Petition for Writ of Certiorari — DISH Network L.L.C., Petitioner v. Dragon Intellectual Property LLC, et al.

Supreme Court briefJan 8, 2025

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No. 24-___

IN THE

Supreme Court of the United States

————

DISH NETWORK L.L.C.,

Petitioner,

DRAGON INTELLECTUAL PROPERTY, LLC;

ROBERT E. FREITAS; FREITAS & WEINBERG LLP,

Respondents.

————

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Federal Circuit

————

PETITION FOR A WRIT OF CERTIORARI

————

G. HOPKINS GUY III

BAKER BOTTS L.L.P.

1001 Page Mill Road

Building One, Suite 200

Palo Alto, CA 94304

(650) 739-7500

LAUREN J. DREYER

Counsel of Record

JAMIE R. LYNN

BAKER BOTTS L.L.P.

700 K Street, N.W.

Washington, DC 20001

lauren.dreyer@bakerbotts.com

(202) 639-7700

Counsel for Petitioner DISH Network L.L.C.

January 8, 2025

WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D.C. 20002

QUESTIONS PRESENTED

The Patent Act’s fee-shifting statute, 35 U.S.C.

§ 285, states: “The court in exceptional cases may

award reasonable attorney fees to the prevailing

party.”

The questions presented are:

1. Whether the Patent Act’s fee-shifting statute

allows a district court discretion to impose joint and

several liability for the fee award on a party’s attorney

whose actions substantially contribute to the

exceptionality of the case.

2. Whether the same fee-shifting statute allows a

district court discretion to award attorney’s fees

incurred by a prevailing accused infringer in a parallel

administrative proceeding to invalidate a patent.

PARTIES TO THE PROCEEDINGS BELOW

Petitioner (defendant-appellant below) is DISH

Network L.L.C.

Respondent (plaintiff-cross-appellant

Dragon Intellectual Property, LLC.

below)

Respondents (respondents-appellees below) are

Robert E. Freitas and Freitas & Weinberg LLP.

RULE 29.6 DISCLOSURE STATEMENT

DISH Network L.L.C. is a wholly owned subsidiary

of DISH DBS Corporation, a corporation with publicly

traded debt.

DISH DBS Corporation is a wholly owned subsidiary of DISH Network Corporation, which is a

wholly owned subsidiary of EchoStar Corporation, a

corporation with publicly traded equity (NASDAQ:

SATS).

Based solely on review of Form 13D and Form 13G

filings with the Securities and Exchange Commission,

no entity owns more than 10% of EchoStar Corporation’s stock other than BlackRock, Inc.

iii

RELATED PROCEEDINGS

This case is directly related to the following

proceedings in the U.S. District Court for the District

of Delaware, the U.S. Court of Appeals for the Federal

Circuit, and this Court:

 Dragon Intell. Prop., LLC v. DISH Network, LLC,

No. 1:13-CV-02066-RGA (D. Del. Nov. 7, 2018)

(judgment denying motion for attorney fees);

 Dragon Intell. Prop., LLC v. DISH Network LLC,

No. 19-1283 (Fed. Cir. Apr. 21, 2020) (order

reversing and remanding denial of attorney

fees);

 Dragon Intell. Prop., LLC v. DISH Network

L.L.C., No. 1:13-CV-02066-RGA (D. Del. Nov. 8,

2021) (order finding exceptionality but denying

attorney liability and IPR fees);

 Dragon Intell. Prop., LLC v. DISH Network

L.L.C., No. 1:13-CV-02066-RGA (D. Del. Mar. 7,

2022) (order awarding DISH $1,456,273.49 in

fees); and

 Dragon Intell. Prop., LLC v. DISH Network

L.L.C., No. 22-1621 (Fed. Cir. May 20, 2024)

(order affirming finding of exceptionality and

denial of attorney liability and IPR fees).

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ...............................

PARTIES TO THE PROCEEDINGS BELOW ...

RULE 29.6 DISCLOSURE STATEMENT .........

RELATED PROCEEDINGS ...............................

iii

TABLE OF AUTHORITIES ................................

viii

OPINIONS BELOW ............................................

STATEMENT OF JURISDICTION ....................

STATUTE INVOLVED .......................................

INTRODUCTION ................................................

STATEMENT OF THE CASE ............................

I. Proceedings in the District Court ..............

II. Split Decision in the Court of Appeals.......

A. The Majority Decision...............................

B. The Dissent ...............................................

REASONS FOR GRANTING THE PETITION..

I. The Federal Circuit’s Categorial Bar

Squarely Conflicts with the Statute’s

Text, This Court’s Precedent, and the

Fifth Circuit’s Holding on a Nearly

Identical Issue Creating a Circuit Split

on Whether Attorneys May Be Liable for

Fee Awards ...............................................

A. The Statute’s Text Does Not Support

Immunizing All Attorneys from Section

285 Liability.........................................

TABLE OF CONTENTS —Continued

Page

B. The Federal Circuit Created a Circuit

Split by Wrongly Following the

Fourth Circuit Instead of this Court

and the Fifth Circuit ...........................

C. The Federal Circuit Also Justified Its

Contrary Approach Based on Its Own

Judicial Policymaking Rather Than

Statutory Interpretation .....................

D. This Case Is an Ideal Vehicle for

Resolving the Conflict and Restoring

Discretion to District Courts ...............

II. The Federal Circuit’s Categorical

Exclusion of Administrative Agency Fees

to Accused Infringers—an Important

Issue of First Impression—Clashes with

This Court’s Precedent, the Statutory

Language, and Legislative Intent ............

A. The Federal Circuit Failed to Apply

the Court’s Established Test for

Extending a Fee-Shifting Statute to

an Administrative Proceeding ............

B. The Federal Circuit’s Decision

Creates Distinctions That Serve No

Purpose ................................................

C. This Case Is an Ideal Vehicle for

Resolving This Important and

Recurring Issue ...................................

CONCLUSION ....................................................

vii

TABLE OF CONTENTS—Continued

APPENDIX

Page

Appendix A: Opinion of the United States

Court of Appeals for Federal Circuit (May

20, 2024) .......................................................

Appendix B: Order of the United States

District Court for the District of Delaware

adopting the Report and Recommendation

of the Magistrate Judge (November 8,

2021)..............................................................

18a

Appendix C: Memorandum of the United

States District Court for the District

of Delaware regarding the Report and

Recommendation (November 5, 2021) .........

20a

Appendix D: Report and Recommendation of

the United States District Court for the

District of Delaware of the Magistrate

Judge regarding the Motions to Declare

Case Exceptional (August 16, 2021) ............

33a

Appendix E: Order of the United States

District Court for the District of Delaware

awarding Attorneys’ Fees and Expenses

(March 7, 2022) .............................................

60a

Appendix F: Order of the United States

Court of Appeals for Federal Circuit

Denying Petition for en banc rehearing

(October 10, 2024) ........................................

62a

viii

TABLE OF AUTHORITIES

CASES

Page(s)

Alliance for Good Gov’t v. Coal. for Better

Gov’t, 998 F.3d 661 (5th Cir. 2021),

cert. denied, 142 S. Ct. 45 (2021) ........ 11, 12, 16

Am. Sec. Vanlines, Inc. v. Gallagher,

782 F.2d 1056 (D.C. Cir. 1986) .................

Automated Bus. Cos., Inc. v.

NEC Am., Inc.,

202 F.3d 1353 (Fed. Cir. 2000) .................

Backertop Licensing LLC v.

Canary Connect, Inc.,

107 F.4th 1335 (Fed. Cir. 2024) ...............

Baker Botts L.L.P. v. ASARCO LLC,

576 U.S. 121 (2015) ...................................

Bartel Dental Books Co., Inc. v. Schultz,

786 F.2d 486 (2d Cir. 1986), cert. denied,

478 U.S. 1006 (1986) .................................

Bartenwerfer v. Buckley,

598 U.S. 69 (2023) .....................................

Beam v. Downey,

151 F. App’x 142 (3d Cir. 2005) ................

Braley v. Campbell,

832 F.2d 1504 (10th Cir. 1987) .................

Bus. Guides, Inc. v. Chromatic Commc’ns

Enters., Inc.,

498 U.S. 533 (1991) ...................................

Chambers v. NASCO, Inc.,

501 U.S. 32 (1991) .....................................

TABLE OF AUTHORITIES—Continued

Page

Coghlan v. Starkey,

852 F.2d 806 (5th Cir. 1988) .....................

Dragon Intell. Prop., LLC v.

Sirius XM Radio Inc.,

No. 1:13-cv-02067-RGA, ECF No. 250

(D. Del. Mar. 7, 2022) ...............................

Eon-Net LP v. Flagstar Bancorp,

653 F.3d 1314 (Fed. Cir. 2011) .................

Espinoza v. Galardi S. Enters., Inc.,

772 F. App’x 768 (11th Cir. 2019) ............

Goya Foods, Inc. v. Unanue-Casal,

275 F.3d 124 (1st Cir. 2001) .....................

Hensley v. Eckerhart,

461 U.S. 424 (1983) ...................................

Hill v. Norfolk & W. Ry. Co.,

814 F.2d 1192 (7th Cir. 1987) ...................

Hughes v. Novi Am., Inc.,

724 F.2d 122 (Fed. Cir. 1984) ...................

In re Crescent City Ests. LLC,

588 F.3d 822 (4th Cir. 2009) ................ 16-18, 21

In re Nimitz Techs. LLC,

No. 2023-103, 2022 WL 17494845

(Fed. Cir. Dec. 8, 2022) .............................

In re Prop. Movers, L.L.C.,

31 F. App’x 81 (4th Cir. 2002) ..................

Indep. Fed’n of Flight Attendants v. Zipes,

491 U.S. 754 (1989) ................................... 12, 22

TABLE OF AUTHORITIES—Continued

Page

Insituform Techs., Inc. v.

CAT Contracting, Inc.,

385 F.3d 1360 (Fed. Cir. 2004) .................

Iris Connex, LLC v. Dell, Inc.,

235 F. Supp. 3d 826 (E.D. Tex. 2017).......

Kellerman v. United States,

871 F.2d 1363 (8th Cir. 1989) ...................

Kirtsaeng v. John Wiley & Sons, Inc.,

579 U.S. 197 (2016) ............................. 20, 21, 34

LaSalle Nat’l Bank v. First Conn. Holding

Grp., L.L.C.,

287 F.3d 279 (3d Cir. 2002) ......................

Little Sisters of the Poor Saints Peter &

Paul Home v. Pennsylvania,

591 U.S. 657 (2020) ...................................

Loper Bright Enters. v. Raimondo,

144 S. Ct. 2244 (2024) ......................... 13, 17, 22

Mach. Corp. of Am. v. Gullfiber AB,

774 F.2d 467 (Fed. Cir. 1985) ................... 18, 25

Mathis v. Spears,

857 F.2d 749 (Fed. Cir. 1988) ...................

McConnell v. Critchlow,

661 F.2d 116 (9th Cir. 1981) .....................

Morris v. Adams-Mills Corp.,

758 F.2d 1352 (10th Cir. 1985) .................

Nelson v. Adams USA, Inc.,

529 U.S. 460 (2000) ........................ 11-13, 16, 18

TABLE OF AUTHORITIES—Continued

Page

Nimitz Techs. LLC v. CNET Media, Inc.,

No. CV 21-1247-CFC, 2022 WL

17338396 (D. Del. Nov. 30, 2022) ............. 26, 27

Octane Fitness, LLC v.

ICON Health & Fitness, Inc.,

572 U.S. 545

(2014) ................. 2, 3, 9, 11-14, 16, 17, 20-23, 33

Pennsylvania v. Del. Valley Citizens’

Council for Clean Air,

478 U.S. 546 (1986) ...................................

Pop Top Corp. v. Rakuten Kobo Inc.,

No. 2021-2174, 2022 WL 2751662

(Fed. Cir. July 14, 2022) ...........................

PPC Broadband, Inc. v. Corning Optical

Commc’ns RF, LLC,

815 F.3d 734 (Fed. Cir. 2016) ...................

Precision Instrument Mfg. Co. v. Auto.

Maint. Mach. Co.,

324 U.S. 806 (1945) ...................................

PS Prods. Inc. v. Panther Trading Co. Inc.,

122 F.4th 893 (Fed. Cir. 2024) .................

Raylon, LLC v. Complus Data Innovations,

Inc.,

700 F.3d 1361 (Fed. Cir. 2012) ................. 14, 21

Roadway Express, Inc. v. Piper,

447 U.S. 752 (1980) ............................. 15, 19, 20

Rohm & Haas Co. v. Crystal Chem. Co.,

736 F.2d 688 (Fed. Cir. 1984) ................... 14, 21

xii

TABLE OF AUTHORITIES—Continued

Page

Romag Fasteners, Inc. v. Fossil, Inc.,

590 U.S. 212 (2020) ...................................

Sullivan v. Hudson,

490 U.S. 877 (1989) ................................... 28-30

VDPP, LLC v. Volkswagen Grp. of Am.,

Inc.,

No. H-23-2961, 2024 WL 3378456

(S.D. Tex. July 11, 2024)...........................

Waldman v. Stone,

854 F.3d 853 (6th Cir. 2017) .....................

Webb v. Bd. of Educ. of Dyer Cnty., Tenn.,

471 U.S. 234 (1985) ................................... 28-30

STATUTES

15 U.S.C. § 1117(a) ......................... 1, 3, 11, 12, 16

17 U.S.C. § 505 .............................................

28 U.S.C. § 1254(1) .......................................

28 U.S.C. § 1447(c) ....................................... 16-18

28 U.S.C. § 1927 ........................................... 19, 23

35 U.S.C. § 23 ...............................................

35 U.S.C. § 281 .............................................

35 U.S.C. § 282 .............................................

35 U.S.C. § 285 .................... 2-21, 25-27, 29, 31-33

35 U.S.C. § 311 et seq. ..................................

§ 315(b) ...................................................... 6, 31

§ 315(e)(2) ..................................................

xiii

TABLE OF AUTHORITIES—Continued

Page

42 U.S.C. § 1988 ...........................................

42 U.S.C. § 2000e-5(k) ..................................

RULES

Fed. R. App. P. 38 ......................................... 14, 15

Fed. R. Civ. P. 11 ..........................................

LEGISLATIVE MATERIALS

H.R. 4807, 100th Cong., 2d Sess. (1988)......

H. R. Rep. No. 112-98(I), pt. 1 (2011) ..........

S. Rep. No. 1503, 79th Cong., 2d Sess.

(1946), as reprinted in 1946 U.S. Code

Congr. Serv. 1386, 1387 ............................ 14, 22

OTHER AUTHORITIES

Antonin Scalia & Bryan A. Garner,

Reading Law: The Interpretation of Legal

Texts (2012) ...............................................

Arthur L. Goodhart, Costs, 38 Yale L.J. 849

(1929) .........................................................

Annual Report of the United States District

Court for the District of Delaware to the

Federal Bar Association 2024, https://

www.ded.uscourts.gov/sites/ded/files/ne

ws/FINAL%20Court%20Report2024%20

.pdf .............................................................

xiv

TABLE OF AUTHORITIES—Continued

Page

Fed. Trade Comm’n, The Evolving IP

Marketplace: Aligning Patent Notice and

Remedies with Competition (Mar. 2011),

https://www.ftc.gov/sites/default/files/doc

uments/reports/evolving-ip-marketplacealigning-patent-notice-and-remedies-co

mpetition-report-federal-trade/110307p

atentreport.pdf ..........................................

Jeff Overley, Circuit-By-Circuit Guide

To 2024’s Most Memorable Moments,

LAW360 (Dec. 16, 2024), https://www.law

360.com/legalindustry/articles/2272787/c

ircuit-by-circuit-guide-to-2024-s-most-m

emorable-moments....................................

Lord Chancellor’s Dep’t of Great Britain,

The Rules of the Supreme Court, 18831935, 1935 ed. ...........................................

Patent Dispute Report: 2024 Mid-Year

Report, UNIFIED PATENTS (July 22, 2024),

https://www.unifiedpatents.com/insights

/2024/7/22/patent-dispute-report-2024mid-year-report .........................................

Patent Trial and Appeal Board Parallel

Litigation Study, USPTO (June 2022),

https://www.uspto.gov/sites/default/files/

documents/ptab_parallel_litigation_stud

y_20220621_.pdf .......................................

IN THE

Supreme Court of the United States

————

No. 24-____

————

DISH NETWORK L.L.C.,

Petitioner,

DRAGON INTELLECTUAL PROPERTY, LLC;

ROBERT E. FREITAS; FREITAS & WEINBERG LLP,

Respondents.

————

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Federal Circuit

————

PETITION FOR A WRIT OF CERTIORARI

Petitioner DISH Network L.L.C. respectfully petitions

for a writ of certiorari to review the judgment of the

United States Court of Appeals for the Federal Circuit.

