A Case That Really “Stands Out” in a Crowd: Judge Abrams Awards Attorneys’ Fees Where Plaintiff Ignores Pleading Deficiencies For Three Months
On December 10, 2020, United States District Judge Ronnie Abrams (S.D.N.Y.) granted Oath Inc. (“Oath”) and Quora, Inc. (“Quora”)’s motions for attorneys’ fees under 35 U.S.C. § 285. Section 285 permits courts to award reasonable attorneys’ fees to a prevailing party in exceptional cases. The standard was met here, according to Judge Abrams, most particularly because Plaintiff NetSoc, LLC (“NetSoc”) ignored deficiencies in its pleading for roughly three months after being informed of errors therein.
NetSoc brought suit for infringement of U.S. Patent No. 9,978,107 (the “’107 Patent”), entitled Method and System for Establishing and Using a Social Network to Facilitate People in Life Issues. The asserted claim, however, was not found in the ’107 Patent.
Oath and Quora moved to dismiss, arguing that “NetSoc had alleged infringement of patent claims that did not exist in the ’107 Patent.” Approximately three months after Defendants moved to dismiss, Plaintiff’s counsel conceded that the claim charts contained in the pleadings were incorrect. NetSoc voluntarily dismissed its claims arising from the ’107 Patent. And though the Court permitted NetSoc to amend its pleadings—this time alleging infringement of U.S. Patent No. 9,218,591—the Court also allowed Oath and Quora to move for attorneys’ fees.
“The court in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U.S. Code § 285
The case, according to the Court, was exceptional. The Supreme Court defines an “exceptional case” as “simply one that stands out from others including with respect to the substantive strength of a party’s litigating position . . . or the unreasonable manner in which the case was litigated.” Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 554 (2014).
On this score, the Court found that “[t]he most significant factor suggesting that this case is
‘exceptional’ is that Plaintiff ignored the deficiency in its pleading of the ’107 Patent claims for approximately three months after being informed of the error” and that “[t]his alone makes this case ‘stand out’ from others.” NetSoc’s various explanations for the mistake—which the Court construed as “inconsistent”—earned Plaintiff no credit.
The case is NetSoc, LLC v. Chegg Inc., et al., No. 18-cv-10262 (S.D.N.Y.).