Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-14-01297/USCOURTS-ca13-14-01297-0/pdf.json

Parties Involved:
Oplus Technologies, Ltd.
Appellee
Sears Holdings Corporation
Not party
VIZIO, Inc.
Appellant

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

OPLUS TECHNOLOGIES, LTD.,

Plaintiff-Appellee

v.

VIZIO, INC.,

Defendant-Appellant

SEARS HOLDINGS CORPORATION,

Defendant

______________________ 

2014-1297

______________________ 

Appeal from the United States District Court for the 

Central District of California in No. 2:12-cv-05707-MRPE, Senior Judge Mariana R. Pfaelzer.

______________________ 

Decided: April 10, 2015 

______________________ 

MICHAEL E. JOFFRE, Kellogg, Huber, Hansen, Todd, 

Evans & Figel, PLLC, Washington, DC, argued for plaintiff-appellee. Also represented by ARTHUR A. GASEY;

DANIEL R. FERRI, RAYMOND PARDO NIRO, I, Niro, Haller & 

Niro, Chicago, IL.

ADRIAN MARY PRUETZ, Glaser, Weil, Fink, Jacobs, 

Howard, Avchen & Shapiro LLP, Los Angeles, CA, argued 

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2 OPLUS TECHNOLOGIES, LTD. v. VIZIO, INC. 

for defendant-appellant. Also represented by CHARLES 

CHRISTIAN KOOLE, DAN LIU, MIEKE K. MALMBERG. 

______________________ 

Before PROST, Chief Judge, MOORE, and O’MALLEY,

Circuit Judges.

MOORE, Circuit Judge. 

Vizio, Inc. appeals from the district court’s denial of 

attorneys’ and expert witness fees under 35 U.S.C. § 285, 

28 U.S.C. § 1927, and the court’s inherent power. We 

hold that the district court abused its discretion in denying fees, and thus vacate and remand. 

BACKGROUND

Oplus Technologies, Ltd. originally filed this patent 

infringement suit in the Northern District of Illinois 

against Vizio and Sears Holding Corporation. The Northern District of Illinois granted defendants’ motion to 

transfer the case to the Central District of California. 

Oplus Techs., Ltd. v. Sears Holdings Corp., No. 11-cv8539, 2012 WL 2280696, at *8 (N.D. Ill. June 15, 2012). 

After the case was transferred, Oplus moved the Judicial 

Panel on Multidistrict Litigation to transfer the case back 

to the Northern District of Illinois and consolidate it with 

cases Oplus filed against Sears and other companies. The 

Panel denied Oplus’s motion. In re Oplus Techs., Ltd., 

Patent Litig., 899 F. Supp. 2d 1373, 1374 (J.P.M.L. 2012).

The course of this litigation was anything but ordinary as the district court’s opinion thoughtfully chronicles. On the merits, the case concluded when the Central 

District of California granted summary judgment of 

noninfringement of the asserted patents. Vizio moved to 

recover attorneys’ and expert witness fees pursuant to 35 

U.S.C. § 285, 28 U.S.C. § 1927, and the court’s inherent 

power. Following briefing and a hearing, the court issued 

an opinion with numerous findings regarding Oplus’s 

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OPLUS TECHNOLOGIES, LTD. v. VIZIO, INC. 3

litigation misconduct. Oplus Techs., Ltd. v. Sears Holdings Corp., No. 2:12-cv-05707-MRP-Ex (C.D. Cal. Feb. 3, 

2014), ECF No. 220 (Fees Order). The court found that 

from the start Oplus “delayed the litigation by strategically amending its claims to manufacture venue,” and, in 

doing so, “flouted the standards of appropriate conduct 

and professional behavior.” Id. at 11. It found that 

“Oplus provided only the most tenuous basis in its initial

complaint for bringing suit in Illinois” and that its “first 

amended complaint took its first step over the boundaries 

of professionalism” because the “amendment rendered its 

allegations against Sears prima facie inadequate.” Id. It 

chastised Oplus for “ignor[ing] well-settled law” by asking 

“the [Panel on Multidistrict Litigation] to return the case 

to Illinois after it lost” the motion to transfer to the Central District of California. Id.

The court found that “Oplus misused the discovery 

process to harass Vizio by ignoring necessary discovery, 

flouting its own obligations, and repeatedly attempting to 

obtain damages information to which it was not entitled.” 

