Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-01275/USCOURTS-ca13-15-01275-0/pdf.json

Parties Involved:
Findthebest.com, Inc
Appellee
Lumen View Technology LLC
Appellant

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

LUMEN VIEW TECHNOLOGY LLC,

Plaintiff-Appellant

v.

FINDTHEBEST.COM, INC.,

Defendant-Appellee

______________________ 

2015-1275, 2015-1325

______________________ 

Appeals from the United States District Court for the 

Southern District of New York in No. 1:13-cv-03599-DLC, 

Senior Judge Denise Cote and 1:13-cv-03386-DLC, Senior 

Judge Denise Cote. 

______________________ 

Decided: January 22, 2016

______________________ 

 DAMIAN WASSERBAUER, Wasserbauer Law LLC, 

Collinsville, CT, argued for plaintiff-appellant. 

 CAROLYN V. JUAREZ, The Leventhal Law Firm, APC, 

San Diego, CA, argued for defendant-appellee. Also represented by JOSEPH S. LEVENTHAL. 

______________________ 

Before LOURIE, MOORE, and WALLACH, Circuit Judges. 

LOURIE, Circuit Judge. 

Case: 15-1275 Document: 35-2 Page: 1 Filed: 01/22/2016
2 LUMEN VIEW TECHNOLOGY LLC v. FINDTHEBEST.COM, INC. 

Lumen View Technology LLC (“Lumen View”) appeals 

from the decisions of the United States District Court for

the Southern District of New York finding the patent 

infringement case before it exceptional and awarding 

enhanced attorney fees to Findthebest.com, Inc. (“FTB”). 

Lumen View Tech., LLC v. Findthebest.com, Inc., 24 F. 

Supp. 3d 329 (S.D.N.Y. 2014); Lumen View Tech., LLC v. 

Findthebest.com, Inc., 63 F. Supp. 3d 321 (S.D.N.Y. 2014). 

Because the district court did not err in finding the case 

exceptional, but did not properly explain the calculation of 

its award of attorney fees, we affirm in part, vacate in 

part, and remand.

BACKGROUND

Lumen View is the exclusive licensee of U.S. Patent 

8,069,073 (“the ’073 patent”), which is directed to a method for facilitating bilateral and multilateral decisionmaking. The claims are directed to a method of matching 

parties, involving analyses of preference data from both a 

first class of parties and a second class of counterparties.

FTB operated a specialized search website with a 

comparison feature entitled “AssistMe” that provided 

users with personalized product and service recommendations. The AssistMe feature prompted the user with a 

series of questions about various attributes of the desired 

product or service, and provided a list of results based on 

the user’s inputted criteria. 

Lumen View filed suit in May 2013, alleging that FTB 

infringed the claims of the ’073 patent. On several occasions, FTB’s counsel informed Lumen View that FTB’s 

accused feature did not use a bilateral or multilateral 

preference matching process. Before receiving any discovery, Lumen View served its preliminary infringement 

contentions, including a claim chart identifying the allegedly infringing features of the AssistMe service. FTB 

moved to strike or modify the infringement contentions as 

insufficient, but the district court denied the motion.

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LUMEN VIEW TECHNOLOGY LLC v. FINDTHEBEST.COM, INC. 3

FTB then filed a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). Lumen 

View opposed the motion and included claim construction 

arguments in its opposition. The district court granted 

FTB’s motion for judgment on the pleadings, holding that 

the claims of the ’073 patent are directed to an abstract 

idea and therefore are invalid for failure to claim patenteligible subject matter under 35 U.S.C. § 101. The court 

found that claim construction was unnecessary for the 

§ 101 analysis.

FTB then moved for an award of attorney fees on the 

ground that the case was exceptional under 35 U.S.C. 

§ 285. The district court determined that the case was 

exceptional under the totality of the circumstances test 

outlined in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. __, 134 S. Ct. 1749 (2014). The court 

found that the suit was frivolous and objectively unreasonable, because the bilateral matching method of the 

’073 patent requires the preference data of two or more 

parties, and “the most basic” pre-suit investigation would 

have shown that the accused AssistMe feature only used 

the preference data of one party. Lumen View Tech., 24 F. 

