United States Court of Appeals 

for the Federal Circuit ______________________ 

ADJUSTACAM, LLC,

Plaintiff-Appellee

v.

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

ROSEWILL, INC.,

Defendants-Appellants

SAKAR INTERNATIONAL, INC.,

Defendant

______________________ 

2016-1882

______________________ 

Appeal from the United States District Court for the 

Eastern District of Texas in No. 6:10-cv-00329-JRG, 

Judge J. Rodney Gilstrap.

______________________ 

Decided: July 5, 2017

______________________ 

JOHN J. EDMONDS, Collins, Edmonds, Pogorzelski, 

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

STEPHEN F. SCHLATHER.

MARK A. LEMLEY, Durie Tangri LLP, San Francisco, 

CA, argued for defendants-appellants. Also represented 

by KENT E. BALDAUF, JR., DANIEL H. BREAN, BRYAN P.
2 ADJUSTACAM, LLC v. NEWEGG, INC. 

CLARK, The Webb Law Firm, Pittsburgh, PA; RICHARD 

GREGORY FRENKEL, Latham & Watkins LLP, Menlo Park, 

CA. 

______________________ 

Before REYNA, MAYER, and HUGHES, Circuit Judges.

REYNA, Circuit Judge. 

AdjustaCam sued Newegg and dozens of other defendants for patent infringement. Although AdjustaCam 

voluntarily dismissed most defendants early in the litigation, it continued to litigate against Newegg, including

through a Markman order and extended expert discovery. 

Just before summary judgment briefing, AdjustaCam 

voluntarily dismissed its infringement claims against 

Newegg with prejudice. Newegg then filed a motion for 

attorneys’ fees. The district court denied Newegg’s motion, and Newegg appealed to this court. We remanded to 

the district court in light of intervening Supreme Court 

precedent. On remand, the district court again denied 

Newegg’s motion for fees. Newegg then filed this appeal. 

Because the district court erred in denying Newegg’s 

motion, we reverse. 

BACKGROUND

A. The ’343 Patent

AdjustaCam, LLC is the exclusive licensee of U.S. Patent No. 5,855,343 (“’343 patent”), which issued in 1999

and is entitled “Camera Clip.” The ’343 patent discloses a 

camera clip that supports a camera both on a flat surface 

and when attached to a computer monitor. The ’343 

patent includes a figure of the camera clip: 
ADJUSTACAM, LLC v. NEWEGG, INC. 3

J.A. 164. Claim 1 of the ’343 patent provides:

1. Apparatus for supporting a camera, having a 

lens, on any generally horizontal, substantially 

planar surface and on an object having a first surface and a second surface and an edge intersecting 

the first surface and the second surface, comprising: 

a. a hinge member adapted to be rotatably attached to the camera, said camera, when the 

hinge member is so attached, rotating, about a 

first axis of rotation, relative to said hinge member; and

b. a support frame rotatably attached to said 

hinge member and configured to support said 

hinge member on the surface and the object, said 

hinge member rotating about a second axis of rotation relative to said support frame, said first axis of rotation being generally perpendicular to said 

second axis of rotation, said second axis of rotation being substantially parallel to the first surface when said hinge member is supported on the

object, said support frame having a first disposition positioned on said generally horizontal, substantially planar surface, and said support frame 

having a second disposition attached to the object 

when said first surface and said second surface 

are inclined from a generally horizontal orientation, the camera being maintained adjacent said 

edge in said second disposition of said support 

frame. 

J.A. 169–170 (col. 6 l. 49–col. 7 l. 6) (relevant terms emphasized). 
4 ADJUSTACAM, LLC v. NEWEGG, INC. 

B. Newegg’s Accused Products 

Unlike the invention disclosed in the ’343 patent, 

Newegg’s accused products use a ball-and-socket joint, 

which facilitates rotation about multiple axes. See J.A. 6. 

In its original order denying Newegg’s motion for fees, the 

district court noted that “the products do not have a pure 

ball-and-socket joint but rather a modified ball-and-socket 

joint with a channel that restricts movement.” Id. Thus, 

although Newegg’s products are constrained in some 

movements, they still allow rotation about more than one 

axis. The district court never found that Newegg’s products rotate about a single axis.

C. District Court Litigation

In July 2010, AdjustaCam sued Newegg, Inc., 

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

“Newegg”) and dozens of other defendants for infringement of the ’343 patent. AdjustaCam moved to dismiss 

most defendants from the litigation prior to claim construction. Many defendants settled for far less than the 

cost of litigation. See J.A. 6–7.