OPINIONS BELOW

The Court of Appeals’ opinion (Pet. App. 1a-17a) is

reported at 101 F.4th 1366. The Court of Appeals’

denial of rehearing en banc (Pet. App. 62a-64a) is

reported at 91 F.4th 1340. The district court’s opinion

finding exceptionality but precluding attorney liability

and IPR fees (Pet. App. 18a-19a) is unreported but is

available at 2021 WL 5177680. The district court’s

order awarding DISH $1,456,273.49 in fees (Pet. App.

60a-61a) is unreported. The Patent Trial and Appeal

Board’s decision finding all challenged claims unpatentable is unreported but is available at 2016 WL 3268756.

STATEMENT OF JURISDICTION

The judgment of the Court of Appeals was filed on

May 20, 2024. Pet. App. 1a. Timely petitions for

rehearing en banc were denied on October 10, 2024.

Pet. App. 62a-64a. This Court has jurisdiction

pursuant to 28 U.S.C. § 1254(1).

STATUTE INVOLVED

At issue in this case is the fee-shifting statute set

forth in the Patent Act, 35 U.S.C. § 285, which states:

“The court in exceptional cases may award

reasonable attorney fees to the prevailing party.”

INTRODUCTION

This petition addresses a circuit split involving the

identical statutory language of the Patent and

Lanham Acts. No dispute exists that DISH prevailed

in this exceptional case, entitling it to its attorney’s

fees. DISH, however, also requested the imposition of

joint and several liability of the fee award against the

plaintiff ’s counsel, as the entity primarily responsible

for advancing and prolonging this frivolous case.

In denying DISH’s request, the Federal Circuit’s

ruling that Section 285 immunizes attorneys from fee

awards defies the plain text of the statute and this

Court’s well-established precedent. By ignoring

Congress’s intent and contravening principles of

statutory interpretation, the Federal Circuit created a

circuit split with the Fifth Circuit over identical

language found in the parallel fee-shifting provision of

the Lanham Act. Nearly a decade after this Court’s

decision in Octane Fitness, LLC v. ICON Health &

Fitness, Inc., 572 U.S. 545 (2014), the Federal Circuit’s

departure from precedent underscores the need for

this Court’s review to prevent further erosion of

Section 285’s critical fee-shifting purpose and to

remove this clear split of authority.

Section 285’s clarity leaves no room for exceptions.

It does not restrict who must pay a fee award, instead

entrusting district courts with broad discretion to

determine the proper allocation. This Court has already

held that the statute imposes only one constraint: the

case must be “exceptional.” Octane Fitness, 572 U.S. at

553. The Federal Circuit’s decision to sidestep this

Court’s straightforward directive and rewrite this

statute amply warrants this Court’s review.

The Federal Circuit’s holding also directly conflicts

with the Fifth Circuit’s post-Octane interpretation of

identical fee-shifting language in the Lanham Act

(15 U.S.C. § 1117(a)). The Fifth Circuit, adhering to

established canons of statutory interpretation and

this Court’s guidance in Octane Fitness, concluded

that attorneys are not entitled to special protection

under that statute. The Federal Circuit, by contrast,

disregarded the Fifth Circuit’s reasoning, ignored

Octane Fitness, and relied on outdated and distinguishable pre-Octane precedent from the Fourth Circuit.

But even the Fourth Circuit’s decision precluding

attorney liability for fee awards runs afoul of statutory

interpretation rules and should not be followed here.

This split between the Federal, Fourth, and Fifth

Circuits underscores the need for this Court’s

intervention to harmonize the interpretation of the

Lanham and Patent Acts’ fee-shifting provisions and

reaffirm Octane Fitness as the governing standard.

But one unstated exception was not enough. The

Federal Circuit compounded its error by inventing a

second, equally baseless exception to fee recovery

under Section 285. This time, it declared that the

statute bars accused infringers from recovering fees

for parallel administrative proceedings before the U.S.

Patent and Trademark Office, known as inter partes

review. Yet nothing in the text of Section 285 supports

such a prohibition, particularly given that inter partes

reviews fall within the same Patent Act. Nor does

precedent. For nearly 40 years, this Court has recognized that fees for parallel administrative proceedings

are recoverable—even when those proceedings are

voluntarily initiated. The Federal Circuit ignored this

longstanding rule, relying instead on an unfounded

rationale to strip accused infringers of a vital

safeguard against frivolous litigation. This unjustified

departure from statutory and judicial authority only

deepens the need for this Court’s review.

The questions presented strike at the heart of a

pervasive and escalating issue in patent litigation.

Nearly 80% of patent lawsuits today are brought by

patent assertion entities, often intentionally designed

as judgment-proof shell companies crafted to evade

liability for adverse fee awards if the case is found

exceptional.1 These entities weaponize the legal

system, exploiting loopholes for attorneys to file

baseless suits while shielding themselves from

accountability. The unchecked proliferation of such

tactics demands this Court’s intervention to restore

fairness and integrity to patent litigation.

The Federal Circuit’s creation of categorical exemptions

from fee liability—without any basis in the statute or

Patent Dispute Report: 2024 Mid-Year Report, UNIFIED

PATENTS (July 22, 2024), https://www.unifiedpatents.com/insigh

ts/2024/7/22/patent-dispute-report-2024-mid-year-report.

legislative history—empowers judgment-proof patent

assertion entities and their attorneys to pursue

reckless litigation with impunity. This outcome burdens

the judiciary, legitimate innovators, and consumers,

who ultimately pay the price for these exploitative

tactics. Left unchecked, this unwarranted “attorney

exemption” will only embolden further abuse, distorting

the patent system away from its intended purpose.

Section 285’s plain text does not shield bad actors from

accountability. As exceptional tactics proliferate at the

hands of attorneys, federal courts must retain broad

discretion unencumbered by any judicially created

carve-outs that categorically shield certain actors or

conduct from accountability for their exceptionality.

This case presents an ideal vehicle for resolving

these questions of statutory interpretation with farreaching implications for patent litigation. The

dispute turns solely on a straightforward legal issue:

the scope of Section 285. Because the Federal Circuit’s

erroneous statutory interpretation conflicts with decisions

of this Court, the Fifth Circuit, and both the Patent

and Lanham Acts, the Court’s review is amply warranted.

STATEMENT OF THE CASE

I. Proceedings in the District Court

More than ten years ago, Dragon Intellectual

Property, LLC, represented by attorney Robert Freitas

and his firm (collectively, “Freitas”), sued DISH and

others for patent infringement in the District of

Delaware, alleging infringement of U.S. Patent No.

5,930,444. Pet. App. 33a. Dragon is a patent assertion

entity, with this patent as its sole asset and a patent

attorney as its sole owner. That patent concerned a

method for digital video recorders (“DVRs”) to record,

pause, and play back television shows upon user

actuation. Pet. App. 34a-35a. Merely watching DISH’s

DVR set-top boxes record TV programming proved

that the accused products did not infringe, as they

recorded continuously without awaiting user actuation.

Pet. App. 36a.

Within the one-year statutory deadline (35 U.S.C.

§ 315(b)), DISH filed an inter partes review (“IPR”)

petition at the Patent Trial and Appeal Board (“Board”) of

the Patent Office, challenging the validity of Dragon’s

asserted patent.2 Pet. App. 37a. The district court

stayed Dragon’s case against DISH pending the outcome

of the IPR proceeding while the other cases continued.

Id. The Board ultimately invalidated the challenged

claims of Dragon’s patent, which the Federal Circuit

affirmed. Pet. App. 41a. In parallel, the district court

entered judgment for DISH (as well as all other

defendants) based on stipulations of noninfringement

following the court’s claim construction decision that

excluded continuously recording products, where it noted

that it had “only once seen a clearer case of prosecution

disclaimer.” Pet. App. 39a-40a. On appeal, after affirming

the Board’s decision, the Federal Circuit dismissed the

judgments of noninfringement as moot in view of the

patent’s invalidity. Pet. App. 41a-42a.

Following the final judgment, DISH moved for

attorney’s fees under 35 U.S.C. § 285, which permits

fee awards to prevailing parties in exceptional cases.

Pet. App. 40a-41a. The district court first held that

DISH did not qualify as a prevailing party under

Section 285 by virtue of having invalidated Dragon’s

An IPR enables one to petition the Board to challenge the

validity of patent in light of prior patents or printed publications.

See generally 35 U.S.C. § 311 et seq.

patent in an administrative proceeding and not in

federal court. Pet. App. 42a.

The Federal Circuit reversed that decision, holding

that DISH prevailed under Section 285 by invalidating

the patent in the IPR proceeding, effectively resolving

the district court litigation. Pet. App. 42a-43a. On

remand, the district court found the case exceptional

because, in part, this was “a very clear case of

prosecution disclaimer” that “preclude[d] a finding of

infringement by any of the defendants’ accused

products,” which were continuous recording devices.

Pet. App. 45a-48a. Even though “information

demonstrating noninfringement by the accused

products was available to Dragon prior to filing the

suit,” Dragon and its attorneys nevertheless forged

ahead, making this case stand out from others with

respect to Dragon’s substantive litigation position and

thus “exceptional.” Pet. App. 48a.

The district court awarded DISH nearly $1.5 million

in attorney’s fees,3 comprising only fees it incurred in

the district court action itself. Pet. App. 60a-61a.

Believing it was handcuffed by the statute, the court

denied DISH any additional fees for its IPR proceeding

and denied imposing joint and several liability for the

fee award on Freitas. Pet. App. 53a-58a. On both

issues, the district court concluded that the statute

precluded that relief as a matter of law. Pet. App. 49a50a, 54a-55a.

One of the other defendants, Sirius XM Radio Inc., won over

$1.8 million in attorney’s fees, making the fee award against

Dragon over $3.3 million. See Dragon Intell. Prop., LLC v. Sirius

XM Radio Inc., No. 1:13-cv-02067-RGA, ECF No. 250 (D. Del.

Mar. 7, 2022).

II. Split Decision in the Court of Appeals

A. The Majority Decision

The Federal Circuit’s decision, authored by Chief

Judge Moore, affirmed the district court’s decision in

all respects. Pet. App. 3a. It affirmed exceptionality

under Section 285, given the baseless infringement

claims. Pet. App. 5a-8a. But the Federal Circuit held

that courts have no discretion to impose joint and

several liability for the fee award on a party’s attorney.

Pet. App. 11a-13a. It contended that the plain

language of Section 285 does not explicitly permit a fee

award against attorneys. Pet. App. 11a. According to

the court of appeals, if Congress intended the statute

to include such liability against that particular

category of third parties, it would have done so

explicitly, as it had in other statutes and rules. Pet.

App. 11a-12a.

Additionally, the Federal Circuit majority opinion

denied the recovery of fees incurred in administrative

Patent Office proceedings, such as IPRs. Pet. App. 8a11a. It reasoned that DISH pursued its administrative

challenge voluntarily and benefited from doing so. Pet.

App. 8a-10a. Despite finding DISH a “prevailing party”

under Section 285 in district court by virtue of

invalidating the patent in its successful IPR, the

majority irreconcilably precluded DISH from recovering

fees for that same proceeding. Pet. App. 11a.

B. The Dissent

Sitting by designation, Judge Bencivengo, in a

partial dissent, disagreed with the majority’s exclusion

of IPR fees from recovery under Section 285. Pet. App.

15a. Because the lower court stayed the underlying

litigation, Judge Bencivengo reasoned that the IPR

proceeding was not duplicative but, “[a]s contemplated

by the creation of IPR,” effectively substituted for the

district court litigation on the issue of the patent’s

validity. Pet. App. 15a-16a. She correctly concluded

that DISH incurred IPR fees as a direct consequence

of defending against Dragon’s baseless claims, and

those fees rationally should be recoverable to fully

compensate DISH. Pet. App. 16a-17a. (“Appellants

incurred fees in the IPR that they would not have

incurred but for being sued by Dragon in a case that

should not have been initiated by Dragon.”). Judge

Bencivengo also emphasized that DISH’s IPR was a

necessary response to the litigation and should not be

“categorically precluded” from recovery under Section

285. Pet. App. 17a.

REASONS FOR GRANTING THE PETITION

The Federal Circuit’s holding deviates from the

plain text of Section 285, contravening established

principles of statutory interpretation. Its ruling

conflicts with this Court’s precedent, which has firmly

established the proper framework for interpreting

Section 285. And by departing from the interpretation

of another circuit over identical statutory language, its

decision created a circuit split, necessitating the

Court’s review.

Section 285 is clear and unambiguous. It does not

restrict who may be required to pay a fee award,

reflecting Congress’s choice to leave that decision to

the sound discretion of the district court. The Court

has already made clear that the text reflects “one and

only one constraint on district courts’ discretion”—

that the case be “exceptional.” Octane Fitness, 572 U.S.

at 553. The Federal Circuit is not free to ignore this

Court’s directive and rewrite this statute.

Section 285 serves to restrain abusive litigation and

protect the public interest. Absent the accountability

mechanisms already available under Section 285,

patent litigation runs haywire. Judgment-proof plaintiffs

hold patent rights and dubiously wield them against

high-tech companies at extreme costs and with little

disincentive. The problem is pervasive and pernicious.

District courts find themselves routinely plagued by

frivolous patent litigation and attorney misconduct.

See infra pp. 23-25. This Court should reject the

Federal Circuit’s unmoored statutory interpretation of

Section 285, resolve the circuit split it needlessly

created, and restore federal courts with discretion to

curtail patent litigation abuses.

This case presents the ideal vehicle. DISH’s fees

could have been entirely avoided had Dragon’s counsel

conducted an adequate pre-suit investigation—such

as simply consulting public materials or using a DISH

DVR. The Federal Circuit’s conclusion—that Section

285 precludes sub silentio imposing joint and several

liability on attorneys for fee awards—is the sole

ground supporting the district court’s order on that

issue. The same holds true for its decision that the

statute prohibits IPR petitioners from recovering IPR

fees. Both issues were squarely pressed and passed

upon below, resulting in a rare circuit split involving

the Federal Circuit. And because the Federal Circuit’s

bar on both issues is categorical, it is an optimal

vehicle for this Court. The petition should be granted.

I. The Federal Circuit’s Categorial Bar

Squarely Conflicts with the Statute’s Text,

This Court’s Precedent, and the Fifth

Circuit’s Holding on a Nearly Identical

Issue Creating a Circuit Split on Whether

Attorneys May Be Liable for Fee Awards

The Federal Circuit’s categorical bar to counsel

liability for Section 285 fees has no roots in the

statute’s text, its purpose, or precedent. In considering

the statutory interpretation of Section 285 in Octane

Fitness, this Court held that it “imposes one and only

one constraint on district courts’ discretion to award

fees in patent litigation: The power is reserved for

‘exceptional’ cases.” 572 U.S. at 553-54 (rejecting

Federal Circuit’s “overly rigid” prior approach). And in

Nelson v. Adams USA, Inc., the Court condoned

Section 285 liability against a third party—the

plaintiff ’s president and sole shareholder—subject to

due process.4 529 U.S. 460, 472 (2000) (noting its

“decision surely does not insulate [the third-party]

from liability”).

The Federal Circuit departed from this precedent

and arbitrarily limited the otherwise broad language.

The Fifth Circuit, however, followed Octane Fitness in

finding an attorney liable under the Lanham Act’s

identical provision. Properly grounding its decision in

Octane Fitness, the Fifth Circuit permitted joint and

several liability for fees against a party’s attorney.

Alliance for Good Gov’t v. Coal. for Better Gov’t, 998

F.3d 661, 665-66 (5th Cir. 2021), cert. denied, 142 S. Ct.

45 (2021) (Mem). In doing so, it held that neither the

Lanham nor Patent Act “expressly limit[s] the persons

Freitas received adequate due process below, which it never

challenged.

who can be held liable for attorney’s fees,” id. at 665,

consistent with this Court’s precedent that a third

party is “surely . . . not insulate[d]” from liability for

Section 285 fees, Nelson, 529 U.S. at 472.

The Federal Circuit reached the opposite conclusion.

Ignoring both Octane Fitness and the Fifth Circuit’s

reasoning entirely, the Federal Circuit erroneously

followed the Fourth Circuit’s pre-Octane interpretation of a differently worded fee-shifting statute. The

Federal Circuit provided no reason for applying the

Fourth Circuit’s inapplicable approach rather than

Octane Fitness or the Fifth Circuit’s application of it to

an identical provision. See Indep. Fed’n of Flight

Attendants v. Zipes, 491 U.S. 754, 758-59 n.2 (1989)

(“[F]ee-shifting statutes’ similar language is ‘a strong

indication’ that they are to be interpreted alike.”)

(citations omitted); Antonin Scalia & Bryan A. Garner,

Reading Law: The Interpretation of Legal Texts 252-53

(2012) (“‘Statutes,’ Justice Frankfurter once wrote,

‘cannot be read intelligently if the eye is closed to

considerations evident in affiliated statutes.’”).

