarm system.  Protection 1 asserted the standard counterclaims seeking declarations of invalidity and noninfringement.  A third party (RPX, Corp., a patent risk management company) filed a request for inter partes review seeking to cancel the claims of the '983 Patent.  Protection 1 filed its own IPR as well (which was essentially the same as RPX's), and also joined in RPX's IPR.   Protection 1 agreed to be bound by whatever happened with RPX's IPR.  The parties in the federal case then jointly asked the Court to stay the case pending the PTAB proceedings.

The PTAB issued a final written decision finding all claims of the '983 Patent invalid.  MD Security did not appeal.  MD Security asked that the stay be lifted and the Court dismiss its claims.  Protection 1 asked for a short discovery period to pursue a claim for attorneys fees because "[i]n short, [Protection 1] argues the Plaintiff and both of its principals are patent trolls."

The Court first explained the law of mootness:
“A case is moot when events subsequent to the commencement of a lawsuit create a situation in which the court can no longer give the [party] meaningful relief.” National Ass’nof Boards of Pharmacy v. Board of Regents of the Univ. Sys. of Ga., 633 F.3d1297, 1308 (11th Cir. 2011) (citing Jews for Jesus, Inc. V. Hillsborough Cnty.Aviation Authority., 162 F.3d 627, 629 (11th Cir. 1998). As the Court in Nat. Ass’n of Bds of Pharmacy observed: 
Article III of the Constitution limits the jurisdiction of the federal courts to the consideration of “Cases” and “Controversies.”… [A] case is moot when it no longer presents a live controversy with respect to which the court can give meaningful relief. If events that occur subsequent to the filing of a lawsuit … that deprive the court of the ability to give the plaintiff … meaningful relief, then the case is moot and must be dismissed. Id. at 1309 (citations omitted).

The Court then determined the case was moot, and denied Protection 1's request to pursue discovery in support of its fee claim:

Once the ‘983 patent was determined to be unpatentable, the need for a declaratory judgement of invalidity and non-infringement became a moot issue. The parties do not disagree that a device cannot infringe a patent deemed to be unpatentable. Similarly, there is no need for a judicial determination that the ‘983 patent is invalid, since that very issue has been conclusively resolved in favor of the Defendant. Once the case is moot, the Court lacks the ability to permit discovery and the case must be dismissed. If the Defendant had desired to conduct discovery to prove the egregious conduct alleged in their response to the Order to Show Cause, they should not have joined in the IPR, nor should they have filed a separate petition for IPR of all claims of the ‘983 patent on the same grounds described in the then-pending IPR. Having chosen to invalidate the ‘983 patent before the USPTO, they cannot now complain that they are denied the ability to avail themselves of this federal forum
Case dismissed, but Protection 1 may file briefing on the issue of its entitlement to fees and/or costs.

MD Security Solutions, LLC v Protection 1, Inc., Case No. 6:15-CV-1968-ORL-40GJK (M.D. Fla. Sept. 26, 2017) (J. Byron)