Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-13-01666/USCOURTS-ca13-13-01666-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 

---

NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

ADJUSTACAM, LLC,

Plaintiff-Appellant

v.

NEWEGG, INC., NEWEGG.COM, INC., 

ROSEWILL, INC.,

Defendants-Cross Appellants

SAKAR INTERNATIONAL, INC.,

Defendant-Cross Appellant

______________________ 

2013-1665, -1666, -1667

______________________ 

Appeals from the United States District Court for the 

Eastern District of Texas in No. 10-CV-0329, Chief Judge 

Leonard Davis.

______________________ 

Decided: September 17, 2015

______________________ 

 JOHN J. EDMONDS, Collins, Edmonds, Pogorzelski, 

Schlather & Tower PLLC, Houston, TX, argued for plaintiff-appellant. Also represented by STEPHEN F.

SCHLATHER, SHEA NEAL PALAVAN. 

Case: 13-1666 Document: 6-2 Page: 1 Filed: 09/17/2015
2 ADJUSTACAM, LLC v. NEWEGG, INC. 

 RICHARD GREGORY FRENKEL, Latham & Watkins LLP, 

Menlo Park, CA, argued for defendants-cross appellants

Newegg, Inc., Newegg.com, Inc., Rosewill, Inc. Also represented by EDWARD R. REINES, Weil, Gotshal & Manges 

LLP, Redwood Shores, CA; KENT E. BALDAUF, JR., DANIEL 

H. BREAN, ANTHONY W. BROOKS, The Webb Law Firm, 

Pittsburgh, PA; YAR ROMAN CHAIKOVSKY, Paul Hastings 

LLP, Palo Alto, CA; MARK A. LEMLEY, LAURA MILLER, 

Durie Tangri LLP, San Francisco, CA. 

 EZRA SUTTON, Ezra Sutton, P.A., Woodbridge, NJ, for 

defendant-cross appellant Sakar International, Inc. 

STEVEN MOORE, Kilpatrick Townsend & Stockton 

LLP, San Francisco, CA, for amici curiae Garmin International, Inc., Kaspersky Lab, Limelight Networks, Inc., 

SAP America, Inc., SAS Institute Inc., Xilinx, Inc.

______________________ 

Before NEWMAN, PLAGER, and HUGHES, Circuit Judges.

HUGHES, Circuit Judge. 

Cross-appellants Newegg, Newegg.com, Rosewill, and 

Sakar appeal the district court’s denial of their motions 

for a declaration of an “exceptional case” under 35 U.S.C. 

§ 285. Because we must afford the district court an 

opportunity to apply an intervening change in the law, we 

remand for reconsideration in light of the Supreme 

Court’s recent clarification of the “exceptional case” 

standard. AdjustaCam appeals the district court’s claim 

construction. We dismiss for lack of jurisdiction AdjustaCam’s appeal because the district court’s claim 

construction had no bearing on the final judgment, entered after the district court granted AdjustaCam’s motions to dismiss its claims against the cross-appellants as 

moot. 

Case: 13-1666 Document: 6-2 Page: 2 Filed: 09/17/2015
ADJUSTACAM, LLC v. NEWEGG, INC. 3

I 

AdjustaCam, LLC, is the exclusive licensee of U.S. 

Patent No. 5,855,343. In July 2010, AdjustaCam filed 

suit against fifty-eight defendants in the Eastern District 

of Texas, alleging infringement of the ’343 patent. Among 

the defendants were the cross-appellants here: Newegg, 

Inc., Newegg.com, Inc., and Rosewill, Inc. (collectively, 

Newegg); and Sakar International, Inc. (Sakar).

The ’343 patent relates to a convertible clip for supporting portable cameras. The clips are designed especially for use with a laptop computer. They are capable of 

supporting a camera on a flat surface, such as a table, as 

well as on the edge of a laptop screen. They are also 

capable of converting into a retracted position in which 

they protect the camera and are easily stored during 

transport. ’343 patent col. 1 ll. 54–59.

AdjustaCam began settling with defendants shortly 

after filing suit, dismissing its claims against most of the 

original fifty-eight defendants prior to the Markman 

order. Once the Markman order issued, AdjustaCam

dropped sixteen accused products from the suit and 

stipulated to the dismissal of its claims against several 

other defendants. AdjustaCam proceeded with discovery 

Case: 13-1666 Document: 6-2 Page: 3 Filed: 09/17/2015
4 ADJUSTACAM, LLC v. NEWEGG, INC. 

and pre-trial motions on its claims against Newegg, 

Sakar, and Kohl’s—Sakar’s primary distributor. 

