Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_14-cv-01647/USCOURTS-cand-4_14-cv-01647-7/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

BLUE SPIKE, LLC,

Plaintiff,

v.

ADOBE SYSTEMS, INC.,

Defendant.

Case No. 14-cv-01647-YGR 

ORDER DENYING ADOBE’S MOTION FOR 

ATTORNEY’S FEES

Re: Dkt. No. 83

On June 2, 2015, the Court entered Final Judgment in favor of defendant Adobe Systems, 

Inc. in this patent infringement suit brought by plaintiff Blue Spike, LLC asserting patents which 

broadly claim computer-based content comparison methods and systems. (Dkt. No. 80.) 

Thereafter, defendant filed a motion seeking attorney’s fees pursuant to 35 U.S.C. § 285, 28 

U.S.C. § 1927, Federal Rules of Civil Procedure 41 and 54(d), Civil Local Rules 1-4, and the 

Court’s inherent power to impose sanctions. (Dkt. No. 83 (“Mot.”) at 1.) Defendant sought fees 

in the amount of $762,103.40. (Id.)1 Plaintiff opposed the motion. (Dkt. No. 95.)

Having carefully considered the papers submitted2and the record in this case,

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and good 

 

1

The amount sought increased to $872,103.40 in defendant’s reply brief due to “$110,000 

in additional fees incurred” after the motion was filed. (Dkt. No. 102-4 at 1; see also Dkt. No. 104 

¶¶ 3-6.) This substantial amount was apparently derived solely from hours billed in connection 

with preparing and briefing the pending motion for attorney’s fees.

2 Both parties have also filed motions to seal, in connection with the opposition and reply 

briefs. (Dkt. Nos. 98, 102.) The motions seek to seal contractually confidential terms of 

settlement agreements and settlement discussions. The Court finds the requests are sufficiently 

justified under the applicable “good cause” standard and therefore GRANTS the motions to seal the 

designated, narrowly-tailored excerpts of the documents in question. See Kamakana v. City & 

County of Honolulu, 447 F.3d 1172, 1179-80 (9th Cir. 2006); see also Prosurance Grp., Inc. v. 

Liberty Mut. Grp., Inc., No. 10-CV-02600-LHK, 2011 WL 704456, at *1 (N.D. Cal. Feb. 18, 

2011) (granting in part motion to seal filings reflecting terms of confidential settlement 

agreement).

3

The Court has determined that the motion is appropriate for decision without oral 

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cause shown, the Court hereby DENIES the motion.

I. LITIGATION HISTORY

Blue Spike has filed approximately 100 patent infringement lawsuits, including 57 within 

the Eastern District of Texas between August and October 2012. (Dkt. No. 84 (“Fisher Decl.”) ¶ 

27.) The initial and amended complaints identified the following as infringing products: Adobe 

Auditude, Project Primetime, Auditude’s Connect 2.0, and Auditude’s Connect Platform. (Dkt. 

No. 1 ¶ 27; Dkt. No. 43 ¶ 27.)

Defendants filed a motion to transfer to the Northern District of California, which was 

granted on March 13, 2014. (Dkt. No. 14.) On January 26, 2015, Magistrate Judge Jacqueline 

Scott Corley granted defendant’s motion to strike plaintiff’s improper infringement contentions, 

with leave to amend. (Dkt. No. 57.) Thereafter, plaintiff filed a motion to dismiss without 

prejudice in lieu of serving an amended set of infringement contentions. (Dkt. No. 61.) The Court 

found this filing to be a “transparent attempt to circumvent the impact of Judge Corley’s ruling” 

and, in light of plaintiff’s “failure to comply with the local rules,” dismissed its claims with 

prejudice. (Dkt. No. 74 at 4.) The Court ultimately granted judgment for defendant on certain of 

its counterclaims for non-infringement. (Dkt. Nos. 78, 80.)

Blue Spike also sued Google Inc. (“Google”) for infringement of the same patents at issue 

in this case. On September 8, 2015, after the pending motion for attorney’s fees was fully briefed,

the Court granted Google’s motion for judgment on the pleadings, invalidating the 31 asserted 

claims—spanning all five patents—at issue in the motion. See Blue Spike, LLC v. Google Inc., 

No. 14-CV-01650, 2015 WL 5260506, at *1, *6 (N.D. Cal. Sept. 8, 2015) (“At a high level, the 

patents contemplate determining whether one piece of content—e.g., a picture, a song, or a 

video—matches another, or the extent to which they are similar. . . . [G]iven the patents claim an 

abstract idea but lack any inventive concept, they fail to meet the legal standard for patentability”).

 

argument, as permitted by Civil Local Rule 7-1(b) and Federal Rule of Civil Procedure 78. See 

also Lake at Las Vegas Investors Group, Inc. v. Pacific Malibu Dev. Corp., 933 F.2d 724, 729 (9th 

Cir. 1991). 