Id. It found that Oplus implemented an “abusive discovery strategy” that involved “avoid[ing] its own litigation 

and discovery obligations while forcing its opponent to 

provide as much information as possible about Vizio’s 

products, sales, and finances.” Id. The court noted that 

its “greatest concern . . . was Oplus’s counsel’s subpoena 

for documents counsel had accessed under a prior protective order.” Id. at 12. In that instance, counsel for Oplus 

represented an unrelated patentee in a prior litigation 

against Vizio and, pursuant to the protective order in that 

prior litigation, retained copies of documents produced by 

Vizio. Id. Here, counsel for Oplus, Niro, Haller & Niro, 

drafted what it called a tailored subpoena for documents 

retained by counsel for the earlier plaintiff, which also 

happened to be Niro, Haller & Niro. Id. The court concluded that it “strain[ed] credulity” to believe that Oplus 

“issued the subpoena without using any knowledge by 

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4 OPLUS TECHNOLOGIES, LTD. v. VIZIO, INC. 

three attorneys [that both worked on the earlier case and 

the present case] as to the content of the discovery 

sought.” Id. at 12–13. The court found that “Oplus 

blatantly misinterpreted its own prior discovery requests 

in an attempt to obtain the same information the Court 

had previously refused to compel.” Id. at 13.

The court found that “Oplus used improper litigation 

tactics including presenting contradictory expert evidence 

and infringement contentions as well as misrepresenting 

legal and factual support.” Id. It found that Oplus’s 

response to Vizio’s complaint about contradictory expert 

opinions—where Oplus disavowed “its own expert’s 

statement when Vizio cited the paragraph, rather than 

the paragraph heading” of its expert’s report—was “merely one example of Oplus’s strategic manipulation of the 

facts and evidence provided to the Court.” Id. at 14. In 

another example, it noted that whereas “Oplus’s infringement contentions cite[d] a patent to show infringement” of Oplus’s patents, its “expert testifie[d] that the 

same patent did not disclose the methods of Oplus’s 

patents.” Id. It found that “Oplus consistently twisted 

the Court’s instructions and decisions” and attempted “to 

mislead the Court.” Id. It complained that when “Oplus 

had no evidence of infringement of one element of a claim, 

it simply ignored that element and argued another.” Id. 

It found that “Oplus regularly cited to exhibits that failed 

to support the propositions for which they were cited” and 

that “Oplus’s malleable expert testimony and infringement contentions left Vizio in a frustrating game of WhacA-Mole throughout the litigation.” Id. 

The district court found the case exceptional under 35 

U.S.C. § 285 and that Oplus and its counsel were vexatious litigants and engaged in litigation misconduct. Id. 

at 10–15. Despite its specific findings regarding Oplus’s 

conduct and its ultimate finding that the case was exceptional, the court denied Vizio’s request for fees. Id. at 16–

18. It noted that “[a]though Oplus’s behavior has been 

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OPLUS TECHNOLOGIES, LTD. v. VIZIO, INC. 5

inappropriate, unprofessional, and vexatious, an award of 

attorney fees must take the particular misconduct into 

account.” Id. at 16. It then stated, without further explanation, that the “case has been fraught with delays and 

avoidance tactics to some degree on both sides.” Id. It 

noted that “each instance of motion practice occurred 

according to normal litigation practice” and that “[t]here 

is little reason to believe that significantly more attorney 

fees or expert fees have been incurred than would have 

been in the absence of Oplus’s vexatious behavior.” Id. 

It also denied fees under § 1927, reasoning that “there 

is no evidence suggesting that Oplus’s behavior stemmed 

from bad faith or a sufficient intent to harass,” even 

though the “Court has ample evidence of Oplus’s litigation 

misconduct.” Id. It denied fees under its inherent power, 

reasoning that “it would be a mistake for the Court to use 

its inherent power” to grant fees because “other tools for 

sanctioning behavior exist and apply to the party’s misconduct.” Id. at 18. Vizio appeals; we have jurisdiction 

under 28 U.S.C. § 1295(a)(1). 

DISCUSSION

We review all aspects of a district court’s determination under 35 U.S.C. § 285 for abuse of discretion. Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S. Ct. 

1744, 1749 (2014). The Ninth Circuit reviews a denial of 

sanctions under 28 U.S.C. § 1927 and a court’s inherent 

power for abuse of discretion. Trulis v. Barton, 107 F.3d 

685, 692, 695 (9th Cir. 1995). 

Section 285 provides: “The court in exceptional cases 

may award reasonable attorney fees to the prevailing 

party.” When the district court issued its opinion, we had 

required that patent litigants establish entitlement to 

fees under § 285 by clear and convincing evidence. Brooks 

Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378, 

1382 (Fed. Cir. 2005). Since the district court issued its 

opinion, the Supreme Court rejected this requirement, 

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6 OPLUS TECHNOLOGIES, LTD. v. VIZIO, INC. 

holding that “nothing in § 285 justifies such a high standard of proof.” Octane Fitness, LLC v. ICON Health & 

Fitness, Inc., 134 S. Ct. 1749, 1755, 1758 (2014). This 

change in the law lowers considerably the standard for 

awarding fees. In light of this change in the law, we 

believe it appropriate to vacate and remand this case in 

order for the district court to reconsider the propriety of 

awarding fees. 