Supp. 3d at 336. The court pointed out that even Lumen 

View’s claim construction briefing construed the claims as 

requiring two or more parties’ preference data. The court 

further found that Lumen View’s motivation for filing suit 

was to extract a nuisance settlement from FTB, and that 

Lumen View’s “predatory strategy” of baseless litigation 

showed the need for deterrence. Id. The court therefore 

found that the case was exceptional and granted the 

motion for fees.

The parties then submitted briefing directed to the 

amount of fees to be awarded. In its decision awarding 

the fees, the district court expounded upon several factors 

that supported enhancing the lodestar amount, including

“the need to deter the plaintiff’s predatory strategy, the 

plaintiff’s desire to extract a nuisance settlement, the 

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4 LUMEN VIEW TECHNOLOGY LLC v. FINDTHEBEST.COM, INC. 

plaintiff’s threats to make the litigation expensive, and 

the frivolous nature of the plaintiff’s claims.” Lumen View

Tech., 63 F. Supp. 3d at 326. Although these factors were 

already discussed in the court’s finding of exceptionality, 

the court specifically noted that “[i]n rare cases, the 

lodestar will be insufficient to deter baseless litigation.” 

Id. In this case, the court noted that the lodestar was 

uncharacteristically low due to the court’s expeditious 

resolution of the case. As a result, the court found that, 

here, the lodestar amount alone would be insufficient to 

deter similar misconduct by Lumen in the future, justifying an enhancement of the lodestar amount. The court 

accordingly awarded fees, with an enhancement by a 

multiplier of two.

Lumen View timely appealed from the district court’s 

finding of exceptionality and award of attorney fees. We

have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

DISCUSSION

Section 285 provides that “[t]he court in exceptional 

cases may award reasonable attorney fees to the prevailing party.” 35 U.S.C. § 285. We review all aspects of a 

district court’s § 285 determination for an abuse of discretion. Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 

572 U.S. __, 134 S. Ct. 1744, 1749 (2014). The statute 

imposes “one and only one constraint on district courts’ 

discretion to award attorney’s fees in patent litigation: 

[t]he power is reserved for ‘exceptional’ cases.” Octane

Fitness, 134 S. Ct. at 1755–56. 

A. Exceptionality

An “exceptional” case is “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, 134 S. Ct.

at 1756. “District courts may determine whether a case is 

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LUMEN VIEW TECHNOLOGY LLC v. FINDTHEBEST.COM, INC. 5

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

The determination whether a case is “exceptional” is 

indisputably committed to the discretion of the district 

court. Highmark, 134 S. Ct. at 1748. 

Lumen View argues that the case was not exceptional 

because its actions in asserting its patent rights were 

appropriate and reasonable. Lumen View maintains that 

it conducted a pre-suit investigation compliant with Rule 

11, satisfied all pleading requirements, and consistently

asserted infringement of a presumptively valid patent. 

Lumen View faults the district court for showing a clear 

bias by making unsupported factual findings about its 

settlement offers, its litigation against other defendants, 

and the reasonableness of the offered licensing fee. 

Moreover, Lumen View asserts, the court improperly 

found noninfringement without a claim construction

hearing and decision, and the noninfringement determination was the basis for the court’s flawed assessment of 

the infringement case as frivolous and unreasonable. 

FTB responds that the district court, as directed by 

Octane Fitness, considered the totality of the circumstances, based on extensive record evidence, in order to find the 

case exceptional. Because Lumen View failed to provide 

evidence of its pre-filing investigation and infringement 

assessment to the district court at the proper time, FTB 

asserts that Lumen View waived any argument of reasonable conduct. FTB further counters that the presumption of validity does not excuse a baseless claim of 

infringement. FTB also disputes that a claim construction hearing and decision were necessary because the 

court found noninfringement using Lumen View’s own 

proposed constructions. 

We decline to find an abuse of discretion by the district court in finding the case to be exceptional under 

§ 285 and in deciding to award attorney fees. Even if 

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6 LUMEN VIEW TECHNOLOGY LLC v. FINDTHEBEST.COM, INC. 

Lumen View’s litigation conduct was not quite sanctionable, the court reasonably determined that the case was 

exceptional. See Octane Fitness, 134 S. Ct. at 1757 (“[A] 

district court may award fees 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.”). The allegations of 

infringement were ill-supported, particularly in light of 

the parties’ communications and the proposed claim 

constructions, and thus the lawsuit appears to have been 

baseless. Claim construction was unnecessary before 

finding noninfringement in this case, especially because

Lumen View conceded that the claims require preference 

data from multiple parties. We therefore affirm the

district court’s finding of exceptionality. 