Because the Fifth Circuit followed Octane Fitness,

and the Federal Circuit did not, the circuits are now

divided on the reach of fee-shifting remedies against

attorneys responsible for a case’s exceptionality under

identically worded language in both the Patent Act and

Lanham Act. The Federal Circuit’s circuit-splitting

disregard of identical language in related intellectual

property statutes cannot be squared with the statute

or precedent. This circuit split amply warrants this

Court’s review.

A. The Statute’s Text Does Not Support

Immunizing All Attorneys from Section

285 Liability

The broad and permissible statutory language of

Section 285 has no exceptions. “The text of the [statute]

means what is says,” Loper Bright Enterprises v.

Raimondo, 144 S. Ct. 2244, 2262 (2024), and its text

contains zero limits on who is liable. None. The Federal

Circuit simply concocted one. See Little Sisters of the

Poor Saints Peter & Paul Home v. Pennsylvania, 591

U.S. 657, 677 (2020) (“It is a fundamental principle of

statutory interpretation that ‘absent provision[s] cannot

be supplied by the courts.’”). And in doing so, the

Federal Circuit ignored this Court’s prior decisions

leaving district courts wide latitude to fashion appropriate

fee awards. Octane Fitness, 572 U.S. at 554; Nelson,

529 U.S. at 472. This precedent makes clear that the

statute’s silence on liability cannot immunize attorneys

who are responsible for exceptionality.

Determining whether the “substantive strength of a

party’s litigating position,” or “the unreasonable manner

in which the case was litigated,” amounts to exceptionality necessarily involves the actions and positions

taken by attorneys in representing their clients and

perpetuating the litigation. See Octane Fitness, 572

U.S. at 554. Things like “frivolousness, motivation,

objective unreasonableness (both in the factual and

legal components of the case)” capture the actions of

counsel. See id. at 554 n.6 (citation omitted). And,

perhaps most importantly, given patent law’s effect on

the public interest, “the need in particular circumstances to advance considerations of compensation

and deterrence” permits and justifies the imposition of

joint and several liability. See id. These factors are all

permissible considerations in the discretionary “totality of

the circumstances” test (id. at 550)—and permit what

the Federal Circuit here prohibited.

Congress enacted the Patent Act’s fee-shifting

provision, in part, to restrain abusive patent litigation

practices and protect the public interest. See, e.g.,

Octane Fitness, 572 U.S. at 549, 554 & n.6; Automated

Bus. Cos., Inc. v. NEC Am., Inc., 202 F.3d 1353, 1355

(Fed. Cir. 2000) (The purpose of this statute is to

“serve[] as a deterrent to ‘improper bringing of clearly

unwarranted suits’ for patent infringement.”) (quoting

Mathis v. Spears, 857 F.2d 749, 754 (Fed. Cir. 1988));

Raylon, LLC v. Complus Data Innovations, Inc., 700

F.3d 1361, 1372 (Fed. Cir. 2012) (purpose is “to address

a patent-specific policy rationale,” where “sanctions

were necessary to deter the ‘improper bringing of

clearly unwarranted suits.’”) (citation omitted). Deterring

frivolous suits “further[s] equitable considerations . . .

for the purpose of enabling a court to prevent gross

injustice to an alleged infringer.” See Rohm & Haas Co.

v. Crystal Chem. Co., 736 F.2d 688, 690-92 (Fed. Cir.

1984) (discussing Section 285 legislative history); see

also S. Rep. No. 1503, 79th Cong., 2d Sess. (1946), as

reprinted in 1946 U.S. Code Congr. Serv. 1386, 1387

(“provision is [] made general so as to enable the court

to prevent a gross injustice to an alleged infringer”)

(addressing precursor to Section 285). The statutory

purpose reinforces Congress’s willingness to permit

fee liability against those who improperly file frivolous

lawsuits—which necessarily includes attorneys.

Courts have long held attorneys liable for fees for

conducting litigation in bad faith or advancing

meritless claims, even where the rule that imposes fee

liability is silent on who should be held liable. For

instance, Federal Rule of Appellate Procedure 38 sets

out which party may receive fees for frivolous appeals

but is otherwise silent on who must pay. See Fed. R.

App. P. 38 (“If a court of appeals determines that an

appeal is frivolous, it may, after a separately filed

motion or notice from the court and reasonable

opportunity to respond, award just damages and single

or double costs to the appellee.”). Every circuit court

has condoned assessing personal or joint and several

liability for Rule 38 fee awards against attorneys

responsible for a frivolous appeal. See, e.g., Pop Top

Corp. v. Rakuten Kobo Inc., No. 2021-2174, 2022 WL

2751662, at *3 (Fed. Cir. July 14, 2022); Am. Sec.

Vanlines, Inc. v. Gallagher, 782 F.2d 1056, 1057 (D.C.

Cir. 1986); Goya Foods, Inc. v. Unanue-Casal, 275 F.3d

124, 131 (1st Cir. 2001); Bartel Dental Books Co., Inc. v.

Schultz, 786 F.2d 486, 491 (2d Cir. 1986), cert. denied,

478 U.S. 1006 (1986); Beam v. Downey, 151 F. App’x

142, 145 (3d Cir. 2005); In re Prop. Movers, L.L.C., 31 F.

App’x 81, 90 (4th Cir. 2002) (per curiam); Coghlan v.

Starkey, 852 F.2d 806, 818 (5th Cir. 1988); Waldman v.

Stone, 854 F.3d 853, 855 (6th Cir. 2017); Hill v. Norfolk

& W. Ry. Co., 814 F.2d 1192, 1201 (7th Cir. 1987);

Kellerman v. United States, 871 F.2d 1363, 1364 (8th

Cir. 1989); McConnell v. Critchlow, 661 F.2d 116, 118

(9th Cir. 1981); Braley v. Campbell, 832 F.2d 1504, 1511

(10th Cir. 1987); Espinoza v. Galardi S. Enters., Inc.,

772 F. App’x 768, 771 (11th Cir. 2019).

The Federal Circuit fails to justify why attorneys

receive special protection in district court under

Section 285 but not in circuit court under Rule 38. Cf.

Roadway Express, Inc. v. Piper, 447 U.S. 752, 766

(1980) (“The power of a court over members of its bar

is at least as great as its authority over litigants.”)

(internal footnote and citations omitted); Eon-Net LP

v. Flagstar Bancorp, 653 F.3d 1314, 1328 (Fed. Cir.

2011) (holding attorney “has an obligation to the court

and should not blindly follow the client’s interests if

not supported by law and facts”). Like circuit courts,

districts courts should have at their disposal all

available mechanisms, including Section 285, to police

litigation abuses and the exceptional conduct of an

attorney practicing before them.

B. The Federal Circuit Created a Circuit

Split by Wrongly Following the Fourth

Circuit Instead of this Court and the

Fifth Circuit

Instead of addressing precedent on identical

statutory language, the Federal Circuit focused on the

Fourth Circuit’s pre-Octane treatment of a different

statute, creating a circuit split.

The Fifth Circuit applied the Court’s decisions in

Nelson and Octane Fitness to impose joint and several

liability against a party’s attorney under the Lanham

Act’s identical provision. Alliance, 998 F.3d at 665-66.

Instead of following the Fifth Circuit and this Court,

the Federal Circuit ignored both. Rather, it followed

the Fourth Circuit’s pre-Octane decision in In re

Crescent City Estates, LLC, 588 F.3d 822 (4th Cir.

2009), which concerned a different statute (28 U.S.C.

§ 1447(c)). Section 1447(c) pertains to remanding cases

after improper removal to federal court such that “[a]n

order remanding the case may require payment of just

costs and any actual expenses, including attorney fees,

incurred as a result of the removal.” Like the Patent

Act and Lanham Act, it does not explicitly state who is

liable for paying the fee award. The Fourth Circuit

concluded that without express statutory authority to

hold attorneys liable, they are not. Crescent City, 588

F.3d at 826.

The Fourth Circuit’s analysis is inapplicable to

Section 285 and predates Octane Fitness. Thus, the

Federal and Fifth Circuits are now divided on the

scope of identical fee-shifting provisions. Even if the

Fourth Circuit’s analysis were relevant to the Patent

and Lanham Act remedies, it would only deepen the

circuit divide and contravene Octane Fitness.

But even the Fourth Circuit’s reasoning is questionable.

See Crescent City, 588 F.3d at 825 (acknowledging that

no circuit courts had addressed the issue and that

district courts remained “badly divided”). Because the

plain language of 28 U.S.C. § 1447(c) “makes no

explicit mention of counsel,” the Fourth Circuit turned

to the American Rule’s presumption that each party

bear its own fees—but it extended this axiom by

conceiving a second prong: that only parties, not

attorneys, pay fees. Crescent City, 588 F.3d at 825-26

(finding “two distinct underlying premises” exist in the

American Rule). But the American Rule does not stand

for that second proposition. It is only a presumption

against fee-shifting itself, which fee-shifting statutes

like Section 285 expressly override. See Baker Botts

L.L.P. v. ASARCO LLC, 576 U.S. 121, 126-27 (2015). It

is the exception, not the rule, that governs now.

The Fourth Circuit also went one step further,

holding that a statute’s silence means that only parties—

and, by implication, no others—are responsible for the

fees. Crescent City, 588 F.3d at 825 (“silence does not

equal consent”). That view contradicts Loper Bright,

144 S. Ct. at 2262, which warns against imputing into

the text what Congress did not write. Here, Congress

deliberately left Section 285 silent on who pays the

fees, not even specifying that the losing party must

pay. In any event, the Fourth Circuit’s two-part

premise is inherently flawed: it overlooks wellestablished instances in the American legal system

when attorneys (and non-parties) bear fees, such as

pro-bono representation, contingency cases, and

litigation funding. There is no two-part presumption to

the American Rule. And, in any event, it could not

apply to Section 285 given that this Court and its

progeny have long held non-parties liable for Section

285 awards. See Nelson, 529 U.S. at 472.5

Still, in reaching its conclusion that only parties

are liable for fees under Section 1447(c), the Fourth

Circuit found legislative support for confining that

statute to parties, where its legislative history clearly

discussed “limiting liability to ‘defendant or defendants.’”

Crescent City, 588 F.3d at 827 (citing H.R. 4807, 100th

Cong., 2d Sess. (1988)). There is no such legislative

support in the Patent Act, let alone any that would

explicitly limit the statute to named parties. Nothing

in the legislative history of Section 285 or its

predecessor supports unduly limiting liability for fee

awards to named parties. The Court has already

rejected such a read of Section 285. Nelson, 529 U.S. at

472. In contrast, when Congress wanted to limit the

liability to the named party in intellectual property

statutes, it has done so. See, e.g., 17 U.S.C. § 505

(provision of Copyright Act, allowing court to award

“the recovery of full costs by or against any party

The Federal Circuit has long held other non-attorney third

parties liable for fee awards. See, e.g., Mach. Corp. of Am. v.

Gullfiber AB, 774 F.2d 467, 475 (Fed. Cir. 1985) (holding that

court may assess Section 285 fees against a non-party agent of a

disclosed principal “if his conduct supports a finding that the case

is exceptional”) (citing Hughes v. Novi Am., Inc., 724 F.2d 122

(Fed. Cir. 1984)); see also Insituform Techs., Inc. v. CAT

Contracting, Inc., 385 F.3d 1360, 1374-75 (Fed. Cir. 2004)

(affirming joinder of third party, in part because he “was

personally responsible for many, if not all, of the aggravating

facts which led this court to award attorney’s fees and enhanced

damages”) (quoting case record).

other than the United States or an officer thereof”)

(emphasis added). Its decision to not encumber Section

285 with who is liable or whose conduct is exceptional,

as it has done before, reinforces the plain meaning of

Section 285: it specifies only who can recover the fees,

not who must pay.

Both the Federal Circuit and Fourth Circuit also

purported to rely on Roadway Express in refusing to

impose liability on a party’s counsel. But Roadway

Express concerned another fee-shifting statute, 28

U.S.C. § 1927, that, at the time, spoke only to costs, not

attorney’s fees, explicitly permitting an award of costs

against lawyers who multiply proceedings. 447 U.S. at

757. The statutory interpretation question for the

Court in that case was whether “costs” in Section 1927

included attorney’s fees when fees were not specified.

Id. Consistent with well-established authority, the

Court characterized “the ‘American rule’” as one where

“attorney’s fees ordinarily are not among the costs that

a winning party may recover.” Id. at 759 (citations

omitted). In other words, Roadway Express stands for

the unremarkable proposition that, under the American

Rule’s presumption against fee-shifting, the Court would

not read the word “fees” into a statute limited to “costs.”6

Roadway Express’s interpretation of 42 U.S.C.

§§ 1988 & 2000e-5(k), which authorize fee shifting in

civil rights cases, likewise does not support exempting

attorneys from Section 285 liability. The Court held

that the civil rights fee-shifting statutes do not permit

awards against attorneys because “nothing in the

legislative records of those provisions [] suggests that

Following Roadway Express, Congress amended Section 1927

to explicitly authorize awards of “fees.” See Morris v. Adams-Mills

Corp., 758 F.2d 1352, 1357 n.7 (10th Cir. 1985).

Congress meant to control the conduct of litigation.”

See 447 U.S. at 761. Of course, Section 285’s purpose—

to deter frivolous litigation—centers on controlling the

conduct of litigation, a realm in which counsel are

inherently involved. See Octane Fitness, 572 U.S. at

554 & n.6 (holding Section 285 inquiry should consider,

among other things, “the substantive strength of a

party’s litigating position . . . or the unreasonable

manner in which the case was litigated”). And

sanctions levied against attorneys to deter misconduct

or frivolousness is nothing new. See Arthur L.

Goodhart, Costs, 38 Yale L.J. 849, 871 (1929) (“Thus a

solicitor may have to bear the costs of litigation

unreasonably commenced.”); Lord Chancellor’s Dep’t

of Great Britain, The Rules of the Supreme Court,

1883-1935, 1935 ed., Order 65, R. 11 (permitting

payment of costs by solicitor for delay or misconduct).

The Fourth Circuit’s earlier treatment of a nonanalogous statute without the benefit of Octane

Fitness should not supersede this Court’s analysis or

the Fifth Circuit’s analysis of identical statutory

language involving similar interests and serving a

similar legislative purpose. Taking the Fourth

Circuit’s understanding of the American Rule at face

value would only deepen the circuit split and heighten

the need for this Court’s intervention.

This case provides an ideal vehicle to establish a

clear standard for when attorneys may be held liable

for fees under Section 285. Cf. Kirtsaeng v. John Wiley

& Sons, Inc., 579 U.S. 197 (2016) (providing “additional

guidance” on the application of Copyright Act’s feeshifting statute). Contrary to the Fourth Circuit’s

concerns that imposing such liability on counsel would

“transform what it means to practice law” and cause a

“chilling” effect that discourages legitimate exercises

of right under the law, Crescent City, 588 F.3d at 830,

Section 285 already requires that a case be “exceptional.”

This, along with court discretion, ensures that an

attorney’s liability under Section 285 would not arise

from “the result of an honest but forgivable mistake of

legal judgment” or “the product of a lawyer’s operating

at the behest of a client’s desires and demands.” See id.

at 830-31. By determining the standard under which

attorneys may be liable for a fee award, consistent

with standards for other provisions and rules, the

Court can ensure that no “chilling” effect occurs while

achieving the statute’s purposes to deter frivolous

cases, conserve judicial resources, and benefit the

public good. Cf. Kirtsaeng, 579 U.S. at 204 (holding

and deterring weak ones).

Because the Federal Circuit wrongly followed inapplicable Fourth Circuit law over on-point authority

from the Fifth Circuit and this Court, review is warranted.

C. The Federal Circuit Also Justified Its

Contrary Approach Based on Its Own

Judicial Policymaking Rather Than

Statutory Interpretation

Congress created a patent-specific statute to redress

exceptional conduct. Section 285 curbs “unfairness,”

“bad faith,” “‘or some other equitable consideration of

similar force,’ which made a case so unusual as to

warrant fee-shifting.” Octane Fitness, 572 U.S. at 54849 (citations omitted); Raylon, 700 F.3d at 1372

(“Section 285 was enacted to address a patent-specific

policy rationale,” such as “deter[ring] the ‘improper

bringing of clearly unwarranted suits.’”) (citations

omitted); Rohm, 736 F.2d at 690-92 (holding Section

285 fees aim to deter exceptional litigation tactics and

“prevent a gross injustice to an alleged infringer”)

(quoting S. Rep. No. 1503, 79th Cong., 2d Sess. (1946)).

Because the text is unencumbered, the Court has

cautioned that it “imposes one and only one constraint

on district courts’ discretion”: that the case be

exceptional. Octane Fitness, 572 U.S. at 553. This

discretion reflects Congress’s intent to empower

federal courts to address “equitable considerations,”

Zipes, 491 U.S. at 759, and prescribe the means for

protecting the integrity of their proceedings and the

public interest. Once again, the Federal Circuit

“abandon[s] that holistic, equitable approach,” Octane

Fitness, 572 U.S. at 550, by adopting new unscripted

“constraints on district courts’ discretion” in patent

cases, immunizing even those attorneys responsible

for frivolousness or other litigation misconduct that

makes the case exceptional, see id. at 553, 554 n.6.