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II. LEGAL STANDARDS

A. 35 U.S.C. § 285

The Patent Act provides that “[t]he court in exceptional cases may award reasonable

attorney fees to the prevailing party.” 35 U.S.C. § 285. An “‘exceptional’ case is simply one that 

stands out from others with respect to the substantive strength of a party’s litigating position 

(considering both the governing law and the facts of the case) or the unreasonable manner in 

which the case was litigated.” Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 

1749, 1756 (2014). The determination of what is “exceptional” is a made in exercise of the 

court’s discretion taking into account the totality of the circumstances. Id. The court considers 

such factors as evidence of bad faith litigation, objectively unreasonable positions, or improper 

conduct either before the Patent and Trademark Office or the court. See id. at 1756-57. In short, 

attorneys’ fees under 35 U.S.C. § 285 are awarded “in the rare case in which a party’s 

unreasonable conduct—while not necessarily independently sanctionable—is nonetheless so 

‘exceptional’ as to justify an award of fees.” Id. at 1757. A district court’s determination under 

this statute is reviewed for an abuse of discretion. Highmark Inc. v. Allcare Health Mgmt. Sys., 

Inc., 134 S. Ct. 1744, 1747 (2014).

B. 28 U.S.C. § 1927

28 U.S.C. § 1927 provides that an “attorney . . . who so multiplies the proceedings in any 

case unreasonably and vexatiously may be required by the court to satisfy personally the excess 

costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.” An award 

under this section requires a finding of “subjective bad faith,” where counsel “knowingly or 

recklessly raise a frivolous argument, or argues a meritorious claim for the purpose of harassing an 

opponent.” In re Keegan Mgmt. Co., Sec. Litig., 78 F.3d 431, 436 (9th Cir. 1996) (internal 

quotations omitted).

C. Sanctions Under the Court’s Inherent Power

The Court “has the inherent authority to impose sanctions for bad faith, which includes a 

broad range of willful improper conduct.” Fink v. Gomez, 239 F.3d 989, 992-94 (9th Cir. 2001)

(finding “mere recklessness, without more, does not justify sanctions under a court’s inherent 

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power” but that “[s]anctions are available for a variety of types of willful actions, including 

recklessness when combined with an additional factor such as frivolousness, harassment, or an 

improper purpose”).

III. DISCUSSION

Defendant seeks to paint a picture of a wholly unreasonable plaintiff attempting to 

“extort[] a nuisance value settlement” while engaging in “vexatious and oppressive behavior 

designed to increase Adobe’s legal expenses” even though plaintiff’s infringement contentions 

were eventually “demonstrated to be entirely baseless.” (Mot. at 2.) Defendant premises this 

argument, in large part, on its contention that it had acquired Auditude in November 2011, after 

that company’s potentially infringing products had been spun-off into a new entity, IntoNow, 

which was ultimately sold to third-party Yahoo Inc. (Mot. at 4.) Defendant, however, apparently 

concedes there was at least a colorable basis for an infringement case against it, as it “briefly 

serviced a few legacy Auditude digital fingerprinting customers as an IntoNow licensee before

permanently shutting down the fingerprinting services in January 2012—months before this action 

was filed.” (Mot. at 4 n.6.) In its reply, defendant contends only its “ad insertion” technologies 

were specifically named in the complaint and infringement contentions, not those legacy 

fingerprinting technologies. The Court cannot determine at this time, however, whether any of the 

specific products identified would have arguably fallen within the scope of the claims.4 

Defendant’s attorney argument on this point is insufficient to justify an award of fees under 

section 285 or as a sanction. While plaintiff’s conduct was less than ideal throughout the litigation 

and, in particular, as it drew to a close, the Court is not convinced that this was an “exceptional 

case,” or that counsel acted with “subjective bad faith.” The Court also declines to award 

sanctions under its inherent power in light of the relevant circumstances.

Dismissal of plaintiff’s claims with prejudice and entry of judgment in favor of defendant 

was the appropriate outcome stemming from defendant’s failure to remedy its flawed infringement 

 

4

For instance, in support of its position, defendant submits letters that it sent to defendant 

presenting similar unsupported assertions regarding its purported lack of any infringing source 

code. (See, e.g., Fisher Decl., Ex. 23.) 

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contentions. (See Fisher Decl., Ex. 12.) Nothing more is required.

IV. CONCLUSION

For the foregoing reasons, the Court DENIES defendant’s motion for attorney’s fees.

This Order terminates Docket Numbers 83, 98, 102.

IT IS SO ORDERED.

Dated: September 18, 2015

______________________________________

YVONNE GONZALEZ ROGERS

UNITED STATES DISTRICT COURT JUDGE

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