from the United States District Court for the Central
District of California in No. 2:15-cv-04424-AG-AJW, Judge
Andrew J. Guilford.
Naidich, Mei & Mark LLP, Washington, DC, argued for
plaintiff-appellee. Also represented by Lei Mei, Richard
Hadorn, Philip Andrew Riley, Laurence M. Sandell.
Pia, Pia Anderson Moss Hoyt, Salt Lake City, UT, argued for
defendants-appellants. Also represented by Robert Aycock.
Moore, Wallach, and Taranto, Circuit Judges.
Technology Co., Ltd. ("Uniclass"), as well as
Electronic Technology Co., Ltd.; Airlink 101; Phoebe Micro,
Inc.; Broadtech International Co., Ltd., d/b/a Linkskey;
Black Box Corporation; and Black Box Corporation of
Pennsylvania (collectively the "customer
defendants") (all collectively "Appellants")
appeal the United States District Court for the Central
District of California's order denying Appellants'
motion for attorney fees. Because we hold the district court
did not abuse its discretion in declining to find this an
exceptional case under 35 U.S.C. § 285, we affirm.
and ATEN International Co., Ltd. ("ATEN") are
involved in making and selling keyboard-video-mouse switch
systems that allow a user to control multiple computers from
a single keyboard, video device, and mouse. In 2011, Uniclass
stopped making payments on a license agreement it entered
with ATEN in 2009. In 2014, ATEN sued Uniclass and the
customer defendants alleging infringement, seeking damages
and injunctive relief. Uniclass moved for summary judgment on
ATEN's lost profits theory of damages, which the district
court granted in April 2017. ATEN proceeded to trial based on
a reasonable royalty theory of damages, under which its
expert testified that the maximum recovery (not including its
requested treble damages) was $678, 337. At trial, a jury
found that Uniclass did not infringe the asserted claims of
U.S. Patent No. 8, 589, 141 or U.S. Patent No. 7, 640, 289.
It also found the asserted claims of the '141 patent
invalid. ATEN appealed various aspects of the September 2017
jury verdict separately in No. 18-1606, which we also decide
trial, Uniclass moved to declare this case exceptional under
35 U.S.C. § 285, arguing that ATEN did not conduct an
adequate pre-filing investigation, unnecessarily increased
the costs of claim construction, drastically increased
discovery costs by frequently changing counsel and
infringement positions, and engaged in unreasonable
litigation behavior requiring additional motion practice and
leading to an expensive and disproportionate trial. The
district court denied the motion.
timely appealed. We have jurisdiction under 28 U.S.C. §
§ 285, "[t]he court in exceptional cases may award
reasonable attorney fees to the prevailing party."
"[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."
Octane Fitness, LLC v. ICON Health & Fitness,
Inc., 572 U.S. 545, 554 (2014). District courts should
determine whether a case is exceptional on a case-by-case
basis, considering the totality of the circumstances.
Id. We review the district court's § 285
determination for abuse of discretion. Highmark Inc. v.
Allcare Health Mgmt. Sys., Inc., 572 U.S. 559, 561
(2014). "The abuse-of-discretion standard does not
preclude an appellate court's correction of a district
court's legal or factual error: 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 563 n.2
(internal quotation marks omitted).
focus their arguments on appeal on a theory that the district
court erred in not finding this case exceptional based on
ATEN's disregard for the "foundational policy"
of proportionate litigation. Appellants' Br. 15-16.
Appellants summarize ATEN's expenses as including over
$700, 000 in expert witness fees alone, without considering
other expenses including attorney fees. Appellants argue that
ATEN could recover, at most, $678, 337 in reasonable royalty
damages. See J.A. 902 at 7:20-8:4; J.A. 870 at
23:8-11; J.A. 923 at 90:14-15. Accordingly, Appellants argue
this case is exceptional because the cost of litigating the
case exceeded ATEN's potential ...