Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-01448/USCOURTS-ca13-15-01448-0/pdf.json

Parties Involved:
CBS Corp.
Not party
Jasons Deli Corp
Not party
Newegg Inc.
Appellant
Site Update Solutions, LLC
Appellee
Ticketmaster Entertainment, Inc.
Not party
Time Warner Inc.
Not party
Walt Disney Company
Not party

Document Text:

NOTE: This disposition is nonprecedential. 

United States Court of Appeals 

for the Federal Circuit ______________________ 

SITE UPDATE SOLUTIONS, LLC,

Plaintiff-Appellee

v.

CBS CORP., JASONS DELI CORP, TICKETMASTER 

ENTERTAINMENT, INC., THE WALT DISNEY 

COMPANY, TIME WARNER INC.,

Defendants

NEWEGG INC.,

Defendant-Appellant

______________________ 

2015-1448

______________________ 

Appeal from the United States District Court for the 

Northern District of California in No. 5:11-cv-03306-PSG, 

Magistrate Judge Paul S. Grewal.

______________________ 

Decided: February 1, 2016

______________________ 

 JOHN J. EDMONDS, Collins, Edmonds, Pogorzelski, 

Schlather & Tower PLLC, Houston, TX, argued for plaintiff-appellee. Also represented by SHEA NEAL PALAVAN. 

Case: 15-1448 Document: 62-2 Page: 1 Filed: 02/01/2016
2 SITE UPDATE SOLUTIONS, LLC v. CBS CORP. 

 YAR ROMAN CHAIKOVSKY, Paul Hastings LLP, Palo 

Alto, CA, argued for defendant-appellant. Also represented by PHILIP OU. 

STEVEN MOORE, Kilpatrick Townsend & Stockton 

LLP, San Francisco, CA, for amici curiae Acushnet Company, Huawei Technologies Co., Ltd., Kaspersky Lab, 

Limelight Networks, Inc., QVC, Inc., SAS Institute Inc., 

Symmetry LLC, Xilinx, Inc.

______________________ 

Before PROST, Chief Judge, DYK, and REYNA, Circuit 

Judges.

REYNA, Circuit Judge.

Newegg Inc. (“Newegg”) appeals from the district 

court’s order denying Newegg’s supplemental motion for 

attorney’s fees under 35 U.S.C. § 285. The district court 

denied Newegg’s motion once before, and we remanded to 

the district court in view of Octane Fitness, LLC v. Icon 

Health & Fitness, Inc., 134 S. Ct. 1749 (2014). On remand, the district court applied the Octane Fitness standard and again denied Newegg’s request for attorney’s fees. 

Because the district court did not abuse its discretion in 

denying Newegg’s supplemental motion for attorney’s 

fees, we affirm. 

BACKGROUND

In 2010, Site Update Solutions, LLC (“Site Update”) 

sued 39 companies in the Eastern District of Texas, 

asserting claim 8 of U.S. Patent No. RE40,683, which set 

out numerous means-plus-function terms. The case was 

transferred to the Northern District of California, and all 

defendants except for Newegg settled with Site Update. 

During claim construction, Site Update vacillated on its 

theories to identify suitable structure for the means-plusfunction terms. During the Markman hearing, the district court adopted claim constructions that undermined

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SITE UPDATE SOLUTIONS, LLC v. CBS CORP. 3

most of Site Update’s positions. Shortly after the hearing, 

Newegg and Site Update filed a stipulation to dismiss

with prejudice all claims against Newegg. Newegg moved 

for attorney’s fees on the basis that the case was exceptional under Brooks Furniture Mfg., Inc. v. Dutailier Int’l, 

Inc., 393 F. 3d 1378, 1381 (Fed. Cir. 2005). The district 

court denied Newegg’s motion for fees. Newegg appealed,

and we remanded in the wake of Octane Fitness, the case 

in which the Supreme Court established a new standard 

for the award of attorney’s fees under § 285. 

On remand, Newegg filed a supplemental motion, arguing for fees under the Octane Fitness standard. In a 33-

page opinion, the district court denied Newegg’s request 

for fees. Applying Octane Fitness, the district court 

provided eight reasons for denying fees: (1) Site Update’s

unreasonable claim constructions were not “so weak that 

this case stands out from others because [Site Update] 

abandoned its reliance on these constructions when it was 

given the opportunity to do so”; (2) Site Update’s misunderstanding of means-plus-function law did not make the 

case exceptional; (3) Site Update’s positions on necessary 

structures were “unartful,” but not so frivolous to be 

exceptional; (4) Site Update’s position on structures 

“strains credibility,” but was not so unreasonable as to 

warrant fees; (5) an incorrect proposed claim construction 

is not exceptional; (6) Site Update’s infringement theories 

had flaws, but losing does not compel fees; (7) Site Update’s willingness to settle does not make the case exceptional; and (8) deterrent policy considerations are 

inapposite in this case. 