The Federal Circuit’s desire that litigants avail

themselves of other statutes and rules as “more

appropriate vehicles,” Pet. App. 12a, is a policy

argument untethered from the patent-specific statute

Congress enacted. Cf. Loper, 144 S. Ct. at 2268 (“Courts

interpret statutes, no matter the context, based on the

traditional tools of statutory construction, not

individual policy preferences.”). And policy arguments

about which of the other available sanctioning

mechanisms a litigant could use provide no basis to

skew the statute or this Court’s precedent. The Federal

Circuit is not free to rewrite this statute as it has done

here. Bartenwerfer v. Buckley, 598 U.S. 69, 81 (2023).

For the Patent Act, like any legislation, “the place for

reconciling competing and incommensurable policy

goals like these is before policymakers,” and the courts’

“limited role is to read and apply the law those

policymakers have ordained.” Romag Fasteners, Inc. v.

Fossil, Inc., 590 U.S. 212, 219 (2020).

In any event, the Federal Circuit’s policy concern is

unpersuasive on its own terms. Federal Rule of Civil

Procedure 11 was inapplicable here. See Pet. App. 11a12a. “Rule 11 is not a fee-shifting statute” and “fees are

not mandated.” Bus. Guides, Inc. v. Chromatic

Commc’ns Enters., Inc., 498 U.S. 533, 534, 553 (1991)

(citations omitted). Rule 11 sanctions are narrow, feeoptional, and outcome-agnostic. See id. Misconduct by

the losing party, untethered to “whether a specific

filing was, if not successful, at least well founded,”

Business Guides, 498 U.S. at 553, is outside Rule 11’s

reach. Even the Federal Circuit has acknowledged

recently that Rule 11 may be unavailable—or

circumvented by a plaintiff—in sanctioning certain

conduct. See PS Prods. Inc. v. Panther Trading Co. Inc.,

122 F.4th 893, 900 & n.2 (Fed. Cir. 2024). Thus, Rule

11 is no substitute to redress the exceptional case.

For similar reasons, neither 28 U.S.C. § 1927 nor the

inherent power provided suitable remedies. Both,

under governing regional circuit authority, require bad

faith—something Octane Fitness expressly eliminated—

and address different legislative intent. Compare

LaSalle Nat’l Bank v. First Conn. Holding Grp., L.L.C.,

287 F.3d 279, 289 (3d Cir. 2002) (Section 1927), and

Chambers v. NASCO, Inc., 501 U.S. 32, 46 (1991) (same,

for inherent power), with Octane Fitness, 572 U.S. at

554-55. Those sanctioning mechanisms are inadequate

for addressing exceptional conduct that may not

constitute bad faith but is otherwise frivolous or

reckless. Forcing litigants to rely on other sanctioning

mechanisms undermines Octane Fitness and the

statute’s purpose.

D. This Case Is an Ideal Vehicle for

Resolving the Conflict and Restoring

Discretion to District Courts

The question presented has weighty legal and

practical implications. Abusive patent litigation is on

the rise. Allured by the hope of substantial verdicts or

sizable settlements and shielded by undisclosed funding

sources and corporate formalities, patent assertion

entities—and the attorneys often behind them—

operate unchecked, pursuing unreasonable litigation

with little risk of accountability. Opportunistic

behavior is rampant.

The “lottery-ticket mentality” in patent litigation

has spawned a surge in cases driven by these patent

assertion entities—an “important phenomenon in the

modern patent system.”7 Many of these cases are nuisance

lawsuits, hinged on frivolous arguments that drag on

for years until the merits finally can be addressed.

High-tech companies cite these suits as a costly drag

on resources, deterring innovation and increasing the

risks associated with launching new products.8

This type of conduct not only impinges upon the

private interests of the named parties, like DISH, but

also undermines the public interest inherent in patent

law. See Precision Instrument Mfg. Co. v. Auto. Maint.

Mach. Co., 324 U.S. 806, 816 (1945) (holding patents

are “affected with a public interest” and are a “special

Fed. Trade Comm’n, The Evolving IP Marketplace: Aligning

Patent Notice and Remedies with Competition, at 62, 162 (Mar.

2011), https://www.ftc.gov/sites/default/files/documents/reports/

evolving-ip-marketplace-aligning-patent-notice-and-remedies-co

mpetition-report-federal-trade/110307patentreport.pdf (citations

omitted).

Id. at 162.

privilege” meant to promote progress while remaining

“free from fraud” and “kept within their legitimate scope”).

The Federal Circuit’s decision eschews joint tortfeasor

liability when an attorney’s conduct gives rise to

exceptionality and short-circuits the Patent Act’s

design. It encourages frivolousness and incentivizes

use of corporate formalities and shell companies to

immunize bad behavior. It will invariably lead to a

paradoxical and unjust result—shell companies who

file frivolous patent cases can receive attorney’s fees if

they win but will never pay fees if they lose. They can

declare insolvency, blame their fee-immune attorneys,

and walk away scot-free. The Federal Circuit’s decision

provides a roadmap for shell companies and their

attorneys to manipulate patent litigation in a way that

has harmed, and will continue to harm, the public

interest. See Mach. Corp. of Am. v. Gullfiber AB, 774

F.2d 467, 471 (Fed. Cir. 1985) (fees in exceptional cases

should “strike a balance between the interest of the

patentee in protecting his statutory rights and the

interest of the public in confining such rights to their

legal limits.”) (citation omitted).

Construing Section 285 to exclude counsel liability

creates a nefarious loophole that leaves only the

prevailing party holding the bag, effectively reducing

the statute in many instances to a one-sided enforcement mechanism. If Section 285 is to be read fairly, it

must be read to permit discretion in fashioning

appropriate awards given the circumstances of the

case and the nature of the exceptionality regardless of

whether the prevailing party is the plaintiff or the

defendant. Joint and several liability of attorneys who

are responsible for a case’s exceptionality merely

follows the statute’s broad language and guarantees

fairness for all litigants.

These issues need not percolate further. Courts

are confronting rampant frivolousness and attorney

misconduct in patent litigation. See Backertop Licensing

LLC v. Canary Connect, Inc., 107 F.4th 1335, 1337 (Fed.

Cir. 2024). (investigating “potential attorney and party

misconduct”); see generally In re Nimitz Techs. LLC,

No. 2023-103, 2022 WL 17494845 (Fed. Cir. Dec. 8,

2022) (affirming order addressing concerns of fraud or

improper shielding of liability through use of shell

companies); see also VDPP, LLC v. Volkswagen Grp. of

Am., Inc., No. H-23-2961, 2024 WL 3378456, at *4 (S.D.

Tex. July 11, 2024) (finding “both [nonpracticing entity]

and its counsel have made this case exceptional” based

on “repeated misconduct”); Iris Connex, LLC v. Dell,

Inc., 235 F. Supp. 3d 826, 860 (E.D. Tex. 2017) (“[O]ne

cannot abuse the judicial process through the creation

of shell entities to facilitate the assertion of otherwise

meritless claims as part of a scheme to avoid the risks

that Section 285 creates.”).

For example, Chief Judge Connolly of the District of

Delaware, which sees an average of 700 patent suits

annually,9 flagged one local patent attorney as a

“prolific filer of patent cases in our court,” having “filed

more than 770 patent cases in this district since

January 1, 2019.” Nimitz Techs. LLC v. CNET Media,

Inc., No. CV 21-1247-CFC, 2022 WL 17338396, at *6

(D. Del. Nov. 30, 2022). The set of facts underlying

some of those cases gave rise to Chief Judge Connolly’s

concerns that certain patent lawyers, and not their

clients, were behind all litigation decisions and had

“perpetrated a fraud on the court” by fraudulently

Annual Report of the United States District Court for the

District of Delaware to the Federal Bar Association 2024, at 9,

https://www.ded.uscourts.gov/sites/ded/files/news/FINAL%20Co

urt%20Report2024%20.pdf (last visited Jan. 6, 2025).

conveying the asserted patent to a shell company

“designed to shield those parties from the potential

liability they would otherwise face” in asserting the

patent in court. Id. at *26; see also id. at *7-8 & n.5

(discussing counsel’s representation in 15 patent cases

and ensuing misconduct).

The resulting pattern here is patently obvious—

attorneys file weak cases and hide behind judgmentproof corporate shells in so doing. This disrupts the

orderly administration of justice and, plainly, is a

scourge on the legal system. Congress wanted federal

courts to have discretion in patent law to protect the

public interest and curb litigation abuses and enacted

special protections in the Patent Act to do so. Given its

broad language, nothing in the Patent Act forbids a

federal court from awarding fees against an active

participant in the misconduct—even the attorney.

These potential consequences amply warrant this

Court’s intervention. This case provides a perfect

vehicle.

II. The Federal Circuit’s Categorical Exclusion

of Administrative Agency Fees to Accused

Infringers—an Important Issue of First

Impression—Clashes with This Court’s

Precedent, the Statutory Language, and

Legislative Intent

The Federal Circuit’s conclusion that Section 285

categorially prohibits accused infringers’ recovery of

fees incurred during IPRs also breaks new ground on

another question of exceptional importance. The

Federal Circuit precluded recovery of IPR fees based

solely on its reasoning that DISH “voluntarily” elected

to pursue its invalidity defense at the administrative

agency rather than in district court. Pet. App. 8a-11a.

In conceiving yet another unstated exception in the

statute, the Federal Circuit failed to apply, let alone

discuss, this Court’s longstanding test for determining

recoverability of fees for parallel administrative

proceedings (even voluntary ones) under a federal feeshifting statute.

A. The Federal Circuit Failed to Apply the

Court’s Established Test for Extending

a Fee-Shifting Statute to an Administrative Proceeding

The Federal Circuit reasoned that DISH’s IPR fees

are irrecoverable because the administrative proceeding

was “voluntary.” Pet. App. 8a-10a. That reasoning

flouts this Court’s precedent, violates the plain

statutory text, clashes with the congressional design

behind the statutory scheme for IPRs, and favors

patent holder plaintiffs over accused infringer

defendants, all in one stroke.

In Webb v. Board of Education of Dyer County,

Tennessee, 471 U.S. 234, 243 (1985), the Court held

that fees may be recovered if “the work product from

the administrative proceedings was work that was

both useful and of a type ordinarily necessary to

advance” the litigation. For example, fees spent in an

administrative proceeding that were “equivalent” to

the time that would have been spent in litigation could

be properly recoverable. Id. at 243 n.19. This is an

“equitable judgment” and “[t]here is no precise rule or

formula for making these determinations.” See

Hensley v. Eckerhart, 461 U.S. 424, 436-37 (1983).

Elaborating on Webb, in Sullivan v. Hudson, 490 U.S.

877, 888 (1989), the Court permitted recovery of fees

“where administrative proceedings are intimately tied

to the resolution of the judicial action and necessary to

the attainment of the results Congress sought to

promote by providing for fees,” as “part and parcel of

the action for which fees may be awarded.”

The Federal Circuit did not acknowledge either

Webb or Sullivan, much less adhere to their standards,

which would have easily warranted DISH’s recovery of

its IPR fees under Section 285. Congress enacted IPRs

to reign in litigation expenses and provide administrative relief “in lieu of ” the district court litigation. See

PPC Broadband, Inc. v. Corning Optical Commc’ns RF,

LLC, 815 F.3d 734, 741 (Fed. Cir. 2016) (“Congress

intended these [AIA] programs to provide ‘quick and

cost effective alternatives’ to litigation in the courts.”)

(citing legislative history); H. R. Rep. No. 112-98(I), pt.

1, p. 40 (2011) (“The legislation is designed to establish

a more efficient and streamlined patent system that

will improve patent quality and limit unnecessary and

counterproductive litigation costs.”). By design, courts

often stay litigations so that the petitioner can

efficiently challenge the validity of the claims in the

IPR. Statutory estoppel prevents relitigating the same

issues in district court that are raised in the IPR. 35

U.S.C. § 315(e)(2). So, the IPR necessarily advances

and narrows the landscape of the litigation by

resolving invalidity challenges and preventing parties

from relitigating those issues in district court. The

statutory scheme thus condones two alternative paths

to litigate validity.

That congressional intent to provide an alternative

to litigation was fully realized here. DISH opted to

pursue an IPR rather than litigate validity in federal

court, choosing this more cost-effective alternative. In

doing so, it agreed to be fully estopped from advancing

the same invalidity defenses in district court and

successfully moved to stay the underlying litigation

pending the outcome of the IPR. Ultimately, the Board

invalidated the patent, terminating the underlying

litigation. DISH’s IPR was “both useful and of a type

ordinarily necessary to advance” the litigation, see

Webb, 471 U.S. at 243, by obviating the need for the

lawsuit altogether. Invalidating the patent resolved

the judicial action and achieved the results Congress

intended to promote under the “interlocking system of

judicial and administrative avenues to relief.” See

Sullivan, 490 U.S. at 888-89.

In basing its opinion on the voluntary nature of

filing an IPR, the Federal Circuit likewise ignored this

Court’s longstanding precedent that fees for voluntary

administrative proceedings may be recoverable. In

Pennsylvania v. Delaware Valley Citizens’ Council for

Clean Air, 478 U.S. 546, 558 (1986), for example, the

Court condoned recovery of the “time spent pursuing

optional administrative proceedings” so long as the

work was “‘useful and of a type ordinarily necessary’

to secure the final result obtained from the litigation.”

Id. at 561 (citing Webb, 471 U.S. at 243). And it held

that recoverable actions need not be “‘judicial’ in the

sense that they did not occur in a courtroom or involve

‘traditional’ legal work[,]” so long as they are “as

necessary to the attainment of adequate relief for their

client” as other work. Id. at 558. In this case, DISH’s

administrative proceeding was not only useful but

dispositive of the underlying litigation, achieving

the desired outcome. The Federal Circuit’s decision

contradicts Delaware Valley, which it made no attempt

to address.

In any event, IPRs are not “voluntary” proceedings,

as the Federal Circuit observed (Pet. App. 15a) but are

coercive in nature. For petitioners, as Judge Bencivengo

observed in her dissent below, “contest[ing] the

validity of [asserted] patents in response to [a patent

owner’s] meritless infringement suit” cannot be

considered “voluntary.” Pet. App. 15a.

This is especially true when a complaint, like here,

triggers a one-year statutory bar by which an accused

infringer, like DISH, must file an IPR petition or lose

the right. See 35 U.S.C. § 315(b). And patent owners

have no realistic choice but to defend themselves

against IPR invalidity challenges—any other option

risks invalidation of their asset. Characterizing IPRs

as “voluntary,” as the Federal Circuit does, ignores the

realities of what is “voluntary” in adversarial proceedings. DISH’s decision to pursue a post-litigation IPR

and Dragon’s decision to defend against it are not

strictly voluntary since each would have forfeited

rights had it not done so. As such, the Federal Circuit’s

rationale that DISH’s IPR was “voluntary” is unpersuasive even on its own terms.

The Federal Circuit’s decision contradicts the plain

statutory text as well. The Patent Act itself (Title 35)

both permits fee-shifting for an “exceptional case”

(Section 285) and uses the word “cases” to refer to

patent office proceedings (Section 23). Thus, patent

office proceedings are among the types of “cases” for

which fees may be recovered under Section 285, which

is unsurprising given their place in the same act and

statutory framework. Had Congress wanted to limit

fee-shifting to district court litigation for patent

infringement, it could have limited Section 285 to “civil

actions,” as it has done elsewhere. See, e.g., 35 U.S.C. §

281 (“civil action”); see also id. § 282 (“action”).

B. The Federal Circuit’s Decision Creates

Distinctions That Serve No Purpose

The Federal Circuit’s decision also creates needless

ambiguity by introducing distinctions that undermine

the statute’s broad purpose and harm the public

interest. Section 285 is not party-specific—any prevailing

party may recover fees in an exceptional case, whether

a prevailing plaintiff or prevailing defendant.

The Federal Circuit, however, deems IPRs voluntary

for patent challengers, Pet App. 8a-10a, which can only

fairly imply they are involuntary for patent owners.

But such a distinction would again have a perverse

outcome: accused infringers can never recover their

IPR fees while patent owners can. By this reasoning, a

once party-agnostic statute morphs into one with

party-specific distinctions where none exist in the text

or legislative history. Such a twisted reading turns the

statute into a one-way remedy, favoring shell companies,

prejudicing accused infringers, and harming the public

interest. That uneven playing field is not what

Congress intended.

C. This Case Is an Ideal Vehicle for Resolving This Important and Recurring Issue

This case turns upon a pure question of statutory

interpretation, making it an ideal vehicle to address a

pervasive problem. Up to 80% of IPR petitions stem

from underlying litigation.10 This is by design. Congress

intended accused infringers to avail themselves of

the IPR remedy to streamline patent litigation and

reduce costs.