Almost two years later, in April 2012, the district 

court held a Markman hearing followed by the issuance of

a Markman order. The court determined that “the ‘rotatably attached’ terms do not require construction beyond 

what is contained in the claims.” J.A. 22. Nonetheless, 

it concluded the ’343 patent claims describe “rotatably 

attached” objects as rotating over a single axis. J.A. 20. 

The Markman order explained that “every reference to a 

‘rotatably attached’ object in the specification and claims

describes the attachment as permitting motion over a 

single axis of rotation,” and “[t]he claims plainly describe 

each ‘rotatably attached’ object as rotating about a single 

axis.” J.A. 21–22. 

Shortly after the Markman order, AdjustaCam settled 

with more defendants. However, AdjustaCam continued 
ADJUSTACAM, LLC v. NEWEGG, INC. 5

to press its case against Newegg. The case proceeded into 

expert discovery. 

In September 2012, just prior to summary judgment 

briefing, AdjustaCam moved to dismiss with prejudice its 

claims against Newegg, contingent on Newegg’s right to 

seek fees after dismissal. In October 2012, Newegg 

moved for a declaration of exceptional case under 35 

U.S.C. § 285 and an award of fees. Newegg argued that 

this case is exceptional because AdjustaCam brought an

objectively baseless lawsuit in bad faith. J.A. 1779. 

According to Newegg, AdjustaCam brought the case 

simply to extract nuisance-value settlements unrelated to 

the merits and far below the costs of defense. Id. Newegg 

further contended that AdjustaCam had no reasonable 

expectation of success on its infringement claims against 

Newegg, particularly after the district court’s Markman

order. Id. Newegg argued that even after the Markman

order, AdjustaCam pressed its frivolous infringement 

claims, continued to demand a nuisance settlement, and 

prolonged the litigation in bad faith. Id. 

Specifically, Newegg pointed out that its allegedly infringing products use ball-and-socket joints. J.A. 1786. 

Comparing Newegg’s ball-and-socket products to the ’343 

patent claims demonstrates the spurious nature of AdjustaCam’s infringement allegations. Id. And, according 

to Newegg, the district court’s Markman order makes 

AdjustaCam’s position even more untenable. AdjustaCam’s infringement allegations against Newegg, 

therefore, were objectively baseless. Id. Finally, Newegg 

accused AdjustaCam of serving a substantively different 

“supplemental” infringement report the day of its in-
6 ADJUSTACAM, LLC v. NEWEGG, INC. 

fringement expert’s deposition, without explaining the 

delay. J.A. 8; see also J.A. 1789.1

The district court denied Newegg’s motion. The court

wrote that “[i]f the ball and socket joint truly restricts the 

range of movement such that it cannot rotate about 

multiple axes, the constrained ball and socket joint could 

meet the claim limitation which requires the hinge member being rotatably attached to the camera in a single axis 

of rotation.” J.A. 6. “Since one could reasonably argue 

[Newegg’s] products meet the ‘rotatably attached’ limitation, AdjustaCam’s infringement theories are not objectively baseless.” Id. Thus, the court found that 

“AdjustaCam’s continued assertion of its infringement 

claims post-Markman do not amount to litigation misconduct.” J.A. 8.

The court further concluded that the action was not 

brought in bad faith or for an improper purpose. Id. It 

explained that although AdjustaCam asserted relatively 

low damages against many defendants, patent infringement cases do not contain a “minimum damages requirement.” J.A. 7. The court discerned “no other evidence”

aside from low settlement amounts that AdjustaCam filed 

the suit solely to collect nuisance-value settlements. Id. 

The court also rejected Newegg’s argument that AdjustaCam’s per-unit settlement amounts were so varied 

(between $0.10 per unit and $161.29 per unit) that “AdjustaCam’s royalty was simply ‘bogus.’” J.A. 9. Newegg 

might disagree with AdjustaCam’s damages calculations, 

but the district court found “no evidence” that AdjustaCam’s methodology “was so outrageous and unreliable to support an award of attorney fees.” Id.

 

1 Newegg spent over $350,000 in attorneys’ fees and 

expert fees to defend the lawsuit and file its motion for 

fees. J.A. 3808.
ADJUSTACAM, LLC v. NEWEGG, INC. 7

Finally, the court determined that Newegg “failed to 

prove AdjustaCam acted inappropriately in this case.” 