 Newegg appeals. We have jurisdiction under 

28 U.S.C. § 1295(a).

STANDARD OF REVIEW

We review the denial of a motion for attorney’s fees 

under 35 U.S.C. § 285 for abuse of discretion. Highmark 

Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S. Ct. 1744, 

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4 SITE UPDATE SOLUTIONS, LLC v. CBS CORP. 

1747 (2014). “A district court would necessarily abuse its 

discretion if it based its ruling on an erroneous view of the 

law or on a clearly erroneous assessment of the evidence.” 

Id. at 1748 n.2. “A factual finding is clearly erroneous if, 

despite some supporting evidence, we are left with the 

definite and firm conviction that a mistake has been 

made.” Insite Vision, Inc. v. Sandoz, Inc., 783 F.3d 853, 

858 (Fed. Cir. 2015).

DISCUSSION

Newegg argues that the district court abused its discretion in denying its request for an award of attorney’s 

fees. Newegg asserts that the case stands out because 

Site Update’s complaint and infringement contentions 

were at all times frivolous, even as Site Update gravitated

toward arguably better positions as the case progressed. 

Newegg contends that Site Update’s failure to present a 

cogent argument as to the supporting structure for the 

asserted means-plus-function claim cannot go unpenalized. Newegg further contends that Site Update’s practice 

of extracting nuisance value settlements as a business 

model warrants fees. The amici add fuel to this argument 

by asserting that leveraged forced settlements are a 

problem in the industry, district courts need additional 

guidance on awarding fees, and awarding fees can deter 

meritless lawsuits. 

We conclude that the district court did not abuse its 

discretion. Courts may award reasonable attorney’s fees 

to the prevailing party in exceptional cases. 35 U.S.C. § 

285. “[A]n ‘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.” Octane Fitness, 134 S. 

Ct. 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 circumstancCase: 15-1448 Document: 62-2 Page: 4 Filed: 02/01/2016
SITE UPDATE SOLUTIONS, LLC v. CBS CORP. 5

es.” Id. The movant must show exceptionality by preponderant evidence. Id. at 1758. 

Although reasonable minds may differ, the district 

court ruled from a position of great familiarity with the 

case and the conduct of the parties, and it determined 

that Site Update’s tactical blunders and mistakes do not 

warrant fees under 35 U.S.C. § 285. The district court 

noted that Site Update tried and failed, but losing a case 

does not make it exceptional.

Newegg essentially urges this Court to adopt a de novo review of the district court’s findings. As we note 

above, our review is limited to determining whether the 

district court based its ruling on an erroneous view of the 

law or on a clearly erroneous assessment of the evidence, 

or otherwise abused its discretion. Highmark, 135 S.Ct. 

1748 n.2. We do not agree with Newegg that this is a 

situation where the district court failed to apply the 

correct law. Thus, under the circumstances of this case, 

our review authority is limited to whether a district 

court’s findings are supported by evidence and sound 

reasoning.

The new Octane Fitness standard for an exceptional 

case applies both ways: discretion is entitled to a district 

court’s findings that § 285 attorney’s fees are not applicable, as much as discretion is owed to findings that they 

are applicable. As the Supreme Court explained, matters 

of attorney’s fees, and the effective contours illuminating 

this area, are committed to the sound discretion of the 

trial court. Id. at 1748 (“For reasons we explain in Octane, the determination whether a case is ‘exceptional’ 

under §285 is a matter of discretion. And as in our prior 

cases involving similar determinations, the exceptionalcase determination is to be reviewed only for abuse of 

discretion.”). In this case, because we do not believe that 

the district court based its ruling on an erroneous view of 

the law and we are not left with a definite and firm conCase: 15-1448 Document: 62-2 Page: 5 Filed: 02/01/2016
6 SITE UPDATE SOLUTIONS, LLC v. CBS CORP. 

viction that the district court erred in its assessment of 

the evidence or otherwise abused its discretion, we cannot 

say that the district court erred. For these reasons, we 

affirm. 

AFFIRMED

COSTS

Each party shall bear its own costs. 

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