The Federal Circuit’s decision circumvents this

statutory scheme. It encourages the opposite result—

for accused infringers to dispense with IPR proceedings

in favor of litigating in federal court, where they could

Patent Trial and Appeal Board Parallel Litigation Study,

USPTO, at 3 (June 2022), https://www.uspto.gov/sites/default/

files/documents/ptab_parallel_litigation_study_20220621_.pdf.

advance the same invalidity defenses that could be

brought in the IPR but now stand eligible to recover

their attorney’s fees. It also offers no disincentives

for advancing frivolous arguments between the two

forums—rather, it immunizes such bad behavior.

Nothing inhibits patent owners from advancing paradoxically inconsistent positions between the underlying

litigation and the IPR. The statutory barrier to such

frivolousness is to allow federal courts discretion

under Section 285 to consider “the substantive

strength of a party’s litigating position” between the

two forums “or the unreasonable manner in which the

case was litigated.” See Octane Fitness, 572 U.S. at 554.

Congress already gave courts that authority. It is time

to honor it.

The Federal Circuit’s decision simply reflects yet

another unwarranted limitation on the scope of a

statute whose text and purpose Congress intended to

be broadly construed. In evaluating this issue, the

Federal Circuit raised a parade of horribles for

enforcing this statute that is entirely speculative and

bears no resemblance to the realities of judicial

administration. According to the Federal Circuit,

tasking courts with evaluating agency proceedings in

a Section 285 analysis could present unspecified

challenges. See Pet. App. 10a-11a. Far from inadvertently creating “an effing nightmare,”11 Congress

simply entrusted district courts with broad discretion

to evaluate the whole case, determine exceptionality,

and, where present, decide an appropriate award—the

type of discretion judges have long undertaken based

Jeff Overley, Circuit-By-Circuit Guide To 2024’s Most

Memorable Moments, LAW360 (Dec. 16, 2024), https://www.

law360.com/legalindustry/articles/2272787/circuit-by-circuit-guideto-2024-s-most-memorable-moments.

on the totality of the circumstances. As Judge

Bencivengo rightly observed in her dissent, Pet. App.

16a-17a, enforcing this statute presents no greater

difficulty than the routine task of assessing fees in a

district court proceeding. Cf. Kirtsaeng, 579 U.S. at 208

(holding that, in fee-shifting context, courts “are

capable of distinguishing between those [reasonable]

defenses (or claims) and the objectively unreasonable

variety”). The true disruption lies not in following the

statute as written, but in ignoring Congress’s choice

and substituting it for another—one that arbitrarily

denies a party reimbursement for fees reasonably

expended in an administrative proceeding that proved

integral to that party’s success in the underlying

litigation. This outcome undermines the very

principles of fairness and efficiency the statute was

designed to uphold.

Because the Federal Circuit’s decision clashes with

the statutory text and this Court’s precedent and

creates loopholes that patent owners and their attorneys

will exploit to the detriment of unfairly accused

infringers and the public, review is amply warranted.

CONCLUSION

The Court should grant the petition.

Respectfully submitted,

G. HOPKINS GUY III

BAKER BOTTS L.L.P.

1001 Page Mill Road

Building One, Suite 200

Palo Alto, CA 94304

(650) 739-7500

LAUREN J. DREYER

Counsel of Record

JAMIE R. LYNN

BAKER BOTTS L.L.P.

700 K Street, N.W.

Washington, DC 20001

lauren.dreyer@bakerbotts.com

(202) 639-7700

Counsel for Petitioner DISH Network L.L.C.

January 8, 2025

APPENDIX

APPENDIX TABLE OF CONTENTS

Page

Appendix A: Opinion of the United States

Court of Appeals for Federal Circuit (May

20, 2024) .......................................................

Appendix B: Order of the United States

District Court for the District of Delaware

adopting the Report and Recommendation

of the Magistrate Judge (November 8,

2021)..............................................................

18a

Appendix C: Memorandum of the United

States District Court for the District of

Delaware regarding the Report and

Recommendation

(November 5, 2021) ......................................

20a

Appendix D: Report and Recommendation of

the United States District Court for the

District of Delaware of the Magistrate

Judge regarding the Motions to Declare

Case Exceptional (August 16, 2021) ............

33a

Appendix E: Order of the United States

District Court for the District of Delaware

awarding Attorneys’ Fees and Expenses

(March 7, 2022).............................................

60a

Appendix F: Order of the United States

Court of Appeals for Federal Circuit

Denying Petition for en banc rehearing

(October 10, 2024) ........................................

62a

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

————

2022-1621, 2022-1777

————

DRAGON INTELLECTUAL PROPERTY LLC,

Plaintiff-Cross-Appellant

DISH NETWORK L.L.C.,

Defendant-Appellant

ROBERT E. FREITAS, FREITAS & WEINBERG LLP,

Respondents-Appellees

————

Appeals from the United States District Court for

the District of Delaware in No. 1:13-cv-02066-RGA,

Judge Richard G. Andrews.

————

2022-1622, 2022-1779

————

DRAGON INTELLECTUAL PROPERTY LLC,

Plaintiff-Cross-Appellant

SIRIUS XM RADIO INC.,

Defendant-Appellant

ROBERT E. FREITAS, FREITAS & WEINBERG LLP,

Respondents-Appellees

————

Appeals from the United States District Court for

the District of Delaware in No. 1:13-cv-02067-RGA,

Judge Richard G. Andrews.

————

Decided: May 20, 2024

————

JAMES F. MCDONOUGH, III, Rozier Hardt McDonough

PLLC, Atlanta, GA, argued for plaintiff-cross-appellant.

LAUREN J. DREYER, Baker Botts LLP, Washington,

DC, argued for all defendants-appellants. Defendantappellant DISH Network L.L.C. Also represented by

JAMIE ROY LYNN; GEORGE HOPKINS GUY, III,

Palo Alto, CA; SPENCER JAMES PACKARD,

Houston, TX.

MARK BAGHDASSARIAN, Kramer Levin Naftalis &

Frankel LLP, New York, NY, for defendant-appellant

Sirius XM Radio Inc. Also represented by SHANNON

H. HEDVAT.

ROBERT E. FREITAS, Freitas & Weinberg LLP,

Redwood Shores, CA, argued for respondents-appellees.

Also represented by DANIEL J. WEINBERG, Hopkins

& Carley, ALC, Redwood City, CA.

Before MOORE, Chief Judge, STOLL, Circuit Judge,

and BENCIVENGO, District Judge. 1

Opinion for the court filed by Chief Judge MOORE.

Opinion dissenting-in-part filed by District Judge

BENCIVENGO.

MOORE, Chief Judge.

DISH Network L.L.C. (DISH) and Sirius XM Radio

Inc. (SXM) (collectively, Appellants) appeal the United

States District Court for the District of Delaware’s

denial-in-part of Appellants’ motion for attorneys’ fees

under 35 U.S.C. § 285. Dragon Intellectual Property,

LLC (Dragon) cross-appeals the district court’s grantin-part of attorneys’ fees. For the following reasons, we

affirm.

BACKGROUND

Dragon separately sued DISH, SXM, and eight other

defendants in December 2013, alleging infringement

of claims of U.S. Patent No. 5,930,444. In response,

DISH and SXM each sent letters to Freitas & Weinberg

LLP, Dragon’s counsel, explaining their products were

not covered by the ’444 patent and a reasonable presuit investigation would have shown the accused

products could not infringe the asserted claims.

Dragon continued to pursue its infringement claims.

In December 2014, DISH filed a petition seeking

inter partes review of the ’444 patent. The Patent Trial

and Appeal Board instituted review and subsequently

granted SXM’s request for joinder under 35 U.S.C.

§ 315(c). The district court stayed proceedings as to

Honorable Cathy Ann Bencivengo, District Judge, United

States District Court for the Southern District of California,

sitting by designation.

DISH and SXM pending resolution of the Board’s

review but proceeded with claim construction as to the

other eight defendants.

After the consolidated claim construction hearing,

Freitas & Weinberg LLP withdrew as Dragon’s counsel.

Based on the claim construction order, Dragon, DISH,

SXM, and the other eight defendants stipulated to

noninfringement as to the accused products, and the

district court entered judgment of noninfringement in

favor of all defendants. Subsequently, the Board issued

a final written decision holding unpatentable all

asserted claims. See DISH Network L.L.C. v. Dragon

Intell. Prop., LLC, No. IPR2015-00499, 2016 WL

3268756 (PTAB June 15, 2016).

In August 2016, DISH and SXM moved for

attorneys’ fees under 35 U.S.C. § 285 and 28 U.S.C.

§ 1927. Before the motions were resolved, Dragon

appealed both the district court’s judgment of noninfringement and the Board’s final written decision.

We affirmed the Board’s decision, Dragon Intell. Prop.,

LLC v. DISH Network LLC, 711 F. App’x 993 (Fed. Cir.

2017), and dismissed the parallel district court appeal

as moot, Dragon Intell. Prop., LLC v. Apple Inc., 700 F.

App’x 1005 (Fed. Cir. 2017). On remand, Dragon moved

to vacate the district court’s judgment of noninfringement and to dismiss the case as moot. The district

court vacated the judgment of noninfringement as

moot but retained jurisdiction to resolve Appellants’

fees motions.

In November 2018, the district court denied

Appellants’ motions for attorneys’ fees. The district

court held neither DISH nor SXM was a prevailing

party because invalidating the patent through IPR

proceedings was not a basis for attorneys’ fees. We

reversed and remanded, holding Appellants were

prevailing parties under § 285 because they successfully invalidated the asserted claims in a parallel IPR

proceeding. Dragon Intell. Prop., LLC v. DISH Network

LLC, 956 F.3d 1358, 1361–62 (Fed. Cir. 2020).

Based on a magistrate judge report and

recommendation and its own analysis, the district

court determined these cases were exceptional and

granted-in-part Appellants’ motion for attorneys’ fees

under § 285 to the extent Appellants sought fees from

Dragon for time spent litigating. The district court

denied-in-part the motion to the extent Appellants

sought attorneys’ fees incurred solely during the IPR

proceedings and recovery from Dragon’s former

counsel, Freitas & Weinberg LLP and attorney Robert

Freitas (collectively, Freitas), holding § 285 does not

permit either form of recovery. DISH and SXM appeal

the denial-in-part of fees. Dragon cross-appeals the

district court’s grant-in-part of fees. We have

jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).

DISCUSSION

We first address Dragon’s cross-appeal. A district

court “in exceptional cases may award reasonable

attorney fees to the prevailing party.” 35 U.S.C. § 285.

“[A]n ‘exceptional’ case is simply one that stands out

from others 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). Dragon challenges the district court’s

determination that these cases were “exceptional”

under § 285.

We review exceptionality determinations for abuse

of discretion. Highmark Inc. v. Allcare Health Mgmt.

Sys., Inc., 572 U.S. 559, 564 (2014). A district court

abuses its discretion when it “fail[s] to conduct an

adequate inquiry.” Atl. Rsch. Mktg. Sys., Inc. v. Troy,

659 F.3d 1345, 1360 (Fed. Cir. 2011).

The district court determined these cases were

exceptional based on “the substantive strength of

Dragon’s infringement position.” Dragon Intell. Prop.,

LLC v. Dish Network L.L.C., No. 13-2066, 2021 WL

3616147, at *6 (D. Del. Aug. 16, 2021) (Magistrate Rep.

and Rec.). The bases for exceptionality included clear

prosecution history disclaimer, which precluded a

finding of infringement by any of the accused products;

public availability of information demonstrating noninfringement by the accused products before Dragon

filed the infringement suits; notice of noninfringement

sent by Appellants to Dragon after the complaints

were filed; and Dragon’s continued litigation after

being put on notice of the objective baselessness of its

infringement allegations. Id. at *6–7.

Dragon’s argument is premised on its assertion that

vacatur of the noninfringement judgment invalidated

the prior claim construction order. Dragon Principal

and Resp. Br. 54–64. Dragon contends an award of fees

based on the district court’s claim construction exposes

it to harm based on an unreviewable decision. Id. at

63–64 (citing United States v. Munsingwear, Inc., 340

U.S. 36, 40 (1950)). Therefore, Dragon argues, the

district court’s reliance on its prior conclusion of clear

prosecution history disclaimer was improper and its

exceptionality inquiry was inadequate. We do not agree.

The district court did not abuse its discretion by

relying on its prior adjudication of prosecution disclaimer during claim construction. After we dismissed

Dragon’s noninfringement appeal as moot and remanded

to the district court, Dragon moved under Federal Rule

of Civil Procedure 60(b)(6) requesting the district court

“vacate [its] final judgments of non-infringement” and

dismiss the cases as moot. The district court vacated

its noninfringement judgments but declined to dismiss

the cases, retaining jurisdiction to resolve Appellants’

fee motions. Dragon Intell. Prop., LLC v. Apple, Inc., No.

13-2058, 2018 WL 4658208, at *2–3 (D. Del. Sep. 27,

2018). Dragon did not request, and the district court

did not grant, vacatur of the claim construction order.

Dragon’s argument that vacatur of the noninfringement judgment required the district court to ignore its

claim construction order in determining exceptionality

is incorrect. The district court was not required to

relitigate claim construction for an invalidated patent

to resolve Appellants’ fee motions. Unlike Munsingwear,

which concerned application of res judicata when

intervening mootness prevented a non-prevailing party

from obtaining judicial review, Munsingwear, 340 U.S.

at 38–39, Dragon is not at risk of harm by enforcement

of the district court’s claim construction order.

Even though vacatur of the noninfringement judgment

did not entitle Dragon to a claim construction do-over,

the magistrate judge independently considered whether

the prosecution history disclaimed the functionality of

the accused devices in her exceptionality inquiry.

Magistrate Rep. and Rec. at *6 n.10 (noting the clear

and unambiguous prosecution history disclaimer of

accused products and rejecting Dragon’s argument of

entitlement to “a do-over on a clean slate”). The district

court analyzed the prosecution history multiple times

for this very issue. See id.; Dragon Intell. Prop., LLC v.

Apple, Inc., No. 13-2058, 2015 WL 5298938, at *4 (D.

Del. Sep. 9, 2015) (claim construction order); Dragon

Intell. Prop., LLC v. DISH Network L.L.C., No. 13-2066,

2021 WL 5177680, at *2 (D. Del. Nov. 8, 2021)

(granting-in-part fees under § 285). Dragon has not

presented any grounds for holding that this constitutes

an inadequate inquiry.

We hold the district court did not abuse its discretion

in declaring these cases exceptional and affirm the

district court’s grant-in-part of Appellants’ motions for

attorneys’ fees.

We next address Appellants’ appeal of the denialinpart of fees. Appellants argue the district court erred

in denying attorneys’ fees incurred during the IPR

proceedings and declining to hold Freitas jointly and

severally liable with Dragon for the fee award. The

district court concluded § 285 did not permit either

form of recovery. We review the scope of § 285 de novo.

Waner v. Ford Motor Co., 331 F.3d 851, 857 (Fed. Cir.

2003). We hold § 285 does not entitle Appellants to

recovery of fees incurred in parallel IPR proceedings

and does not entitle Appellants to hold Dragon’s

counsel jointly and severally liable for fees.

A. Fees Incurred in IPR Proceedings

Appellants challenge the district court’s conclusion

that fees incurred in the parallel IPR proceedings are

not recoverable under § 285. Appellants contend the

IPR proceedings were “part and parcel” of the case, and

the optional nature of IPR proceedings does not compel

the denial of IPR fees. We do not agree.

Appellants voluntarily pursued parallel proceedings

in front of the Board instead of arguing invalidity

before the district court. Indeed, there are advantages

to doing so. In district court, challengers must prove

each patent claim invalid by clear and convincing

evidence. Microsoft Corp. v. i4i Ltd. P’ship, 564 U.S. 91,

95 (2011). Before the Board, petitioners need only

establish unpatentability by a preponderance of the

evidence. 35 U.S.C. § 316(e). By statute, IPR proceedings must be completed within one year of institution,

35 U.S.C. § 316(a)(11), providing an expeditious

alternative to potentially years-long litigation. Based

on these advantages, parties often strategically choose

to argue invalidity before the Board. The “vast

majority” of IPR petitioners are sued by patent owners

in another venue before filing petitions. UNITED

STATES PATENT AND TRADEMARK OFFICE, PATENT TRIAL

AND APPEAL BOARD PARALLEL LITIGATION STUDY 3

(June 2022). In cases where a party voluntarily elects

to pursue an invalidity challenge through IPR proceedings, we see no basis for awarding IPR fees under

§ 285. The dissent takes issue with characterization of

Appellants’ participation in IPR proceedings as

“voluntary.” Appellants were not compelled to argue

invalidity before the Board. Eight other defendants

chose not to pursue such proceedings and continued to

litigate in district court.

Our holding is consistent with PPG Industries v.

Celanese Polymer Specialties Co., 840 F.2d 1565 (Fed.