J.A. 8. It credited AdjustaCam’s explanation that it

inadvertently served a draft expert report to Newegg, and 

that AdjustaCam served a last-minute supplemental 

expert report because it did not realize its mistake until 

the day of its expert’s deposition. J.A. 8–9. “In the absence of any other dubious behavior,” the court wrote, 

“there is no reason to find AdjustaCam acted inappropriately here.” J.A. 9. 

D. First Appeal

In September 2013, Newegg appealed the district 

court’s denial of its motion for fees. In April 2014, the 

Supreme Court issued its decision in Octane Fitness, LLC 

v. Icon Health & Fitness, Inc., 134 S. Ct. 1749 (2014)

(clarifying what constitutes an “exceptional” case under 

§ 285). Soon thereafter, we remanded the case back to the 

district court for reconsideration in light of Octane. See 

AdjustaCam, LLC v. Newegg, Inc., 626 F. App’x 987, 991

(Fed. Cir. 2015) (“Remand Order”). In that order, we

noted that Octane “did not simply relax the standard 

under § 285. It substantially changed the analysis.” Id.

at 990. We declined to substitute our judgment for that of 

the district court in applying these new standards and 

afforded the district court an opportunity to evaluate 

whether this case is “exceptional” under the new Octane

standard. Id. at 991. We also noted that Newegg’s

“arguments appear to have significant merit, particularly 

[its] argument that AdjustaCam’s continued pursuit of its 

infringement claims after the district court construed the 

claim term ‘rotatably attached’ was baseless.” Id. at 991 

n.2. 

E. Proceedings On Remand

Upon remand, the case was reassigned to a new district court judge due to the original judge’s retirement. 

The new judge allowed re-briefing on the § 285 issue 
8 ADJUSTACAM, LLC v. NEWEGG, INC. 

under Octane. In January 2016, AdjustaCam filed a 

response to Newegg’s renewed motion for fees that contained a supplemental report by AdjustaCam’s expert, 

Dr. Muskivitch. J.A. 3937–75. AdjustaCam concedes that 

the supplemental report contains infringement arguments 

not raised before the original judge. At the January 26, 

2016 oral argument, AdjustaCam explained that “after 

the fact, Newegg . . . really attacked this issue [of singleaxis rotation], and so there really wasn’t that much of a 

record for it in front of [the first district judge] and ultimately the Federal Circuit. So we supplemented that 

record with . . . declarations to try and provide some 

additional explanation.” J.A. 4312; see also J.A. 4313 

(AdjustaCam arguing that the supplemental Muskivitch 

declaration provided “more reasoned explanations” and 

“tried to sum things up”).

In a March 2016 order, the district court wrote that 

“[a]lthough the standard for evaluating exceptionality 

under § 285 has changed, . . . the facts of the case themselves remain the same” as when the previous judge

initially rejected Newegg’s fee request. J.A. 1_5. The 

court went on to summarize 11 separate factual findings 

from the original judge’s opinion. J.A. 1_5–1_6. One such 

finding was that AdjustaCam’s methodology of calculating 

damages was not “so outrageous and unreliable to support 

an award of attorney fees.” J.A. 1_6. The court stated

that “[t]he determination of whether a case is ‘exceptional’ 

under § 285 necessarily involves intangible elements 

uniquely available to the district court that has lived with 

the case for a period of months or years.” Id. It acknowledged that a Federal Circuit panel found “significant 

merit” in Newegg’s argument. Id. n.6. The court, however, wrote that it “endeavored not to circumvent by hindsight the judgments and in-person evaluations that the 

trial judge who dealt with this case in the courtroom 

arena was best positioned to have made, considering both 

the facts as well as the unavoidable human intangibles 
ADJUSTACAM, LLC v. NEWEGG, INC. 9

that ‘a totality of the circumstances’ contemplates.” Id. It

concluded that AdjustaCam’s infringement and validity 

arguments were not so weak, or its litigation conduct so 

poor, to constitute an exceptional case. J.A. 1_7. On this 

basis, the district court denied Newegg’s motion for fees.

Newegg timely appeals. We have jurisdiction under 28 

U.S.C. § 1295(a)(1).

DISCUSSION

A. Standard Of Review

“The court in exceptional cases may award reasonable 

attorney fees to the prevailing party.” 35 U.S.C. § 285. 

We review for abuse of discretion the denial of attorneys’ 

fees under § 285. Highmark Inc. v. Allcare Health Mgmt. 