The district court opinion details an egregious pattern

of misconduct. Even Oplus’s counsel “agree[s] that [the 

misconduct was] quite severe.” Oral Arg. at 14:40–43, 

available at http://oralarguments.cafc.uscourts.gov/

default.aspx?fl=2014-1297.mp3. Although an award of 

fees is within the discretion of the district court, nothing 

in the opinion or in the record substantiates the court’s 

decision not to award fees. The court’s opinion details

Oplus’s misconduct. Given that the district court found 

counsel’s behavior “inappropriate,” “unprofessional,” 

“vexatious,” and “harassing,” it is difficult to imagine how 

Vizio had not incurred additional expenses defending 

against such filings. E.g., Fees Order at 14, 16. The 

district court explained that Oplus’s litigation positions, 

expert positions, and infringement contentions were a 

constantly moving target, “a frustrating game of Whac-AMole throughout the litigation.” Id. at 14. Defending 

against a constantly moving target would logically have 

increased the expense of litigation for Vizio. The court 

also detailed Oplus’s “abusive discovery strategy,” id. at 

11, explaining that “Oplus misused the discovery process 

to harass Vizio by ignoring necessary discovery, flouting 

its own obligations, and repeatedly attempting to obtain 

damages information to which it was not entitled.” Id. 

Again, it seems that this sort of discovery abuse would 

increase litigation costs for Vizio. The court gave several 

examples, including Oplus’s filing of motions to compel, 

which were “seriously contradictory and unreasonable” 

and sought to compel discovery that it was not entitled to 

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and had never even requested. Id. at 8–9. Here too it 

seems likely that additional litigation expenses would 

have been incurred. 

After detailing the serious misconduct and concluding 

that the case was exceptional, the explanation the court 

gave for denying fees was that the “case has been fraught 

with delays and avoidance tactics to some degree on both 

sides.” Id. at 16. The court did not specify the delays or 

tactics and, at oral argument, counsel for Oplus was 

unable to articulate delays that were substantiated in the

record, let alone actions that would warrant the court’s 

denial. Oral Arg. at 15:30–18:00. On appeal, “Oplus has 

not challenged any finding by the district court” or “any 

single thing that [the district court judge] said.” Id. at

14:28–37. 

We have reviewed the record and cannot find a basis 

to support the court’s refusal to award fees. Oplus argues 

fees are not warranted because Vizio did not promptly 

move for summary judgment. We see no unusual delay in 

this record. That Vizio did not move for summary judgment at the outset of litigation does not absolve counsel’s

uncontested litigation misconduct nor could it justify 

refusal to award fees after summary judgment was filed. 

In fact, Oplus admitted, it failed to address multiple 

noninfringement contentions in its summary judgment 

opposition. Id. at 27:58–30:54; see also Fees Order at 8 

n.3 (noting that Oplus’s opposition to summary judgment 

failed to even address several steps of the claimed method). Rather than stipulating to noninfringement, counsel

forced the court to consider its opposition, which was 

predicated on the presentation of contradictory expert 

testimony. This conduct caused additional process and

wasted party and judicial resources.

Oplus argues that fees are not warranted because the 

court noted that motion practice followed normal litigation practice. Whether or not this was similar to a normal 

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8 OPLUS TECHNOLOGIES, LTD. v. VIZIO, INC. 

case in that there was discovery and dispositive motion 

practice does not mean that Vizio did not incur additional 

fees on account of counsel’s misconduct. The discovery 

abuses, unprofessionalism, and changing litigation positions described by the court had to have increased expense and frustration for all concerned. 

Oplus argues that fees are not warranted because the 

court found that Oplus’s allegations against Vizio were 

not objectively baseless at filing. Oplus’s reliance on this 

section of the court’s decision is misplaced. The court was 

deciding whether it would “alternatively award attorney 

fees” because Vizio alleged that the case was brought in 

subjective bad faith and was objectively baseless, not 

whether the lack of objective baselessness weighed 

against awarding fees for litigation misconduct. Fees 

Order at 15. 

Finally, Oplus argues that the court’s decision to deny 

fees was not due to the court’s professed aversion to 

awarding fees. J.A. 500 at 11:9–17; J.A. 505 at 16:12–15; 

and J.A. 518 at 29:19–22. In light of the detailed findings

of misconduct in this case, the lack of basis for denying 

fees and the recent change in the law related to fees by 

the Supreme Court (which lowered the standard for 

assessing entitlement to fees), we vacate and remand for 

reconsideration. 

CONCLUSION

Although the award of fees is clearly within the discretion of the district court, when, as here, a court finds 

litigation misconduct and that a case is exceptional, the 

court must articulate the reasons for its fee decision. In 

light of the court’s fact findings regarding the extent of 

harassing, unprofessional, and vexatious litigation, the 

change in legal standard by the Supreme Court, and the 

lack of sufficient basis to deny fees under § 285, we vacate 

and remand for the district court to consider whether and 

the extent to which fees are warranted. Because the court 

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premised its decision regarding fees under § 1927 and its 

inherent power at least in part on its decision to deny fees 

under § 285, we vacate those rulings and remand for 

further proceedings. 

VACATED AND REMANDED

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