Cir. 1988), on which Appellants rely. In PPG, we held

that fees incurred by a defendant in reissue proceedings were recoverable under § 285. Id. at 1568–69. The

district court in PPG denied the defendant reissue

fees, reasoning participation in the reissue proceedings was “non-mandatory” and the party had the

option of arguing validity before the court. PPG Indus.

v. Celanese Polymer Specialties Co., 658 F. Supp. 555,

561 (W.D. Ky. 1987). We reversed on the grounds that

the defendant’s participation in the reissue proceedings was “not optional” because the plaintiff had

initiated the reissue proceedings and “forced” the

defendant to perform before the Board “precisely the

10a

same type of work” the defendant would have

performed at trial, so the defendant “had no other

option available.” PPG Indus., 840 F.2d at 1568. Those

are not the circumstances here, where Appellants’

initiation of and participation in the IPR proceedings

was voluntary.

Appellants also argue the district court misapplied

our holding in Amneal Pharmaceuticals LLC v. Almirall,

LLC, 960 F.3d 1368 (Fed. Cir. 2020), in concluding IPRs

are not “cases” under § 285. In Amneal, we denied the

patent owner’s request for fees incurred in IPR

proceedings because “section 285 does not authorize

[us] to award fees for work that was done before the

agency on appeal from an IPR.” Id. at 1371–72. We

rejected the patent owner’s argument that our

previous guidance to view cases “more as an ‘inclusive

whole’ . . . when analyzing fee-shifting under § 285,”

Therasense, Inc. v. Becton, Dickinson & Co., 745 F.3d

513, 516–17 (Fed. Cir. 2014) (citation omitted),

required application of § 285 to fees incurred in IPR

proceedings. Amneal, 960 F.3d at 1371–72. We

specifically noted “we were clearly only referring to

district court and appellate court proceedings.” Id. at

1372. Appellants argue Amneal is distinguishable

because there we denied fees for an IPR instituted

before any district court suit was filed, see id. at 1370,

but here the IPR was filed after Dragon filed suit in

district court. While true, this distinction neither

renders irrelevant Amneal’s analysis of § 285 nor

creates inconsistency with our precedent.

We note that a district court is particularly wellpositioned to determine whether a case before it is

exceptional because it “lives with the case over a

prolonged period of time.” Highmark, 572 U.S. at 564.

Were “cases” under § 285 to include IPR proceedings,

11a

district court judges would be tasked with evaluating

the exceptionality of arguments, conduct, and behavior

in a proceeding in which they had no involvement.

Such an inquiry is inconsistent with the rationale

articulated in Highmark and the deference with which

we review exceptionality determinations. See id.

Indeed, the district court determined these cases

exceptional based on Dragon’s substantive litigation

position in the district court and its finding of clear

prosecution history disclaimer. These bases for

exceptionality are wholly unrelated to parallel

proceedings before the Board.

For these reasons, we reject Appellants’ argument

that § 285 allows recovery of fees incurred in the

voluntarily undertaken parallel IPR proceedings.

B. Attorney Liability

Appellants challenge the district court’s holding

that a party’s counsel of record cannot be held jointly

and severally liable for fee awards under § 285.

Appellants argue § 285 permits wide discretion in

fashioning fee awards based on the circumstances of

the case. We agree with the district court’s analysis

and hold that liability for attorneys’ fees awarded

under § 285 does not extend to counsel.

We find support for this conclusion in the text of the

statute. Section 285 is silent as to who can be liable for

a fee award. Conversely, other statutes explicitly allow

parties to recover costs and fees from counsel. For

example, under 28 U.S.C. § 1927, “[a]ny attorney . . .

who so multiplies the proceedings in any case

unreasonably and vexatiously may be required by the

court to satisfy personally the excess costs, expenses,

and attorneys’ fees reasonably incurred because of

such conduct.” Similarly, Federal Rule of Civil

12a

Procedure 11 expressly allows the court to impose

monetary sanctions on attorneys and law firms, which

can include “all of the reasonable attorney’s fees and

other expenses” incurred as a result of sanctionable

conduct. Fed. R. Civ. P. 11(c)(1), (c)(4). Section 285,

however, does not identify counsel as liable for a fee

award. Statutes and rules that expressly identify

counsel as liable are more appropriate vehicles to

recover fees from counsel.

Appellants acknowledge that other courts have

similarly declined to extend liability under fee-shifting

statutes to counsel when the statute is silent on the

issue, see, e.g., In re Crescent City Ests., LLC, 588 F.3d

822, 825 (4th Cir. 2009), but argue Congress’ inclusion

of exceptionality language in § 285 indicates intent to

allow recovery of fee awards from counsel and parties

alike. We do not agree. That Congress has expressly

allowed recovery of costs and fees against counsel

elsewhere but intended to imply such a provision in §

285 with exceptionality language is untenable. Cf.

Roadway Exp., Inc. v. Piper, 447 U.S. 752, 761 (1980)

(refusing to allow “costs” recoverable against counsel

under 28 U.S.C. § 1927 (1948) to include attorneys’ fees

by reading in such a provision where the statute was

silent). The requirement of § 285 that a case be

exceptional for the prevailing party to recover

attorneys’ fees does not create by implication a

presumption that liability can extend to counsel.

When, as here, the statute does not provide for fee

awards against attorneys and other statutes expressly

do for similar types of conduct, it is reasonable to

conclude, as the district court did, that fees cannot be

assessed against counsel.

Appellants argue we have previously allowed

assessment of § 285 fees against non-parties based on

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the nature of the case’s exceptionality. Appellants rely

primarily on Ohio Cellular Products Corp. v. Adams

USA, Inc., where we affirmed a determination that the

plaintiff’s president and sole shareholder, who committed

inequitable conduct during prosecution of a patent,

could be joined as a third-party against whom fees

could be collected. 175 F.3d 1343, 1352 (Fed. Cir. 1999),

rev’d sub nom. Nelson v. Adams USA, Inc., 529 U.S. 460

(2000). The Supreme Court reversed our opinion on

due process grounds but noted its decision “surely does

not insulate” the third party “from liability.” Nelson,

529 U.S. at 472. Unlike here, the third-party in Nelson

was not counsel for either party. In no case have we

imposed liability against a third party because they

were a party’s attorney. We see no basis in our

precedent to allow Appellants to recover § 285 fees

from counsel, especially where, as here, exceptionality

was based on Dragon’s substantive litigation position

and not on counsel’s manner of litigating.

For these reasons, we reject Appellants’ argument

that § 285 allows Freitas to be held jointly and

severally liable for the fee award and affirm the

district court’s denial-inpart of fees.

CONCLUSION

We have considered the parties’ remaining

arguments and find them unpersuasive. We affirm the

district court’s judgment granting-in-part and

denying-in-part Appellants’ motions for attorneys’

fees.

AFFIRMED

COSTS

No costs.

14a

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

————

2022-1621, 2022-1777

————

DRAGON INTELLECTUAL PROPERTY LLC,

Plaintiff-Cross-Appellant

DISH NETWORK L.L.C.,

Defendant-Appellant

ROBERT E. FREITAS, FREITAS & WEINBERG LLP,

Respondents-Appellees

————

Appeals from the United States District Court for

the District of Delaware in No. 1:13-cv-02066-RGA,

Judge Richard G. Andrews.

————

2022-1622, 2022-1779

————

DRAGON INTELLECTUAL PROPERTY LLC,

Plaintiff-Cross-Appellant

SIRIUS XM RADIO INC.,

Defendant-Appellant

15a

ROBERT E. FREITAS, FREITAS & WEINBERG LLP,

Respondents-Appellees

————

Appeals from the United States District Court for

the District of Delaware in No. 1:13-cv-02067-RGA,

Judge Richard G. Andrews.

————

BENCIVENGO, District Judge, dissenting-in-part.

I join Parts I and II.B of the majority’s opinion, but

I respectfully dissent from Part II.A. The majority

categorically holds that § 285 does not entitle a

defendant to recover fees incurred in IPR proceedings

that the defendant sought to institute after being sued

for infringement. I disagree.

The majority, by characterizing Appellants’ election

to utilize IPR as “voluntary” and “parallel” to the

district court litigation, holds that there is no basis for

awarding IPR fees under § 285. Appellants did not

“voluntarily” seek to invalidate Dragon’s patents through

IPR as would arguably have been the case had

Appellants initiated IPR before Dragon filed this

lawsuit. Instead compelled to contest the validity of

Dragon’s patents in response to Dragon’s meritless

infringement suit, Appellants exercised their statutory

option to litigate their affirmative invalidity defenses

in IPR.

As contemplated by the creation of IPR, Appellants

utilized this substitute venue pursuant to 35 U.S.C.

§ 315(b) for efficiencies in lieu of district court

proceedings. There are advantages in doing so for

challengers to be sure, as the majority points out, but

there are also constraints. For instance, the challenge

must be submitted fully formed within 12 months of

16a

the suit being served with little, if any, discovery. The

results are binding. Estoppel provisions preclude the

challenger from asserting in the district court invalidity arguments that were raised or could have been

raised in IPR. 35 U.S.C. § 315(e)(2).

In this case the IPR was not “parallel” to the district

court litigation. The Appellants were not litigating

invalidity, or anything else, in parallel in the district

court. To the contrary, at Appellants’ request, the

district court stayed the litigation pending the outcome

of the IPR. The IPR, therefore, substituted for district

court litigation on Appellants’ validity challenge. See

157 Cong. Rec. S1376 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl) (if an inter partes review is instituted

while litigation is pending, that review will completely

substitute for at least the patentand-printed publications portion of the civil litigation). The Appellants’

success in the IPR proceeding led to the determination

that Appellants were the prevailing party in this

litigation. Dragon Intell. Prop., LLC v. DISH Network

LLC, 956 F.3d 1358, 1361–62 (Fed. Cir. 2020).

The majority expresses concern that a district court

is not situated to make an exceptional case finding

based on the proceedings in the IPR over which it did

not preside. That, however, is not the situation at hand.

The Appellants do not seek an exceptional case finding

based on the outcome of the IPR.

The district court found this case exceptional based

on a determination that it was objectively baseless

from its inception. Appellants seek the fees they

expended in the IPR, in which they prevailed, as

compensation for their defense of this baseless

litigation. The incurrence of these fees is not wholly

unrelated to the bases for exceptionality. Appellants

incurred fees in the IPR that they would not have

17a

incurred but for being sued by Dragon in a case that

should not have been initiated by Dragon. To categorically preclude recovery of IPR fees in this circumstance is

inconsistent with § 285 or the intent of IPR itself.

In a case such as this, where exceptionality is based

on a determination that the case was objectively

baseless from its inception, it should be within the

discretion of the district judge to award all reasonable

fees incurred by the prevailing defendant, including

fees incurred in an IPR that resolved any invalidity

defenses that were required to be asserted in response

to the baseless complaint.

Accordingly, I respectfully dissent-in-part from this

portion of the majority opinion, and this court should

reverse the district court’s decision denying Appellants’

request for fees incurred in IPR.

18a

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

————

Civil Action No. 13-2066-RGA

————

DRAGON INTELLECTUAL PROPERTY, LLC,

Plaintiff,

DISH NETWORK L.L.C.,

Defendant.

————

Civil Action No. 13-2067-RGA

————

DRAGON INTELLECTUAL PROPERTY, LLC,

Plaintiff,

SIRIUS XM RADIO INC,

Defendant.

————

ORDER

For the reasons stated in the accompanying Memorandum, the Report & Recommendation (D.I. 218) is

ADOPTED. As a result, I GRANT-IN-PART and

DENY-IN-PART Defendants' Motions to Declare This

Case Exceptional Pursuant to 35 U.S.C. § 285. (Case

No. 13-2066, D.I. 130; Case No. 13-2067, D.I. 139).

Specifically, I DENY the motions to the extent that

19a

Defendants seek (1) attorneys' fees incurred solely

during inter partes review proceedings and (2) fees

from Plaintiff's former attorneys. The parties are directed

to meet and confer and attempt to reach agreement on

the appropriate amount of Defendants’ attorneys fees,

consistent with this Order and the accompanying

Memorandum. In the absence of such agreement,

Defendants should submit a fully-supported request

for the appropriate amount of fees no later than

November 24, 2021.

Entered this 8 day of November, 2021.

/s/ Richard G. Andrews

United States District Judge

20a

APPENDIX C

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

————

Civil Action No. 13-2066-RGA

————

DRAGON INTELLECTUAL PROPERTY, LLC,

Plaintiff,

DISH NETWORK L.L.C.,

Defendant.

————

Civil Action No. 13-2067-RGA

————

DRAGON INTELLECTUAL PROPERTY, LLC,

Plaintiff,

SIRIUS XM RADIO INC,

Defendant.

————

MEMORANDUM

Before me is the Report & Recommendation of a

United States Magistrate Judge. (D.I. 218). It addresses

Defendants DISH Network’s and Sirius XM Radio’s

Motions to Declare This Case Exceptional Pursuant to

35 U.S.C. § 285. (Case No. 13-2066, D.I. 130; Case No.

21a

13-2067, D.I. 139). The Magistrate Judge recommended

that I GRANT-IN-PART and DENY-IN-PART these

motions. (D.I. 218). Specifically, she recommends that

I deny the motions to the extent that Defendants seek

(1) attorneys’ fees incurred solely during inter partes

review proceedings and (2) fees from Plaintiff ’s former

attorneys. (Id.).

Plaintiff Dragon Intellectual Property, LLC (“Dragon”)

has filed objections (D.I. 221),2 to which Defendants

have responded (D.I. 224), and Defendants have filed

objections (D.I. 219), to which Dragon and its former

counsel have responded (D.I. 223, 225). The parties

agree that I review these objections de novo. 28 U.S.C.

§ 636(b)(1)(B); FED. R. Civ. P. 72(b)(3). For the reasons

stated below, these objections are OVERRULED, and

the Report & Recommendation is ADOPTED.

I. BACKGROUND

The Report sets forth the relevant facts (D.I. 218 at

2-9), and I will not repeat them here.

II. LEGAL STANDARD

The Patent Act provides that the court “in exceptional cases may award reasonable attorney fees to the

prevailing party.” 35 U.S.C. § 285. The Supreme Court

has defined an “exceptional” case as “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

Subsequent docket citations will refer to Case No. 13-2066

unless otherwise stated.

Plaintiff’s former counsel Freitas & Weinberg LLP and

partner Robert E. Freitas filed a protective objection to the Report

to the extent it concludes that the case is exceptional and that

attorneys’ fees may be awarded to Defendants. (D.I. 222).

22a

unreasonable manner in which the case was litigated.”

Octane Fitness, LLC v. ICON Health & Fitness, Inc.,

572 U.S. 545, 554 (2014). When considering whether a

case is exceptional, district courts are to exercise their

discretion on a case-by-case basis, considering the

totality of the circumstances. Id. Relevant factors for

consideration include “frivolousness, motivation, objective

unreasonableness (both in the factual and legal

components of the case) and the need in particular

circumstances to advance considerations of compensation and deterrence.” Id. at 554 n.6 (internal quotations

marks omitted). A movant must establish its entitlement to attorneys’ fees under § 285 by a preponderance of

the evidence. Id. at 557.

III. DISCUSSION

A. Plaintiff ’s Objections

Dragon objects to the Magistrate Judge’s finding

that this case is exceptional and to her recommendation to award attorneys’ fees. (D.I. 221). The Magistrate

Judge found that there was a clear disclaimer of

continuous recording devices which precluded a finding

of infringement by Defendants’ accused products, which

are continuous recording devices. (D.I. 218 at 13).

Because Dragon had access to the information

demonstrating non-infringement prior to filing the

suit and was notified of this issue after the complaints

were filed, the Magistrate Judge found that this case

stood out from others with respect to Dragon’s substantive litigating position and was thus exceptional.

(Id.).

Dragon first argues that the Report is inconsistent

with the Munsingwear rule because any award of fees

is a “legal consequence” that the Munsingwear vacatur

was designed to prevent. (D.I. 221 at 1-2). I have

23a

already considered, and rejected, this argument on two

occasions. (See D.I. 168 at 7-8; D.I. 192 at 2-4). A

district court may award attorneys’ fees even where

the underlying decision has been vacated. See B.E.

Tech., L.L.C. v. Facebook, Inc., 940 F.3d 675,679 (Fed.

Cir. 2019) (affirming the district court’s award of costs

under Fed. R. Civ. P. 54(d) even though case was

dismissed as moot following IPR), cert. denied, 141 S.

Ct. 618 (2020). Thus, for the third time, I reject

Dragon’s argument.

Dragon also argues that the Magistrate Judge erred

in relying on this Court’s previous claim construction

ruling in finding that this case is exceptional because

the vacatur created a “clean slate” and “eliminated the

claim construction proceedings.” (D.I. 221 at 2-5). Even

if Dragon was entitled to a “clean slate” to completely

re-do claim construction, this argument is baseless

because the Magistrate Judge did independently

consider whether continuous recording devices, such

as the accused product, were disclaimed from the

asserted patent in making her exceptional case

determination. (See D.I. 218 at 12 n.10 & 13).