On August 27, 2012, AdjustaCam filed a motion to 

dismiss its claims against Newegg and Newegg’s counterclaims. AdjustaCam explained that, because of the settlement licenses granted to upstream suppliers, Newegg’s 

damages liability had become de minimus. According to 

AdjustaCam, Sakar and Kohl’s were the only defendants 

left with substantial damages liability. Further, AdjustaCam explained that it had granted Newegg a covenant not to sue. Newegg initially opposed the motion. 

On August 30, 2012, the Patent and Trademark Office 

issued a Final Office Action in an ex parte reexamination 

rejecting all of the asserted claims of the ’343 patent. On 

September 20, 2012, AdjustaCam elected to cancel the 

asserted claims to allow issuance of a reexamination 

certificate with new and amended claims. 

AdjustaCam subsequently filed a new motion to dismiss its claims against Newegg with prejudice and 

Newegg’s counterclaims without prejudice. Newegg did 

not oppose the motion. AdjustaCam explained that the 

case had become moot due to the cancellation of the 

claims and a covenant not to sue Newegg. The district 

court granted the motion on September 27, 2012. Later, 

AdjustaCam filed an unopposed motion to dismiss its 

claims against Sakar and Kohl’s with prejudice and their 

counterclaims without prejudice. This motion also stated

that the case had become moot due to cancellation of the 

claims and a covenant not to sue granted to those parties. 

The district court granted the motion on December 17, 

2012. 

Newegg and Sakar filed motions for a declaration that 

this case was “exceptional” under 35 U.S.C. § 285, requesting attorney fees and expert fees. They argued that 

AdjustaCam’s infringement contentions were objectively 

baseless in light of the district court’s claim construction;

Case: 13-1666 Document: 6-2 Page: 4 Filed: 09/17/2015
ADJUSTACAM, LLC v. NEWEGG, INC. 5

that AdjustaCam’s validity arguments were objectively 

baseless; that AdjustaCam brought the case in subjective 

bad faith, as shown by its “nuisance value” settlements 

with other defendants; and that AdjustaCam committed 

litigation misconduct and Rule 11 violations. The district 

court disagreed and denied these motions on August 19, 

2013. 

After the district court entered final judgment in the 

case and denied Newegg and Sakar’s motions for fees, 

AdjustaCam filed an appeal to this court challenging the 

district court’s claim construction. Newegg and Sakar 

filed cross-appeals, arguing the district court erred in 

denying attorney and expert fees.

II 

Our jurisdiction is generally limited to appeals from a 

final judgment. 28 U.S.C. § 1295(a) (conferring jurisdiction “of an appeal from a final decision of a district 

court”); SanDisk Corp. v. Kingston Tech. Co., Inc., 695 

F.3d 1348, 1353 (Fed. Cir. 2012). The requirement of a 

final judgment is often applied to preclude review of 

certain interlocutory decisions. See, e.g., Spread Spectrum Screening LLC v. Eastman Kodak Co., 657 F.3d 

1349, 1354–60 (Fed. Cir. 2011). But it also limits the 

issues we may consider to those that are the subject of a 

final judgment when one is entered. Mass. Inst. of Tech. 

& Elecs. for Imaging, Inc. v. Abacus Software, 462 F.3d 

1344, 1350 (Fed. Cir. 2006). Thus, where “a party’s claim 

construction arguments do not affect the final judgment 

entered by the court, they are not reviewable.” SanDisk 

Corp., 695 F.3d at 1354 (declining to consider the construction of claims withdrawn prior to the final judgment 

on the issue of infringement).

Here, AdjustaCam appeals the district court’s claim 

construction order. AdjustaCam argues that we have 

jurisdiction over its appeal because the district court 

entered final judgment in the case. But claim construcCase: 13-1666 Document: 6-2 Page: 5 Filed: 09/17/2015
6 ADJUSTACAM, LLC v. NEWEGG, INC. 

tion had no effect on the district court’s final judgment. 

