LAW360
By Tiffany Hu
Law360 (May 18, 2020, 4:06 PM EDT) — The U.S. Supreme Court on Monday refused to take up an appeal by a patent licensing company founded by former WilmerHale and Kirkland & Ellis LLP partners over attorney fees it was slapped with after a failed patent lawsuit.
The high court denied a petition for writ of certiorari filed in March by Blackbird Tech LLC, in which it argued that the Federal Circuit misapplied the justices’ 2014 Octane Fitness decision when it agreed with a lower court that the patent licensing company was responsible for $363,000 in attorney fees for filing a frivolous patent suit.
The Octane Fitness ruling loosened the standards for determining exceptionality for patent cases, a necessary qualifier for saddling one party with its opponent’s fees.
Blackbird Tech had argued that the lower court, and then the Federal Circuit, improperly broadened the scope of the ruling by relying on “extraneous facts” like the number of lawsuits the company filed in the past.
“The Federal Circuit and district court’s reliance on these extraneous facts is particularly troubling since neither court ever evaluated any of those prior cases filed by petitioner and simply relied on the arbitrary number of cases that were filed,” the petition said. “The Federal Circuit, therefore, has sanctioned a dangerous expansion of [the law].”
But the justices denied the petition Monday without further explanation.
Blackbird Tech was ordered to pay Health In Motion’s attorney costs after suing the fitness equipment company over a home gym machine that the company claimed infringed one of its patents. Blackbird Tech later dropped the suit, but Health In Motion petitioned the court for the reimbursement of its costs and won.
The Federal Circuit upheld that decision in December, saying the district court was within its rights to find the case exceptional and that Blackbird Tech had “litigated the case in an unreasonable manner.”
Health In Motion waived its rights to respond to Blackbird Tech’s petition, court documents show.
In a statement to Law360, Blackbird CEO Wendy Verlander said Monday that the company was “disappointed, but not surprised that our petition was denied — very few are granted,” and emphasized the importance of the issue it had raised.
“When defendants or courts assume you are a bad actor not based on any misdeeds but, rather, simply because you are [a nonpracticing entity], ordinary actions may appear nefarious,” she said. “Blackbird was formed to help inventors and small companies, who have so few options today, realize value from their inventions. Our business model has repeatedly helped them do that.”
An attorney for Health In Motion did not immediately respond to a request for comment Monday. Blackbird Tech is represented in-house by Wendy H. Verlander and Jeffrey D. Ahdoot and Thomas M. Dunlap of Dunlap Bennett & Ludwig.
Health In Motion is represented by Willmore F. Holbrow of Buchalter PC.
The suit is Blackbird Tech LLC, dba Blackbird Technologies, Petitioner v. Health in Motion LLC, dba Inspire Fitness, et al., case number 19-1132, in the U.S. Supreme Court.
–Additional reporting by Nadia Dreid. Editing by Abbie Sarfo.