Court Opinion

ID: 4527403
Source: CourtListenerOpinion
Date Created: 2020-04-21 16:00:42.58951+00
Date Added: 2024-06-11T12:18:03.124480
License: Public Domain

Case: 19-1283   Document: 101    Page: 1   Filed: 04/21/2020

    United States Court of Appeals
        for the Federal Circuit
                 ______________________

     DRAGON INTELLECTUAL PROPERTY, LLC,
                Plaintiff-Appellee

                            v.

                DISH NETWORK LLC,
                 Defendant-Appellant

                            v.

    ROBERT E. FREITAS, FREITAS & WEINBERG
            LLP, JASON S. ANGELL,
               Respondents-Appellees
              ______________________

                       2019-1283
                 ______________________

     Appeal from the United States District Court for the
 District of Delaware in No. 1:13-cv-02066-RGA, Judge
 Richard G. Andrews.

     ---------------------------------------

     DRAGON INTELLECTUAL PROPERTY, LLC,
                Plaintiff-Appellee

                            v.

                SIRIUS XM RADIO INC.,
                   Defendant-Appellant
Case: 19-1283    Document: 101   Page: 2    Filed: 04/21/2020

 2          DRAGON INTELLECTUAL PROP. v. DISH NETWORK LLC

                            v.

      JASON S. ANGELL, ROBERT E. FREITAS,
           FREITAS & WEINBERG LLP,
                Respondents-Appellees
               ______________________

                        2019-1284
                  ______________________

     Appeal from the United States District Court for the
 District of Delaware in No. 1:13-cv-02067-RGA, Judge
 Richard G. Andrews.
                 ______________________

                  Decided: April 21, 2020
                  ______________________

    KAI ZHU, Dragon Intellectual Property, LLC, Los Altos,
 CA, for plaintiff-appellee.

      JAMIE ROY LYNN, Baker Botts, LLP, Washington, DC,
 argued for defendant-appellant DISH Network LLC. Also
 represented by LAUREN J. DREYER; GEORGE HOPKINS GUY,
 III, Palo Alto, CA; ALI DHANANI, MICHAEL HAWES, Houston,
 TX.

     MARK BAGHDASSARIAN, Kramer Levin Naftalis &
 Frankel LLP, New York, NY, argued for defendant-appel-
 lant Sirius XM Radio Inc. Also represented by SHANNON
 H. HEDVAT.

    ROBERT E. FREITAS, Freitas & Weinberg LLP, Redwood
 Shores, CA, argued for respondents-appellees. Also repre-
 sented by RACHEL KINNEY, DANIEL J. WEINBERG.

     ALEXANDRA     HELEN    MOSS,    Electronic   Frontier
Case: 19-1283    Document: 101     Page: 3   Filed: 04/21/2020

 DRAGON INTELLECTUAL PROP. v. DISH NETWORK LLC             3

 Foundation, San Francisco, CA, for amicus curiae Elec-
 tronic Frontier Foundation.
                  ______________________

     Before LOURIE, MOORE, and STOLL, Circuit Judges.
 MOORE, Circuit Judge.
      DISH Network LLC and Sirius XM Radio Inc. (SXM)
 (collectively, Appellants) appeal the United States District
 Court for the District of Delaware’s order denying Appel-
 lants’ motions for attorneys’ fees under 35 U.S.C. § 285.
 Because the district court erred in holding that Appellants
 are not prevailing parties under § 285, we vacate and re-
 mand.
                        BACKGROUND
     Dragon Intellectual Property, LLC separately sued
 DISH, SXM and eight other defendants 1 in December 2013,
 alleging infringement of claims of U.S. Patent No.
 5,930,444. On December 23, 2014, DISH filed a petition
 seeking inter partes review of the ’444 patent. The Board
 instituted review on July 17, 2015 and subsequently
 granted SXM’s request for joinder under 35 U.S.C. § 315(c).
 The district court stayed proceedings as to DISH and SXM
 pending the resolution of the Board’s review but proceeded
 with claim construction as to the other eight defendants.
     After a consolidated claim construction hearing, the
 district court issued a claim construction order on Septem-
 ber 14, 2015. Following the claim construction order,
 Dragon, DISH, SXM, and the other eight defendants