The district court entered judgment solely on the basis of

the parties’ joint motions to dismiss, including AdjustaCam’s voluntary motions to dismiss Newegg and 

Sakar. The stated basis for those motions was that AdjustaCam’s infringement allegations had become moot 

due to cancellation of the asserted claims and covenants 

not to sue Newegg and Sakar. Because the district court’s 

non-final claim construction order had no bearing on its 

final judgment, we must dismiss AdjustaCam’s appeal for 

lack of jurisdiction.1

III 

To determine whether this case was “exceptional” under 35 U.S.C. § 285, the district court applied the standard set out in Brooks Furniture Manufacturing v. 

Dutailier International, Inc., 393 F.3d 1378, 1381 (Fed. 

Cir. 2005). Under that standard, a case is exceptional 

only “when there has been some material inappropriate 

conduct” or when the litigation is both “objectively baseless” and “brought in subjective bad faith.” Brooks Furniture, 393 F.3d at 1381. The party seeking attorney fees 

must prove these factors by clear and convincing evidence. 

Id. at 1382. 

Since the district court’s decision, the Supreme Court 

decided Octane Fitness, LLC v. Icon Health & Fitness, 

Inc., 134 S. Ct. 1749 (2014). In that case, the Supreme 

1 After this case was argued and Newegg filed a 

motion for attorney fees and costs, alleging that AdjustaCam’s appeal was frivolous, AdjustaCam filed a 

motion to terminate its appeal. See Voluntary Dismissal 

of Appeal, AdjustaCam, LLC v. Newegg, Inc., No. 2013-

1665 (May 28, 2015). Because we dismiss AdjustaCam’s

appeal for lack of jurisdiction, we deny this motion as 

moot. 

 

Case: 13-1666 Document: 6-2 Page: 6 Filed: 09/17/2015
ADJUSTACAM, LLC v. NEWEGG, INC. 7

Court rejected the Brooks Furniture test as overly rigid. 

It held that “an ‘exceptional’ case is simply one that 

stands out from others with respect to the substantive 

strength of a party’s litigating position . . . or the unreasonable manner in which the case was litigated.” Id. at 

1756. A district court “may determine whether a case is 

‘exceptional’ in the case-by-case exercise of their discretion, considering the totality of the circumstances.” Id. 

Further, the Supreme Court held that the governing 

burden of proof is not clear and convincing evidence, but a 

preponderance of the evidence, as in other aspects of civil 

litigation. Id. at 1758.

Although the governing standard has changed, 

Newegg and Sakar argue that remand is not necessary. 

They argue that in Octane Fitness, the Supreme Court 

relaxed the test for finding a case “exceptional” under 

§ 285. Because the district court erred under the more 

“rigid” Brooks Furniture standard, they say, it necessarily 

erred under the new Octane Fitness standard. But the 

Supreme Court did not simply relax the standard under 

§ 285. It substantially changed the analysis. The district 

court may now consider the totality of the circumstances 

to determine whether this case is “exceptional,” and the 

district court is not necessarily required to find evidence 

of the specific factors outlined in Brooks Furniture. 

Further, the Supreme Court lowered the burden of proof 

for establishing that a case is “exceptional.” We decline to 

substitute our judgment for that of the district court in 

applying these new standards in the first instance. 

Accordingly, we remand for reconsideration in light of 

Octane Fitness.2 

2 We note, however, that Newegg and Sakar’s arguments appear to have significant merit, particularly 

their argument that AdjustaCam’s continued pursuit of 

 

Case: 13-1666 Document: 6-2 Page: 7 Filed: 09/17/2015
8 ADJUSTACAM, LLC v. NEWEGG, INC. 

IV

Because the district court’s claim construction was not 

the subject of a final judgment, we dismiss AdjustaCam’s 

claim construction appeal for lack of jurisdiction. And 

because the district court must be afforded an opportunity 

to evaluate whether this case is “exceptional” under the 

totality of the circumstances and a lower burden of proof,

we vacate the district court’s denial of attorney fees and 

remand for reconsideration in light of Octane Fitness. We 

also vacate and remand the district court’s denial of 

expert fees, which was premised on its finding that this 

case is not “exceptional” under § 285.

DISMISSED IN PART, VACATED IN PART, AND 

REMANDED

its infringement claims after the district court construed 

the claim term “rotatably attached” was baseless.

 

Case: 13-1666 Document: 6-2 Page: 8 Filed: 09/17/2015