Sys., Inc., 134 S. Ct. 1744, 1747 (2014). We also review 

for abuse of discretion a district court’s use of its inherent 

authority to award or deny expert fees. MarcTec, LLC 

v. Johnson & Johnson, 664 F.3d 907, 921 (Fed. Cir. 2012). 

The Supreme Court has noted that § 285 “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, 134 S. Ct. at

1755–56. “[A]n ‘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.” Id. at 

1756. 

Despite this considerable latitude in making fees determinations, an appellate court may correct a district 

court’s legal or factual error. Highmark, 134 S. Ct. at 

1748 n.2. A district court abuses its discretion when its 

ruling rests on an erroneous legal conclusion or on a 

clearly erroneous assessment of the evidence. Id.; see also

Apple Inc. v. Samsung Elecs. Co., 809 F.3d 633, 639 (Fed. 

Cir. 2015). The court also abuses its discretion when it 
10 ADJUSTACAM, LLC v. NEWEGG, INC. 

makes a “‘clear error of judgment in weighing relevant 

factors.’” Bayer CropScience AG v. Dow AgroSciences 

LLC, 851 F.3d 1302, 1306 (Fed. Cir. 2017) (quoting Mentor Graphics Corp. v. Quickturn Design Sys., Inc., 150 

F.3d 1374, 1377 (Fed. Cir. 1998)).

B. The District Court Abused Its Discretion

We hold that the district court abused its discretion 

by not awarding fees to Newegg for two independent 

reasons: (1) it failed to follow our mandate on remand; 

and (2) its decision was based on “a clearly erroneous 

assessment of the evidence.” Highmark, 134 S. Ct. at 

1748 n.2. We recognize the deference owed to district 

courts in deciding fees motions. See Univ. of Utah v. MaxPlanck-Gesellschaft zur Foerderung der Wissenschaften 

e.V., 851 F.3d 1317 (Fed. Cir. 2017) (affirming decision 

not to award fees); Bayer, 851 F.3d at 1303 (affirming 

decision to award fees). Deference, however, is not absolute. Apple, 809 F.3d at 639; see also Highmark, 134 S. 

Ct. at 1748 n.2; Checkpoint Sys., Inc. v. All-Tag Sec. S.A., 

__ F.3d __, 2017 WL 2407853 (Fed. Cir. June 5, 2017) 

(reversing fee award); Rothschild Connected Devices 

Innovations, LLC v. Guardian Prot. Servs., Inc., __ F.3d 

__, 2017 WL 2407870 (Fed. Cir. June 5, 2017) (reversing 

decision not to award fees). When a district court bases 

its decision on a clearly erroneous view of the evidence, as 

it did here, the court abuses its discretion in denying fees.

1. Failure To Follow Mandate

The district court erred by ignoring our mandate “to

evaluate whether this case is ‘exceptional’ under the 

totality of the circumstances and a lower burden of proof” 

in the first instance. Remand Order, 626 F. App’x at 991. 

Instead of engaging in an independent analysis, the 

district court adopted the previous judge’s factual findings 

wholesale. See J.A. 1_5–1_6. The entirety of the court’s 

analysis based on those adopted fact-findings consists of 

three sentences: 
ADJUSTACAM, LLC v. NEWEGG, INC. 11

Having considered the totality of the circumstances, as reflected in the record and affording due 

weight to the previous in-person evaluations announced by [the previous judge] from his unique 

posture of having lived with this case and these 

parties, the Court concludes that this is not an 

“exceptional” case under § 285. The determination of whether a case is “exceptional” under § 285 

necessarily involves intangible elements uniquely 

available to the district court that has lived with 

the case for a period of months or years. After a 

careful review of the entirety of the record, as well 

as the parties’ arguments and additional briefing, 

the Court, in an exercise of its statutory grant of

discretion, does not find that AdjustaCam’s infringement and validity arguments were so weak,

or its litigation conduct so poor, as to make this 

case stand out from others.

J.A. 1_6.

Based on the circumstances presented here, the

wholesale reliance on the previous judge’s factfinding was 

an abuse of discretion. The court apparently felt constrained by its lack of “in-person evaluations that the trial 

judge who dealt with this case in the courtroom arena was 

best positioned to have made.” J.A. 1_6 n.6. But the 

court allowed additional briefing and held an oral argument; therefore, it had first-hand knowledge and inperson experience with the parties. Moreover, AdjustaCam filed a supplemental brief on remand filled with 

new infringement arguments. Thus, contrary to the 

district court’s conclusion, see J.A. 1_5, the facts had

changed since the case was before the original district 

judge.