     1   Dragon also sued Apple, Inc., AT&T Services, Inc.,
 Charter Communications Inc., Comcast Cable Communi-
 cations LLC, Cox Communications Inc., DirecTV LLC,
 Time Warner Cable Inc., and Verizon Communications Inc.
 in separate complaints.
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 4           DRAGON INTELLECTUAL PROP. v. DISH NETWORK LLC

 stipulated to noninfringement as to the products accused
 of infringing claims of the ’444 patent. On April 27, 2016,
 the district court entered judgment of noninfringement in
 favor of all defendants, including DISH and SXM, based on
 the district court’s claim construction order and the parties’
 stipulation. See, e.g., Dragon Intellectual Prop., LLC v.
 DISH Network LLC, No. 1:13-cv-02066-RGA (D. Del. Apr.
 27, 2016), ECF No. 117; Dragon Intellectual Prop., LLC v.
 Sirius XM Radio Inc., No. 1:13-cv-02067-RGA (D. Del. Apr.
 27, 2016), ECF No. 130. On June 15, 2016, in the parallel
 inter partes review, the Board issued a final written deci-
 sion holding unpatentable all asserted claims. See Dish
 Network L.L.C. v. Dragon Intellectual Prop., LLC, No.
 IPR2015-00499, 2016 WL 3268756 (PTAB June 15, 2016).
      In August 2016, DISH and SXM moved for attorneys’
 fees under 35 U.S.C. § 285 and 28 U.S.C. § 1927. Before
 the motions were resolved, Dragon appealed both the dis-
 trict court’s judgment of noninfringement and the Board’s
 final written decision. On November 1, 2017, we affirmed
 the Board’s decision and dismissed the parallel district
 court appeal as moot. See Dragon Intellectual Prop., LLC
 v. Dish Network LLC, 711 F. App’x 993, 998 (Fed. Cir.
 2017); Dragon Intellectual Prop., LLC v. Apple Inc., 700 F.
 App’x 1005, 1006 (Fed. Cir. 2017). On remand, Dragon
 moved to vacate the district court’s judgment of nonin-
 fringement and to dismiss the case as moot. On September
 27, 2018, the district court vacated the judgment of nonin-
 fringement as moot but retained jurisdiction to resolve Ap-
 pellants’ fees motions. Dragon Intellectual Prop., LLC v.
 Apple, Inc., No. 1:13-cv-02058-RGA, 2018 WL 4658208, at
 *2–3 (D. Del. Sept. 27, 2018).
     On November 7, 2018, the district court denied the
 DISH and SXM motions for attorneys’ fees. Dragon Intel-
 lectual Prop., LLC v. DISH Network, LLC, No. 1:13-cv-
 02066-RGA, 2018 WL 5818533, at *1–2 (D. Del. Nov. 7,
 2018). The district court agreed that DISH and SXM
 “achieve[d] a victory” over Dragon but held that neither
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 DRAGON INTELLECTUAL PROP. v. DISH NETWORK LLC               5

 DISH nor SXM is a prevailing party because they were not
 granted “actual relief on the merits.” Id. at *1 & n.1. The
 district court further stated that “success in a different fo-
 rum is not a basis for attorneys’ fees” in the district court.
Id. at *1 n.1. 2 DISH and SXM appeal, arguing that the
 district court erroneously held that they are not prevailing
 parties. We have jurisdiction pursuant to 28 U.S.C.
 § 1295(a)(1). 3
                         DISCUSSION
     A district court “in exceptional cases may award rea-
 sonable attorney fees to the prevailing party.” 35 U.S.C.
 § 285. We review a district court’s determination of
 whether a litigant is a prevailing party under § 285 de
 novo, applying Federal Circuit law. See Highway Equip.
 Co. v. FECO, Ltd., 469 F.3d 1027, 1032 (Fed. Cir. 2006).
 Appellants argue the district court erred in holding that

     2    The district court also denied Appellants’ motions
 for attorneys’ fees under § 1927. Dragon Intellectual Prop.,
 LLC v. DISH Network LLC, No. 1:13-cv-02066-RGA, 2018
WL 5818533, at *2. Dragon has not challenged that aspect
 of the district court’s decision on appeal and has thus
 waived it.
      3   Under 28 U.S.C. § 1295(a)(1), we have jurisdiction
 over “an appeal from a final decision of a district court of
 the United States. . . .” The parties do not dispute that to-
 gether with the district court’s vacatur, the order denying
 the Appellants’ motions for fees resolved all matters before
 the district court. Accordingly, the district court’s order
 constitutes a final appealable decision under 28 U.S.C.
 § 1295(a)(1). See PPG Indus., Inc. v. Celanese Polymer Spe-
 cialties Co., Inc., 840 F.2d 1565, 1567 (Fed. Cir. 1988) (“A
 ‘final decision’ generally is one which ends the litigation on
 the merits and leaves nothing for the court to do but exe-
 cute the judgment”).
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 6           DRAGON INTELLECTUAL PROP. v. DISH NETWORK LLC

 they are not prevailing parties under § 285 because they
 were not awarded “actual relief on the merits.” We agree.