B. Calculation of Attorney Fee Award

The determination of reasonable attorney fees is also 

“a matter that is committed to the sound discretion” of a 

district court judge. Perdue v. Kenny A. ex rel. Winn, 559 

U.S. 542, 558 (2010). We therefore also review the calculation of an attorney fee award under § 285 for an abuse 

of discretion.

In calculating an attorney fee award, a district court 

usually applies the lodestar method, which provides a 

presumptively reasonable fee amount, id. at 554, by 

multiplying a reasonable hourly rate by the reasonable 

number of hours required to litigate a comparable case, 

id. at 551. This method has been characterized as “readily administrable” and “objective,” but “not perfect” and 

“never intended to be conclusive in all circumstances.” Id.

at 551–52, 554. 

We have noted that “although the amount the client 

paid the attorney is one factor for the court to consider in 

determining a reasonable fee, it does not establish an 

absolute ceiling.” Junker v. Eddings, 396 F.3d 1359, 1365 

(Fed. Cir. 2005). In “rare” and “exceptional” cases, a 

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LUMEN VIEW TECHNOLOGY LLC v. FINDTHEBEST.COM, INC. 7

district court may enhance the lodestar amount based on 

various factors, provided they are not adequately taken 

into account by the lodestar calculation. Bywaters v. 

United States, 670 F.3d 1221, 1229 (Fed. Cir. 2012) (citing

Pennsylvania v. Del. Valley Citizens’ Council for Clean Air

(Del. Valley I), 478 U.S. 546, 564–65 (1986); Perdue, 559 

U.S. at 552); see also Pennsylvania v. Del. Valley Citizens’ 

Council for Clean Air (Del. Valley II), 483 U.S. 711, 728 

(1987) (noting that enhancement of lodestar can be justified in exceptional cases). 

Lumen View argues that the district court misapplied 

the Octane Fitness factors to the determination of enhancing fees because those factors should only apply to the 

exceptionality analysis. Allowing double consideration of 

those factors, Lumen View contends, would mean that 

exceptional cases will always result in enhanced fee 

awards. Lumen View moreover asserts that Octane 

Fitness and § 285 only authorize the award of reasonable

fees, not the enhancement of fee awards. Lumen View 

also emphasizes that unlike the punitive purpose of 

enhancing damages under § 284, the award of attorney 

fees under § 285 is only intended to be compensatory. 

Because deterrence is already factored in by the award of 

attorney fees in the first place, Lumen View argues that 

enhancing that award as a further deterrent would be 

unreasonable. Lumen View also disputes whether the 

court gave any reasonable explanation for the specific 

multiplier of two for enhancement.

FTB responds that the lodestar amount may be adjusted in rare and exceptional circumstances in which it 

does not adequately account for a factor in determining a 

reasonable fee, and this case represents such a circumstance because of Lumen View’s egregious conduct. FTB 

disagrees that § 284 jurisprudence would be necessarily 

implicated by allowing enhancement under § 285, particularly because Octane Fitness made the § 285 standard 

more flexible and thus not analogous to the more restricCase: 15-1275 Document: 35-2 Page: 7 Filed: 01/22/2016
8 LUMEN VIEW TECHNOLOGY LLC v. FINDTHEBEST.COM, INC. 

tive § 284 standard. FTB also posits that enhancement of 

the lodestar amount may still constitute “reasonable” 

attorney fees. Moreover, FTB emphasizes the intended 

compensatory and deterrent effects of the enhancement, 

as shown by the district court’s specific statement that the 

enhancement was not punitive. FTB contends that the 

record and the district court’s opinion provided sufficient 

support for the multiplier of two: the expedited schedule 

contributed to the lower-than-expected lodestar amount, 

and any enhancement had to be large enough to serve the

purpose of deterrence, but the overall amount had to 

remain reasonable. FTB also claims that the court’s 

selected multiplier is bolstered by objective evidence of 

the average range of costs for similar litigation.