We specifically instructed the judge on remand to 

“evaluate” the merits of Newegg’s motion in the first 

instance based on the new Octane standard, which did not 
12 ADJUSTACAM, LLC v. NEWEGG, INC. 

occur. We also expressed this court’s view that Newegg’s 

argument had “significant merit.” While the district court 

need not reveal its assessment of every consideration of 

§ 285 motions, it must actually assess the totality of the 

circumstances. The district court did not do this. In 

particular, there is no analysis of AdjustaCam’s continued 

“dubious” press of litigation in the totality of the circumstances under the new standard set in Octane. 

Our recent decision in University of Utah does not 

compel a different result. In Utah, we were “wary to wade 

in[to] [the] circumstantial waters” of weighing competing 

evidence related to the strength of a party’s litigating 

position. 851 F.3d at 1323. We noted that the district 

court is “in the best position to understand and weigh 

these issues,” that the district court “ha[s] no obligation to 

write an opinion that reveals her assessment of every 

consideration,” and reaffirmed that we do not secondguess such determinations. Id. 

This case is different from Utah because here, there is 

no evidence that the district court properly weighed the 

issues. We reiterate today that the district court is in the 

best position to weigh the evidence. When a district court 

makes a § 285 ruling based on independent evaluation of 

the evidence before it, we will continue to defer to that 

ruling. We will not defer, however, to conclusions based 

on a “clear error of judgment in weighing relevant factors.” Bayer, 851 F.3d at 1306. Here, the district court 

did not independently evaluate the evidence in view of the 

Supreme Court’s intervening precedent, which changed 

the standard by which § 285 motions are to be evaluated. 

For example, the district court failed to consider and 

include in its analysis AdjustaCam’s supplemental report 

that raised new infringement arguments for the first time 

on remand. It is not clear from the district court’s opinion whether it was aware that well after the merits phase 

of the case had ended, AdjustaCam raised new merits 

arguments in an attempt to rebut Newegg’s contention 
ADJUSTACAM, LLC v. NEWEGG, INC. 13

that AdjustaCam pursued objectively baseless litigation. 

Based on the foregoing, we find that the district court 

abused its discretion by failing to follow our mandate. 

2. Clearly Erroneous Factual Findings

The district court’s failure to follow our mandate is 

sufficient reason to find an abuse of discretion. Separate 

and apart from that issue, however, the district court’s 

clearly erroneous findings about the substantive strength 

of AdjustaCam’s case independently support reversal. 

The record developed over the past five years points to 

this case as standing out from others with respect to the 

substantive strength of AdjustaCam’s litigating position. 

Octane, 134 S. Ct. at 1756. Where AdjustaCam may have

filed a weak infringement lawsuit, accusing Newegg’s 

products of infringing the ’343 patent, AdjustaCam’s suit

became baseless after the district court’s Markman order, 

where the court found “that the claims of the ’343 patent 

describe ‘rotatably attached’ objects as rotating over a 

single axis.” J.A. 20. Indeed, the court found that 

“[e]very reference to a ‘rotatably attached’ object in the 

specification and claims describes the attachment as 

permitting motion over a single axis of rotation.” J.A. 21. 

Stated differently, the evidence proffered by AdjustaCam 

showed that AdjustaCam’s lawsuit was baseless.

The district court found that the strength of AdjustaCam’s litigation position was not exceptional because 

Newegg’s ball-and-socket products were constrained in 

such a way that AdjustaCam could reasonably argue they 

rotated on a single axis. J.A. 6. But AdjustaCam did not

advance that argument. Instead, AdjustaCam argued 

that the constraint on Newegg’s ball-and-socket joint 

limited the rotation to a single axis at a time. See J.A. 

482–83; see also J.A. 484 (acknowledging “two axes” but 

arguing “they are separate”). AdjustaCam did not introduce any evidence that Newegg’s ball-and-socket products 

were limited to a single axis of rotation. We find no 
14 ADJUSTACAM, LLC v. NEWEGG, INC. 

dispute that Newegg’s cameras rotate about at least two 

axes. As such, there is no possible way for Newegg’s 

products to infringe the ’343 patent. No reasonable 

factfinder could conclude that Newegg’s products infringe; 

therefore, AdjustaCam’s litigation position was baseless. 

These are traits of an exceptional case. The district 

court’s contrary conclusion was based on “a clearly erroneous assessment of the evidence.” Highmark, 134 S. Ct. 

at 1748 n.2. Fees are warranted. 