Dragon contends that the evidence does not

establish a disclaimer and that the Magistrate Judge

failed to provide a full and detailed explanation for

why Dragon’s litigating position was exceptionally

weak. (D.I. 221 at 8-9). I disagree. As the Magistrate

Judge points out, the applicants made multiple

statements during examination of the asserted patent

which clearly and unmistakably disclaimed continuous

recording devices. (D.I. 218 at 12 n.10). For example, in

order to overcome the examiner’s rejection of claim 1

as obvious over the Sata reference, the applicants

amended the claim from “said record key is first

actuated to initiate storage of the program infor-

24a

mation” to “said record key is first actuated to begin a

recording by initiating storage of the program

information.” (D.I. 212, Ex. B at A0109). The applicants

explained, “Claim 1 has been further amended to

recite how the structure of the instant invention

begins a recording upon a first actuation of the record

key . . . . Accordingly, the instant invention as claimed

is further distinguished from the structure of Sata,

wherein recording . . . is continuous, and never

initiated or stopped . . . .” (Id. at A0100).

The Magistrate Judge correctly concluded that this

was a clear case of prosecution disclaimer.3 Dragon

raises no argument that meaningfully challenges this

conclusion.4 The Magistrate Judge further provided a

sufficiently detailed explanation for why Dragon’s

litigating position was exceptionally weak: “the disclaimer

is very clear; it precludes a finding of infringement by

any of the defendants’ accused products; the information demonstrating non-infringement by the accused

I independently reached the same conclusion in 2015.

(Dragon Intellectual Propery LLC v. AT&T Services Inc., No. 132061, D.I. 110 at 7 (D.Del. Sept. 9, 2015) (“I have only once seen a

clearer case of prosecution disclaimer.”)).

Dragon also argues that Defendants did not provide sufficient

evidence to show that Dragon’s litigating positions were unreasonable because it did not present any expert testimony as to

disclaimer. (D.I. 221 at 6-8). Dragon claims that Defendants were

required to submit expert testimony to satisfy their burden

because disclaimer is evaluated from the perspective of one

skilled in the art. (Id. at 6). I disagree. Expert testimony is

certainly not required for claim construction, which can be (and

usually is) based solely on intrinsic evidence. See Teva Pharms.

USA, Inc. v. Sandoz, Inc., 574 U.S. 318, 331 (2015). The Magistrate

Judge properly found a clear disclaimer in the intrinsic evidence.

Expert testimony was not required to meet Defendants’ burden

of proof.

25a

products was available to Dragon prior to filing the

suit; the defendants also put Dragon on notice of the

issue after the complaints were filed; and Dragon

nevertheless continued to litigate.” (D.I. 218 at 13).

Dragon finally argues that the Magistrate Judge did

not fully consider its argument that Defendants are

estopped from asserting disclaimer. (D.I. 221 at 9-10).

In the IPR, the PTAB invalidated the asserted patent

as obvious based on a combination of Goldwasser and

Yifrach. (Id. at 10). Dragon contends that since these

references both disclose continuous recording devices,

that means continuous recording devices fall within

the scope of the asserted patent. (Id.). Since

Defendants obtained a ruling based on the idea that

continuous recording devices fall within the scope of

the asserted patent, Dragon argues that Defendants

cannot assert a disclaimer of continuous recording

devices. (Id.). I am not sure how Dragon is reaching the

conclusion that the PTAB’s decision necessarily means

that continuous recording devices fall within the scope

of the asserted patent. A prior art reference can

certainly render a claimed invention obvious even if it

discloses extra elements not present in the patent.

See 2 Chisum on Patents § 3.02(1)(f) (2021) (“For

anticipation purposes, as for infringement purposes, it

does not matter that the anticipatory (or infringing)

item contains elements in addition to those specified

in the patent claim in question.”). The PTAB never

found that continuous recording devices fall within the

scope of the asserted patent. See Dish Network L.L.C.

v. Dragon Intell. Prop., LLC, No. IPR2015-00499, 2016

WL 3268756 (P.T.A.B. June 15, 2016).

Further, Defendants never argued to the PTAB that

continuous recording devices are within the scope of

the asserted patent. Instead, they argued to the PTAB

26a

that the asserted patent “cannot involve continuous

background recording.” (D.I. 213, Ex. I at A0881). Thus,

the Magistrate Judge properly rejected Dragon’s

estoppel argument because Defendants did not take

an inconsistent position during the IPR.

I agree with the Magistrate Judge’s conclusion that

this case is exceptional. Thus, I overrule Dragon’s

objections and adopt the Magistrate Judge’s

recommendation that this case is exceptional and

Defendants should be awarded attorneys’ fees under

§ 285.

B. Defendants’ Objections

1. Fees Incurred in IPR Proceedings

Defendants object to the Magistrate Judge’s determination that fees incurred in the IPR proceedings

cannot be recovered under § 285. (D.I. 219 at 3-6). The

Federal Circuit declined to resolve this issue in the

first instance on appeal but remarked: “[W]e see no

basis in the Patent Act for awarding fees under § 285

for work incurred in inter partes review proceedings

that [Defendants] voluntarily undertook.” Dragon Intell.

Prop., LLC v. DISH Network L.L.C., 956 F.3d 1358,

1362 (Fed. Cir. 2020). I understand this statement to

be mere dicta, but I nevertheless agree with it.

Section 285, which appears in the chapter of Title 35

concerning remedies for patent infringement, states:

“The court in exceptional cases may award reasonable

attorney fees to the prevailing party.” 35 U.S.C. § 285.

As the Magistrate Judge points out, the text of § 285

does not contain any specific language permitting the

district court to award fees incurred in an IPR.5

There are no fee-shifting provisions in Chapter 31 of Title

35—which specifically relates to IPR proceedings. The absence of

27a

The Magistrate Judge stated, “IPR proceedings are

not ‘cases’ under § 285. (D.I. 218 at 14 (citing Amneal

Pharms. LLC v. Almirall, LLC, 960 F.3d 1368, 1371-72

(Fed. Cir. 2020)). Defendants argue that the Magistrate

Judge mistakenly relied on Amneal because it “was not

so broad and is distinguishable.” (D.I. 219 at 3). In

Amneal, the Federal Circuit denied the patent owner’s

request for fees under § 285 for work done opposing an

IPR because “section 285 does not authorize this court

to award fees for work that was done before the agency

on appeal from an IPR.” Amneal, 960 F.3d at 1371.

Defendants argue that Amneal is distinguishable

because the IPR in Amneal was brought before any

district court suit was filed and in the present case, the

IPR was filed after Defendants were sued in district

court. (D.I. 219 at 3). While this distinction is true, it

does not change the Magistrate Judge’s conclusion

that IPR proceedings are not “cases” under § 285. In

Amneal, the Federal Circuit noted that § 285 “speaks

only to awarding fees that were incurred during, in

close relation to, or as a direct result of, judicial

proceedings.” Amneal, 960 F.3d at 1371; see also id.

(“The words ‘case’ and ‘cause’ are constantly used as

synonyms in statutes and judicial decisions, each

meaning a proceeding in court, a suit, or action.”

(quoting Blyew v. United States, 80 U.S. (13 Wall.) 581,

595 (1872))).

a fee-shifting provision in this chapter shows a lack of congressional intent to permit the award of attorneys’ fees in IPR

proceedings. See Nantkwest, Inc. v. Iancu, 898 F.3d 1177, 1184

(Fed. Cir. 2018) (en banc) (“[T]he American Rule provides that each

litigant bears its own attorneys’ fees, win or lose, and a statute

must use ‘specific and explicit’ language to depart from this rule.”),

aff’d sub nom. Peter v. Nantkwest, Inc., 140 S. Ct. 365 (2019).

28a

Defendants further argue that the Magistrate Judge

erred by “deviating from Therasense’s `holistic approach’

and not considering the IPR as part of the “case” under

§ 285. (D.I. 219 at 5). In Therasense, the Federal Circuit

explained, “[A] case should be viewed more as an

`inclusive whole’ rather than as a piecemeal process

when analyzing fee-shifting under § 285.” Therasense,

Inc. v. Becton, Dickinson & Co., 745 F.3d 513, 516 (Fed.

Cir. 2014). The Federal Circuit later clarified this

quote, “[I]n Therasense, while we explained that ‘case’

under section 285 should be more viewed as an

inclusive whole, we were clearly only referring to

district court and appellate court proceedings.”

Amneal, 960 F.3d at 1372 (citing Therasense, 745 F.3d

at 516). Thus, I do not agree with Defendants’

objection. The Magistrate Judge was not required to

view the IPR as part of the “case” under § 285.

Defendants also argue that the Magistrate Judge

failed to follow PPG Indus., Inc. v. Celanese Polymer

Specialties Co., 840 F.2d 1565 (Fed. Cir. 1988). (D.I. 219

at 5). In PPG, the Federal Circuit held that a defendant

could recover the fees it incurred opposing the patentee’s

PTO reissue proceedings where the defendant’s “participation in [the] reissue application proceedings was

not optional.” PPG, 840 F.2d at 1568. The Magistrate

Judge found that PPG was not applicable because, as

Defendants have acknowledged, the IPR proceedings

in the present case were optional. (D.I. 218 at 15). This

distinction is proper.

In their objections, Defendants argue the IPR they

initiated was not optional because Dragon’s complaint

“triggered the one-year statutory bar for Defendants

to file an IPR petition under 35 U.S.C. § 315(b).” (D.I.

219 at 6). This argument was not raised before the

Magistrate Judge and is therefore untimely. Regardless, I

29a

am not persuaded that this statutory deadline makes

the filing of IPR mandatory, especially considering

Defendants’ statements at oral argument that they

filed the IPR because they “thought that it was the

most cost-effective way to resolve the case,” not

because they had no other option. (D.I. 217 at 34:5-14).

It was Defendants’ choice to pursue invalidity in the

IPR proceedings rather than in this Court. Nothing

required them to do that.

There is no persuasive legal analysis that would

authorize this Court to award attorneys’ fees under §

285 for IPR proceedings that Defendants voluntarily

undertook. Thus, I overrule Defendants’ objection to

this portion of the Magistrate Judge’s Report and

adopt her recommendation not to award fees incurred

solely during the IPR proceedings.

2. Fee Liability Against Dragon’s Counsel

Defendants object to the Magistrate Judge’s recommendation that I decline to find Dragon’s former

counsel jointly and severally liable for any fee award.

(D.I. 219 at 7-10). Defendants contend that the

Magistrate Judge “overlooked” the Supreme Court’s

Octane Fitness opinion, in which the Court found that

§ 285 imposed “one and only one constraint on district

courts’ discretion to award attorney’s fees in patent

litigation: The power is reserved for ‘exceptional’

cases.” (Id. at 7 (quoting Octane Fitness, LLC v. ICON

Health & Fitness, Inc., 572 U.S. 545, 553 (2014))).

Defendants argue that the Magistrate Judge’s Report

contravenes Octane Fitness by improperly “injecting

another constraint” on the district court’s discretioni.e., by only allowing recovery of fees from the parties,

not attorneys. (Id.). I disagree. As the Magistrate

Judge pointed out, Octane Fitness addressed the

question of when fees may be awarded, not from whom

30a

they may be recovered. (D.I. 218 at 18). I see nothing

in Octane Fitness that authorizes attorney liability for

a fee award.

Instead, federal courts generally presume that

“when a fee-shifting statute does not explicitly permit

a fee award against counsel, it prohibits it. In short,

silence does not equal consent.” In re Crescent City

Estates, LLC, 588 F.3d 822, 825 (4th Cir. 2009). Section

285 does not explicitly permit a fee award against

counsel. In the absence of such explicit permission, the

Magistrate Judge properly decided that there was no

basis to impose fee liability against the attorneys.6

Defendants argue that the Magistrate Judge improperly relied on cases declining to impose fee liability

against attorneys under other fee-shifting statutes.

The Magistrate Judge found, and Defendants agree, that

nothing in the legislative history of § 285 supports awarding fees

against opposing counsel. (D.I. 218 at 19 n.18; see also D.I. 217 at

26:5-11). She instead found that since the fee-shifting provision

was included in the same section enumerating the remedies in

patent infringement cases, and when remedies are awarded in

patent infringement cases, it is the party (not its attorney) that

must pay damages or stop its infringing activities, “Congress

intended the losing party (and not its attorney) to pay attorney’s

fees.” (Id.). Defendants claim that, in reaching this conclusion, the

Magistrate Judge “reads too much from too little.” (D.I. 219 at 9).

I disagree. Section 285 and its predecessor’s placement was

supportive of the Magistrate Judge’s finding that there was no

congressional intent to overcome the presumption and to permit

a fee award against a party’s counsel.

Defendants also argue that since § 285 and its legislative

history say nothing about limiting the fee recovery to opposing

parties, it permits recovery of fees against attorneys. This

argument directly contradicts the presumption that if a feeshifting statute is silent as to who pays the fee award, then the

statute does not permit a fee award against a party’s attorneys.

31a

(D.I. 219 at 8-9). I agree with the Magistrate Judge

that these cases are instructive because, like § 285, the

fee-shifting statutes in these cases are silent as to who

pays the fee award and thus, the presumption applies.

See, e.g., Peer v. Liberty Life Assurance Co. of Bos., 992

F.3d 1258, 1263-65 (11th Cir. 2021); Tejero v. Portfolio

Recovery Assocs., L.L.C., 955 F.3d 453, 461-62 (5th Cir.

2020).

What Defendants fail to mention in their objections

is that the Magistrate Judge cited multiple cases that

declined to assess fees against a party’s counsel under

§ 285. (D.I. 218 at 18). The Federal Circuit held in two

non-precedential opinions that § 285 does not permit

a fee award against counsel. Phonometrics, Inc. v. ITT

Sheraton Corp., 64 F. App’x 219, 222 (Fed. Cir. 2003)

(“Counsel . . . is not liable for fees awarded under § 285;

it can only be liable for excess fees awarded under

§ 1927.”); Interlink Elecs. v. Incontrol Sols., Inc., 1999

WL 641230, at *3 (Fed. Cir. Aug. 24, 1999) (per curiam)

(“[S]ection 285 imposes costs on a party, not an attorney.”).

Defendants’ only rebuttal to these cases is that they

were decided before Octane. (See D.I. 219 at 7 n.10). I

do not think the holding in Octane would change the

Federal Circuit’s conclusion because Octane does not

even address against whom fees can be assessed.

Many post-Octane district court cases have also

reached the same conclusion. See, e.g., My Health, Inc.

v. ALR Techs., Inc., 2019 WL 2395409, at *3 (E.D. Tex.

June 5, 2019) (“Defendants provide no legal basis for a

fee award against [opposing party’s] counsel under

§ 285. Indeed, the Federal Circuit has declined to find

counsel liable for fees awarded under § 285.”), adopted,

2020 WL 122933 (E.D. Tex. Jan. 10, 2020); Advanced

Video Techs. LLC v. HTC Corp., 2015 WL 7621483, at

*5 (S.D.N.Y. Aug. 28, 2015) (“Unlike other types of

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sanctions, sanctions under § 285 may not be assessed

against counsel—only against a party.”). Defendants

have provided no response to the Magistrate Judge’s

reliance on these cases.7

Thus, I adopt the Magistrate Judge’s recommendation and deny Defendants’ requests to the extent that

they seek to hold Dragon’s former counsel jointly and

severally liable for the fee award.

IV. CONCLUSION

An appropriate order will issue.

Entered this 5 day of November, 2021.

/s/ Richard G. Andrews

United States District Judge

Defendants’ remaining objections simply restate the arguments it made to the Magistrate Judge. The Magistrate Judge

properly considered and rejected these arguments, and I decline

to rehash them here.

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APPENDIX D

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE

————

C.A. No. 13-2066-RGA

————

DRAGON INTELLECTUAL PROPERTY, LLC,

Plaintiff,

DISH NETWORK L.L.C.,

Defendant.

————

C.A. No. 13-2067-RGA

————

DRAGON INTELLECTUAL PROPERTY, LLC,

Plaintiff,

SIRIUS XM RADIO INC.,

Defendant.

————

REPORT AND RECOMMENDATION

Pending before the Court are two Motions to Declare

Case Exceptional Pursuant to 35 U.S.C. § 285 filed by

Defendants Dish Network L.L.C. (“Dish”) and Sirius

XM Radio Inc. (“SXM”) in these two related patent

infringement cases. (C.A. No. 13-2066-RGA, D.I. 130;

34a

C.A. No. 13-2067-RGA, D.I. 139.)1 I agree with the

defendants that these cases are exceptional, so I

recommend that the Court grant the pending motions

in part. However, I recommend that the Court deny the

motions (1) to the extent that the defendants seek

attorney’s fees incurred solely during inter partes

review proceedings and (2) to the extent that the

defendants seek fees not from Dragon, but from its

former lead counsel.

