Eagle E-Type Speedster, photographed in the Ashdown Forest for Eagle E-Types, 10 July 2009. Image copyright James Lipman / http://www.jameslipman.com

By: Winifred E. Campbell and Christie McGuinness

The name’s Bond, James Bond. Those iconic words bring to mind the names Sean Connery, Pierce Bronson, Daniel Craig and of course, Jaguar. No Bond movie is complete without a phenomenal Jaguar to go along with the car chase scene.

Recently, Jaguar Land Rover North America (“Jaguar”) was awarded two million dollars ($2,000,000) in attorneys’ fees incurred in defending itself in a patent litigation: Vehicle Interface Technologies, LLC v. Jaguar Land Rover North America, LLC, Civil Action Nos. 12-1285-RGA and 14-339 RGA. Delaware District Court Judge Richard G. Andrews called the litigation “an exceptional case.” He concluded that plaintiff Vehicle Interface Technologies (“VIT”) knew that its case “was objectively baseless” as early as October, 2013, but continued to pursue Jaguar, even filing an appeal based upon the same “baseless” claims. VIT is a subsidiary of Empire IP, a non-practicing entity; i.e., a patent troll.

The Patent Act provides that “in exceptional cases [the court] may award reasonable attorney fees to the prevailing party.” 35 U.S.C. §285. In 2014, the Supreme Court revised what had been known as the ‘objectively baseless’ standard, making it easier to award fees, in part to battle baseless litigation by patent trolls. The Court declared an “exceptional case” to be “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.” The Court also reduced the evidence standard from clear and convincing to a preponderance of the evidence. Octane Fitness, LLC v Icon Health and Fitness, Inc. and Highmark Inc. v. Allcare Health Management Sys.

Generally, courts assess fees by determining a reasonable number of hours spent on a case and multiplying the hours by a reasonable hourly rate for attorneys in that geographic area. The court has discretion to adjust the fees based upon “rare” or “exceptional” circumstances, but it must provide specific evidence to support the adjustment.

Here, Judge Andrews cited several incidents of VIT’s conduct to support the ‘exceptional’ circumstances of this case. For example, VIT attempted to add seven Jaguar vehicles to its infringement contentions just two hours before the close of fact discovery. After Judge Andrews blocked that move, VIT filled a new suit targeting the seven vehicles. And most egregious, VIT was provided evidence of prior art and Jaguar’s invalidity contentions at least by October 2013, but VIT refused to withdrawal those claims forcing Jaguar to continue to incur fees.

As everyone knows, attorneys’ fees can become very expensive and can be particularly burdensome for a company that finds itself on the defense side of a litigation. However, it also is a principle of American jurisprudence that each party bears its own court costs, whether winner or loser. When a court exercises its discretion and balances equities by awarding fees, the Court is sending a loud message to the party paying fees. Given the burdened court system, no one wants to waste time and resources on cases that are frivolous.