Octane disclosed another reason why this case is exceptional that was not considered by the district court: 

AdjustaCam litigated the case in an “unreasonable manner.” Octane, 134 S. Ct. at 1756. This measure of exceptionality is evident through AdjustaCam’s repeated use of 

after-the-fact declarations. In 2012, AdjustaCam served a 

new expert report on Newegg the day of that expert’s 

deposition. J.A. 8. AdjustaCam claims it did not realize

that it had inadvertently served a draft report until the 

day of the deposition. But as Newegg argued to the 

district court, had AdjustaCam served an earlier draft of

Dr. Muskivitch’s report on June 25, AdjustaCam would 

have been aware of this error when Newegg’s expert

served his rebuttal report on July 27, 2012. J.A. 1789. 

AdjustaCam certainly would have known of its error well

before Newegg’s expert’s deposition in August 2012. Id. 

The district court also failed to consider on remand

that AdjustaCam filed a supplemental declaration making

new infringement arguments. AdjustaCam cites its 

supplemental declaration dozens of times in its briefing 

before our court without ever disclosing the fact that the 

supplemental declaration was executed more than two 

years after the initial fees determination. Filing new 

declarations, especially without disclosing them as new on 

appeal, elongates the period of time that AdjustaCam has 
ADJUSTACAM, LLC v. NEWEGG, INC. 15

continued to press frivolous arguments.2 We agree with 

the district court that “in the absence of any other dubious 

behavior,” the late-served declaration might not warrant 

awarding fees. J.A. 9. But as we recognize today, the 

totality of the circumstances demonstrates other dubious 

behavior that, when considered collectively, warrants fees 

under § 285. The district court’s contrary finding—that 

there was an absence of what it termed “dubious behavior”—was clearly erroneous.

Finally, we take note of AdjustaCam’s damages model. We agree with the district court that there is no 

minimum damages requirement to file a patent infringement case. J.A. 7. Asserting seemingly low damages 

against multiple defendants—or settling with defendants 

for less than the cost of litigation—does not necessarily

make a case “exceptional” under § 285. But here, AdjustaCam asserted nuisance-value damages against many 

defendants, settled with them for widely varied royalty 

rates, and continued to press baseless infringement 

contentions well past an adverse Markman order and 

expert discovery. The original judge stated that AdjustaCam’s damages theory was not “so outrageous and 

unreliable to support an award of attorney fees,” J.A. 9, 

which the subsequent judge repeated, J.A. 1_6. Under 

the governing clearly erroneous standard of review, we 

would be inclined to affirm if AdjustaCam’s damages 

methodology were the only issue. In light of AdjustaCam’s frivolous infringement argument and unrea-

 

2 AdjustaCam’s failure to disclose its supplemental 

declaration on appeal occurred after the district court 

rendered its decision and thus is not dispositive of whether AdjustaCam unreasonably litigated the case before the 

district court. AdjustaCam’s behavior on appeal, however,

strengthens our conclusion that its litigation misconduct 

before the district court was not a one-off occurrence. 
16 ADJUSTACAM, LLC v. NEWEGG, INC. 

sonable manner of litigation, however, we conclude that

the district court clearly erred by failing to consider

AdjustaCam’s damages methodology as part of a totalityof-the-circumstances analysis. The irregularities in 

AdjustaCam’s damages model and the purported nuisance 

value of many of its settlements should have played a role

in the evaluation of whether this is case exceptional. 

CONCLUSION

The district court abused its discretion failing to follow our mandate to evaluate the totality of the circumstances under Octane in the first instance. Moreover, 

AdjustaCam filed a weak infringement case against 

Newegg that became objectively baseless after the district 

court’s Markman order. The district court’s determination that AdjustaCam could reasonably argue infringement post-Markman is based on clearly erroneous factfindings. AdjustaCam also unreasonably litigated the 

case by repeatedly serving expert reports and declarations

at the last minute. The pattern of low and erratic settlements, though not determinative, reinforces a conclusion 

of unreasonableness. The district court’s conclusion that 

AdjustaCam reasonably litigated this case was clearly 

erroneous. Based on the totality of these case-specific 

circumstances, we hold that the district court abused its 

discretion in denying Newegg’s motion for fees. 

We therefore reverse and remand for further proceedings consistent with this opinion, including the calculation of attorneys’ fees. 

REVERSED AND REMANDED

COSTS

Costs to Newegg.