We agree with Lumen View that the district court 

failed to provide a proper rationale to justify enhancing 

the attorney fee award by a multiplier of two. The district 

court justified its award based on the specific circumstances of the case, the court’s proactive case management and expeditious resolution on the merits, which 

resulted in an “extremely low” lodestar. Lumen View 

Tech., 63 F. Supp. 3d at 326–27. If the court had adopted 

Lumen View’s proposed schedule, it stated, FTB would 

have reasonably incurred “significantly greater” attorney 

fees. Id. at 327. That analysis, however, appears to align 

more with the “results obtained” rationale disfavored by 

Supreme Court precedent, rather than being a justification for enhancing the lodestar determination. See Bywaters, 670 F.3d at 1230–31 (explaining that “the ‘results 

obtained’ factor is generally subsumed within the lodestar 

calculation and thus normally should not provide an 

independent basis for a departure from the lodestar

figure.” (citing Blum v. Stenson, 465 U.S. 886, 900 (1984); 

Perdue, 559 U.S. at 554)). 

The district court further reasoned that the calculated

lodestar amount would be insufficient to deter an ongoing 

predatory strategy of baseless litigation, and thus the 

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LUMEN VIEW TECHNOLOGY LLC v. FINDTHEBEST.COM, INC. 9

deterrent aspect of awarding fees would not be well 

served by a relatively low amount. But deterrence is not 

generally a factor to be considered in determining a 

reasonable attorney fee under § 285. Although deterrence 

may be a consideration when determining whether to 

award attorney fees, it is not an appropriate consideration 

in determining the amount of a reasonable attorney fee, 

which is principally based on the lodestar method. Unlike 

sanctions that are explicitly tied to an amount that suffices to deter repetition of conduct, see Fed. R. Civ. P. 

11(c)(4), § 285 only specifies “reasonable attorney fees” 

once an exceptional case is found. And the lodestar

method, yielding a presumptively reasonable attorney fee

amount, focuses on the counsel retained by the prevailing 

party: higher standing attorneys are theoretically reflected by higher rates charged, and more complex issues are 

reflected by more hours worked. 

Adjusting the lodestar has been condoned for situations in which the prevailing party’s attorney’s performance or conduct somehow is not factored into the 

lodestar calculation. Perdue, 559 U.S. at 554–56 (finding 

that enhancement may be appropriate where lodestar 

does not adequately measure attorney’s “true market 

value”; attorney is subjected to “extraordinary outlay of 

expenses” for protracted litigation; or “exceptional delay” 

in payment of fees). However, factors outside the realm of 

performance or conduct attributable to the prevailing 

party’s attorney have not been accepted as justifying an 

enhancement. See id., 559 U.S. at 554 (noting that “inferior performance by defense counsel, unanticipated defense concessions, unexpectedly favorable rulings by the 

court, an unexpectedly sympathetic jury, or simple luck” 

cannot justify an enhanced award). 

As such, we do not find proper support for the district 

court’s decision to enhance the lodestar amount by the 

specified multiplier as a reasonable fee award. Even 

armed with the deference accorded to a district court’s 

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10 LUMEN VIEW TECHNOLOGY LLC v. FINDTHEBEST.COM, INC. 

discretionary determinations, the court may enhance the 

lodestar only when it “fails to take into account a relevant 

consideration.” Bywaters, 670 F.3d at 1229; see also

Perdue, 559 U.S. at 554 (noting that enhancement may be 

appropriate when lodestar inadequately accounts for “a 

factor that may properly be considered in determining a 

reasonable fee”). Because we conclude that the expedited 

schedule and the deterrence purpose are unrelated to the 

suitability of compensation of FTB’s attorneys, and hence 

not relevant to enhancement of the lodestar, we conclude 

that the district court has not properly justified the 

amount awarded.

We therefore vacate the attorney fee award and remand the case for recalculating a reasonable attorney fee

award and determining whether there may be other 

issues open for consideration relating to attorney conduct. 

Whether the court wishes to utilize Rule 11 or any other 

statutory framework is of course up to the district court. 

We have considered the remaining arguments and conclude that they are without merit.

CONCLUSION

Because the district court did not abuse its discretion

in finding the case exceptional, we affirm the finding of 

exceptionality and the corresponding decision to award 

attorney fees. However, because the district court did not 

properly explain its determination of reasonable attorney 

fees, we vacate the attorney fee award and remand for 

further consideration in accordance with this opinion. 

AFFIRMED IN PART, VACATED IN PART, AND 

REMANDED

COSTS

No costs.

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