Apple, Cisco Get $4.2 Million in Attorneys’ Fees in Patent Case

Apple Inc. was awarded over $2.3 million and Cisco Systems Inc. over $1.9 million in attorneys’ fees in California federal court for defending against a patent infringement suit that the court said should “never have been brought.”

Straight Path IP Group Inc. sued Apple, Cisco, and others for allegedly infringing four patents related to point-to-point internet communication. The Patent Trial and Appeal Board invalidated the relevant parts of the patents, but the Federal Circuit reversed, finding the PTAB had construed a patent term too broadly. The PTAB upheld the patents’ validity on remand under the narrower construction, and the Federal Circuit affirmed.

After the PTAB ruled for Straight Path it sued Apple and Cisco again, but argued for infringement based on the earlier broad claim construction. It “bears restating,” the court said, that “after maintaining the claims’ validity by arguing twice to the Federal Circuit for a narrow interpretation,” Straight Path “turned around and sued Apple and Cisco on a contrary broad interpretation” of the term.

“Indeed, during the prosecution of this suit on the broad interpretation, patent owner advanced its narrow interpretation to the Federal Circuit for the second time,” the court said. Straight Path was ordered to pay attorneys’ fees based on its contradictory arguments.

The court affirmed a special master’s $4.2 million attorneys’ fee recommendation. Straight Path argued the special master wrongly recommended that Apple and Cisco be reimbursed for defenses that didn’t specifically address the interpretation issue.

But the court disagreed because Straight Path’s “exceptional claims were the but for cause of those fees.” Apple and Cisco “were entitled to mount a comprehensive defense” against “claims that (again) should not have been brought,” the court said.

“What goes around comes around, and not always in expected ways,” the court said.

Straight Path also argued it shouldn’t have to pay Cisco because the Patent Act doesn’t contemplate an award based on a flat-fee arrangement with attorneys instead of a reasonable hourly rate. The Patent Act “mandates no specific calculation method and does not foreclose reimbursement of an alternate billing scheme like Cisco’s,” the court said.

“One month shy of four years old, these suits—which should never have been brought—are finally put to rest,” the court said.

Judge William Alsup wrote the opinion.

Russ August & Kabat represented Straight Path. Duane Morris LLP, Desmarais LLP, and Baker Botts LLP represented Cisco. Hogan Lovells US LLP represented Apple.

The case is Straight Path IP Group Inc. v. Cisco Sys. Inc., N.D. Cal., No. C 16-03463, 5/19/20.