      We have held that “a defendant can be deemed a pre-
 vailing party even if the case is dismissed on procedural
 grounds rather than on the merits.” See, e.g., B.E. Tech.,
 L.L.C. v. Facebook, Inc., 940 F.3d 675, 678–79 (Fed. Cir.
 2019). In B.E. Technology, B.E. Technology sued Facebook,
 accusing it of patent infringement. Id. at 676. Facebook
 and two other parties that B.E. Technology had accused of
 infringement, Microsoft and Google, filed separate peti-
 tions for inter partes review of the asserted claims. Id. The
 district court stayed proceedings pending the Board’s re-
 view. Id. The Board held the asserted claims unpatentable
 in three final written decisions and B.E. Technology ap-
 pealed. Id. We affirmed the Board’s final written decision
 in the Microsoft inter partes review and dismissed the re-
 maining appeals as moot. Id. On remand, Facebook moved
 for judgment on the pleadings. Id. at 676–77. The district
 court instead dismissed the case as moot. Id. at 677.
      We held that “even though the mootness decision was
 made possible by winning a battle on the merits before the
 PTO,” Facebook was a prevailing party because it “rebuffed
 B.E.’s attempt to alter the parties’ legal relationship in an
 infringement suit.” Id. at 679. Although B.E. Technology
 involved the interpretation of prevailing party under Fed.
 R. Civ. P. 54(d), we see no meaningful distinction that
 would warrant a different interpretation under § 285. See
 e.g., B.E. Tech., 940 F.3d at 677 (“We interpret the term
 [prevailing party] consistently between different fee-shift-
 ing statutes, and between Rule 54(d) and 35 U.S.C.
 § 285.”). Like in B.E. Technology, Appellants succeeded in
 invalidating the asserted claims before the Board. After
 we affirmed the Board’s decision, the district court vacated
 the judgment of noninfringement as moot. Therefore, as in
 B.E. Technology, Appellants successfully rebuffed Dragon’s
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 DRAGON INTELLECTUAL PROP. v. DISH NETWORK LLC              7

 attempt to alter the parties’ legal relationship in an in-
 fringement suit.
     At oral argument, Dragon attempted to distinguish
 B.E. Technology on the basis that the district court here
 vacated the judgment of noninfringement previously en-
 tered in favor of Appellants instead of merely dismissing
 the case as moot. 4 Oral Arg. 18:10–21:50. But such a dis-
 tinction elevates form over substance and is inconsistent
 with the reasoning set forth in B.E. Technology. See 940
F.3d at 679 (holding that the distinction between a dismis-
 sal for mootness and a dismissal for lack of standing does
 not warrant a different result). The judgment of nonin-
 fringement was vacated only because the Appellants suc-
 cessfully invalidated the asserted claims in a parallel inter
 partes review proceeding, rendering moot Dragon’s in-
 fringement action. If anything, Appellants’ success in ob-
 taining a judgment of noninfringement, although later
 vacated in view of Appellants’ success in invalidating the
 asserted claims, further supports holding that they are pre-
 vailing parties. Therefore, consistent with our decision in
 B.E. Technology, we hold that DISH and SXM are prevail-
 ing parties. Accordingly, we vacate and remand the district
 court’s order denying Appellants’ motions for attorneys’
 fees under 35 U.S.C. § 285.
     Appellants further argue that fees awarded under
 § 285 should include fees incurred in related proceedings,
 including parallel proceedings under the Leahy–Smith
 America Invents Act and appeals therefrom, and that fees
 under § 285 should be awarded against counsel of record as

     4  Dragon’s remaining arguments are directed to
 overturning B.E. Technology. We cannot consider these ar-
 guments at the panel stage as we are bound to follow the
 precedential decisions of prior panels. See CCA Assocs. v.
 United States, 667 F.3d 1239, 1244 (Fed. Cir. 2011).
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 8          DRAGON INTELLECTUAL PROP. v. DISH NETWORK LLC

 jointly and severally liable with a party. Appellants re-
 quest that we resolve these legal issues prior to any re-
 mand. Though we see no basis in the Patent Act for
 awarding fees under § 285 for work incurred in inter partes
 review proceedings that the Appellants voluntarily under-
 took, we remand to the district court for initial considera-
 tion of Appellants’ fee motions. We note that fees are
 awarded only in exceptional cases, and not to every prevail-
 ing party. Should the district court determine that this is
 not an exceptional case, there would be no need to reach
 the additional issues regarding fee-shifting in inter partes
 reviews or joint and several liability of counsel. For this
 reason, we decline counsel’s request that we resolve these
 issues in the first instance.
                        CONCLUSION
     We have considered the parties’ remaining arguments
 and find them unpersuasive. For the foregoing reasons, we
 vacate and remand the district court’s order denying Ap-
 pellants’ motions for attorneys’ fees under 35 U.S.C. § 285.
                VACATED AND REMANDED
                            COSTS
     Costs to Appellants.