I. BACKGROUND

These cases have a long and complicated history,

despite never making it to the summary judgment

stage. In 2013, Plaintiff Dragon Intellectual Property,

LLC (“Dragon”) separately sued Dish, SXM, and eight

other defendants.2 Each complaint alleged that the

named defendant directly infringed claims 1, 2, 3, 4, 7,

and 8 of U.S. Patent No. 5,930,444 (the “’444 patent”).

Of those claims, only claim 1 is independent. It provides as follows:

1. A recording and playback apparatus

for the substantially immediate and seamless

resumption of interrupted perception of

[broadcast]3 program information based upon

Subsequent docket citations will refer to C.A. No. 13-2066RGA unless otherwise noted.

(See C.A. No. 13-2058-RGA, D.I. 1; C.A. No. 13-2061-RGA, D.I.

1; C.A. No. 13-2062-RGA, D.I. 1; C.A. No. 13-2063-RGA, D.I. 1; C.A.

No. 13-2064-RGA, D.I. 1; C.A. No. 13-2065-RGA, D.I. 1; C.A. No.

13-2066-RGA, D.I. 1; C.A. No. 13-2067-RGA, D.I. 1; C.A. No. 132068-RGA, D.I. 1; C.A. No. 13-2069-RGA, D.I. 1.)

“A Certificate of Correction was issued March 5, 2013,

replacing ‘perception of program information’ with ‘perception of

broadcast program information.’” Dish Network L.L.C. v. Dragon

Intell. Prop., LLC, No. IPR2015-00499, 2016 WL 3268756, at *2

n.6 (P.T.A.B. June 15, 2016).

35a

audio or video signals, or both, without

missing the program information presented

during the interruption, comprising:

means for powering the apparatus;

a keyboard having a record key and a

playback key;

a control circuit coupled responsively to

said keyboard;

a memory unit coupled responsively to said

control circuit, said memory unit having

a medium for storage of information,

said storage medium having structure

which enables substantially random

access to information stored in said

medium for retrieval of the stored

information from said storage medium;

at least one input, said input being connected

to a user’s audio/video program signal

source and also being coupled to said

memory unit so as to enable program

information presented by the signal

source to be transferred to and stored

in said memory unit; and

at least one output, said output being

connected to a user’s audio or video

display device or both, said output further

being connected to said memory unit so

as to enable the transfer of program

information from said memory unit to

the user’s display device, said control

circuit being configured so that substantially simultaneous recording and

playback of program information is

36a

achieved when said record key is first

actuated to begin a recording by initiating storage of the broadcast program

information in said memory unit, and

said playback key is subsequently and

solely actuated to begin time delay

playback of the recording from the

beginning thereof by initiating retrieval

of the stored program information in

said memory unit, with the interval of

the time delay being the same as the

time elapsed between the actuation of

said record key and the subsequent

actuation of said playback key.

’444 patent, claim 1 (emphasis added).

Dragon served its initial infringement contentions

in August 2014. (D.I. 200, Ex. 2; D.I. 201, Ex. 2.)

Subsequently, Dish and SXM sent separate letters to

Dragon’s counsel asserting that their products could

not infringe. (D.I. 200, Ex. 5 (letter from Dish’s counsel

to Mr. Angell of Freitas Angell & Weinberg LLP, dated

October 24, 2014); D.I. 202, Ex. 14 (letter from SXM’s

counsel to Mr. Freitas and Mr. Angell at Freitas Angell

& Weinberg LLP, dated December 15, 2014).) The

letters pointed out that, according to publicly available

user manuals, the accused products continuously

record from the time viewing or listening begins. (D.I.

200, Ex. 5 at 4–5; D.I. 202, Ex. 14 at 2.) Devices that

continuously record could not infringe, according to

the defendants, because the claim language required

that a recording be initiated when the record key was

pressed. (D.I. 200, Ex. 5 at 3–4; D.I. 202, Ex. 14 at 2.)

The defendants also pointed out that, during prosecution of the ’444 patent, the applicants had disclaimed

coverage of “continuous recording devices.” (D.I. 200,

37a

Ex. 5 at 2–3; D.I. 202, Ex. 14 at 3–4.) The defendants’

letters each demanded that Dragon dismiss its claims,

and the defendants threatened to seek sanctions and

attorney’s fees if Dragon failed to do so. (D.I. 200, Ex.

5 at 1, 6; D.I. 202, Ex. 14 at 1.)

Dragon did not dismiss its claims. Instead, it

amended its infringement contentions. (See, e.g., D.I.

200, Ex. 7 (Dragon’s Further Initial Infringement

Contentions, served November 7, 2014).) The amended

contentions, among other things, set forth Dragon’s

theory as to how devices that continuously record

could infringe. (See, e.g., id. at 17.)

In late 2014, Dish filed a petition for inter partes

review of the ’444 patent and, along with the other

defendants, moved to stay all ten cases. (D.I. 74.) The

Court granted the motion only as to Dish and entered

a stay of Dish’s case. (D.I. 86.) Subsequently, Dragon

and SXM stipulated to stay SXM’s case conditioned

upon SXM joining Dish’s IPR. (C.A. No. 13-2067-RGA,

D.I. 101, 102.) The PTAB instituted review on July 17,

2015 and subsequently granted SXM’s request for joinder.

While the IPR was pending, this Court held a claim

construction hearing in the eight non-stayed cases.4

The parties requested construction of ten claim terms,

including “broadcast program information” and “the

broadcast program information.” (D.I. 78.) Dragon

argued that “the broadcast program information” is a

particular portion of “broadcast portion information”

presented after the user presses the record key and

Pursuant to the Court’s scheduling orders, the claim construction proceedings were coordinated. Though Dish’s and

SXM’s cases had been stayed prior to the hearing, Dish and SXM

participated in the preparation of the Joint Claim Construction

Brief that was filed in all ten cases. (See D.I. 78.)

38a

before the user presses the playback key—the result of

Dragon’s proposed construction being that the claim

could cover devices that record content before the

record key is pressed (i.e., devices that continuously

record content). (C.A. No. 13-2058-RGA, D.I. 101 at 4–

7.) In a Memorandum Opinion dated September 19,

2015, Judge Andrews rejected Dragon’s proposed

constructions, holding that the inventors disclaimed

continuous recording devices during prosecution:

In this case, the applicants clearly and

unequivocally disclaimed continuous recording

devices. I have only once seen a clearer case of

prosecution disclaimer. The Patent and

Trademark Office rejected the patent six

times based on U.S. Patent No. 5,134,499

(“Sata”). ([C.A. 13-2058] D.I. 94 at 27). Sata

teaches a recording device that “continuously

records the video data concerning the

television program of the channel tuned by

the television tuner 1.” (ʼ499 patent, col. 6, 11.

47-49). The applicants repeatedly distinguished Sata on the basis that Sata records

continuously, and the claimed device does not

begin recording until the user actuates the

record key. (D.I. 78 at pp. 7-8, 52-54, 58, 77).

The applicants amended the claim from

“said record key is first actuated to initiate

storage of the program information” to “said

record key is first actuated to begin a

recording by initiating storage of the program

information.” (C.A. 13-2062 D.I. 79-3 at p.

292). The applicants explained the amendment: “Claim 1 has been further amended to

recite how the structure of the instant

invention begins a recording upon a first

39a

actuation of the record key . . . . Accordingly,

the instant invention as claimed is further

distinguished from the structure of Sata,

wherein recording . . . is continuous, and

never initiated or stopped . . . .” (Id. at p. 294).

The prosecution history is replete with such

disclaimers. (See, e.g., id. at pp. 296-97; C.A.

13-2062 D.I. 79 at p. 243; C.A. 13-2062 D.I. 792 at pp. 248, 271). Plaintiff cannot now use

claim construction to recapture continuous

recording devices.

(C.A. No. 13-2058-RGA, D.I. 101 at 7.) Judge Andrews

relied on the same disclaimer in rejecting Dragon’s

proposed constructions of two other terms: “record key”

and “to begin a recording by initiating storage of the

broadcast program information in said memory unit.”

(Id. at 12 (“As discussed above, the applicants disclaimed continuous recording devices during prosecution.

Defendants’ construction clarifies that continuous

recording devices are not within the scope of the claim.”).)

In October 2015, Dragon’s lead attorneys, Freitas

Angell & Weinberg LLP (“FAW”) moved to withdraw

as counsel in all ten cases. The Court granted FAW’s

request in November 2015.

In April 2016, Dragon, Dish, SXM, and the other

eight defendants stipulated to non-infringement based

on the Court’s claim constructions. (See, e.g., D.I. 115.)

Among other things, the parties agreed that “the

Accused Products do not include a ‘record key,’ as

construed by the Court,” because “pressing a record

key is not required to begin the recording process.” (Id.

¶ 10.) They also agreed that “the Accused Products do

not function ‘to begin a recording by initiating storage

of the broadcast program information in said memory

unit,’ as construed by the Court,” because “the

40a

information that is stored after the PAUSE or

PAUSE/PLAY key is actuated is, in the Accused

Products, information that would have been stored

whether or not the PAUSE or PAUSE/PLAY key is

actuated.” (Id. ¶ 11.) The Court ordered the stipulations and, in April 2016, entered judgments for the

defendants in all ten cases. (See, e.g., D.I. 116, 117.)

The Court’s final judgments marked the beginning

of the next stage of these cases: the parties’ protracted

litigation over fees and sanctions. In the first round of

motions, the defendants in seven of the ten cases (but

not Dish or SXM) filed motions for sanctions under

Federal Rule of Civil Procedure 11.5 The moving

defendants alleged that Dragon and its counsel should

be sanctioned because of their “failure to recognize

|an obvious prosecution history disclaimer” that was

“fatal to Plaintiff ’s infringement theory.” (See, e.g., C.A.

No. 13-2061-RGA, D.I. 179 at 8.) While Judge Andrews

ultimately denied the motions as untimely, his Memorandum Order recalled his conclusion “that Plaintiff ’s

proposed constructions — with respect to ‘broadcast

program information,’ ‘record key,’ and ‘to begin a

recording by initiating storage of the broadcast

program information in said memory unit’ — sought

to reclaim subject matter disclaimed during prosecution” and that he had “only once seen a clearer case of

prosecution disclaimer.” (Id. at 4, 8 (entered July 12,

2016).)

On to the next round: the parties in nine of these ten

cases (including Dish and SXM) filed motions for

(See C.A. No. 13-2061-RGA, D.I. 123; C.A. No. 13-2062-RGA,

D.I. 133; C.A. No. 13-2063-RGA, D.I. 132; C.A. No. 13-2064-RGA,

D.I. 125; C.A. No. 13-2065-RGA, D.I. 139; C.A. No. 13-2068-RGA,

D.I. 135; C.A. No. 13-2069-RGA, D.I. 132.)

41a

attorney’s fees. Seven of those motions, including

those filed by Dish and SXM, sought fees under both

35 U.S.C. § 285 and 28 U.S.C. § 1927.7

Meanwhile, in June 2016, the PTAB issued a final

written decision in the IPR, holding that the asserted

claims were unpatentable. The PTAB construed the

claims to give them “their broadest reasonable construction in light of the specification,” which was the

applicable standard for IPR petitions filed prior to

November 13, 2018. Dish Network L.L.C., 2016 WL

3268756, at *3. The PTAB found that some claims

(including claim 1) were obvious over a combination of

U.S. Patent Nos. 5,241,428 (“Goldwasser”) and 5,126,982

(“Yifrach”), and that others were obvious over a

combination of Goldwasser, Yifrach, and PCT Pub. WO

90/15507 (“Vogel”). Id. at *9 & n.2–4.

Dragon appealed the PTAB’s obviousness decision to

the Federal Circuit and separately appealed this Court’s

final judgments of non-infringement. On November 1,

2017, the Federal Circuit affirmed the PTAB’s finding

that the claims at issue were unpatentable as obvious.

Dragon Intell. Prop., LLC v. Dish Network LLC, 711 F.

App’x 993, 994 (Fed. Cir. 2017). The same day, the

(See C.A. No. 13-2061-RGA, D.I. 183; C.A. No. 13-2062-RGA,

D.I. 203; C.A. No. 13-2063-RGA, D.I. 202; C.A. No. 13-2064-RGA,

D.I. 195; C.A. No. 13-2065-RGA, D.I. 196; C.A. No. 13-2066-RGA,

D.I. 130; C.A. No. 13-2067-RGA, D.I. 133; C.A. No. 13-2068-RGA,

D.I. 205; C.A. No. 13-2069-RGA, D.I. 195.)

(See D.I. 130 (Dish’s motion seeking fees under §§ 285 and

1927); C.A. No. 13-2067-RGA, D.I. 133 (SXM’s motion seeking fees

under §§ 285 and 1927); C.A. No. 13-2062-RGA, D.I. 203 (filed in

five cases and seeking fees under §§ 285 and 1927).) Two of the

defendants sought fees under only § 285. (See, e.g., C.A. No. 132061-RGA, D.I. 183 (filed in two cases and seeking fees under

§ 285 only).)

42a

Federal Circuit dismissed Dragon’s appeal of the final

judgments entered by this Court as moot. Dragon

Intell. Prop., LLC v. Apple Inc., 700 F. App’x 1005, 1006

(Fed. Cir. 2017). At the time the Federal Circuit issued

its rulings, the fee motions were still pending before

Judge Andrews.

Dragon then moved this Court to vacate the

judgments of non-infringement in all ten cases under

Federal Rule of Civil Procedure 60(b) and to dismiss

the cases as moot. (D.I. 159.) On September 27, 2018,

Judge Andrews vacated the judgments of non-infringement, but he held that he could retain jurisdiction to

resolve the defendants’ fee motions. (D.I. 168 at 6–8.)

On November 7, 2018, Judge Andrews denied Dish’s

and SXM’s motions for attorney’s fees. He reasoned

that the defendants were not “prevailing parties” within

the meaning of 35 U.S.C. § 285 because the Court had

vacated its previous judgments of non-infringement.

(D.I. 170 at 2.) Judge Andrews also denied the

defendants’ requests for fees under 28 U.S.C. § 1927

because they failed to establish that Dragon “multiplie[d]

the [district court] proceedings . . . unreasonably and

vexatiously.” (Id. at 2, 4.) Regarding § 1927, Judge

Andrews noted that, “although Defendants identify

behavior that [he] might properly have sanctioned

under Section 285 [if the defendants were prevailing

parties], the allegations do not meet the standard for

a Section 1927 fees award.” (Id. at 4.)

Dish and SXM appealed this Court’s denial of their

requests for fees under 35 U.S.C. § 285. On appeal, the

Federal Circuit “h[e]ld that DISH and SXM are

prevailing parties” within the meaning of § 285.

Dragon Intell. Prop., LLC v. Dish Network LLC, 956

F.3d 1358, 1362 (Fed. Cir. 2020). It remanded back to

43a

this Court “for initial consideration of [Dish’s and

SXM’s] fee motions.” Id.

The Federal Circuit did not consider whether these

cases were “exceptional” within the meaning of § 285.

Id. Nor did it resolve the defendants’ arguments

(1) that any fee award should include fees incurred by

the defendants in the IPR or (2) that fees should be

awarded against counsel of record as jointly and

severally liable with a party. Id. Although the Federal

Circuit expressly declined to rule on either argument

“in the first instance,” the panel remarked that “we see

no basis in the Patent Act for awarding fees under

§ 285 for work incurred in inter partes review

proceedings that [Dish and SXM] voluntarily undertook.”

Id.

Dish’s and SXM’s fee motions—originally filed in

2016—are now back before this Court on remand.

After ordering fresh briefing, Judge Andrews referred

the motions to me for a Report and Recommendation.

(D.I. 195.) I heard oral argument on June 28, 2021.

(“Tr. __.”)

II. LEGAL STANDARD

Section 285 of Title 35 provides that “[t]he court in

exceptional cases may award reasonable attorney fees

to the prevailing party.” 35 U.S.C. § 285. The Supreme

Court has defined an “exceptional” case as “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). Whether a case is exceptional

is left to the discretion of the district court, which

should make a case-by-case determination based on

44a

the totality of the circumstances. Id. One of the factors

to consider in deciding whether a case is exceptional is

“objective unreasonableness (both in the factual and

legal components of the case).” Id. at 554 n.6; see also

Vehicle Operation Techs. LLC v. Ford Motor Co., No. 13539-RGA, 2015 WL 4036171, at *3 (D. Del. July 1,

2015).

III. DISCUSSION

Dish and SXM seek fees under § 285 from Dragon

and its original counsel in this infringement action,

the FAW law firm and named partner Robert Freitas.

I will begin by listing the issues that I am not

resolving. First, I do not need to determine whether

Dish and SXM are prevailing parties. The Federal

Circuit has already held that they are.8 Dragon Intell.

Prop., LLC, 956 F.3d at 1361–62. Second, I am not

going to revisit Judge Andrews’s claim construction

rulings or his conclusion that the inventors of the ʼ444

patent disclaimed coverage of continuous recording

devices. Although Judge Andrews’s claim construction

order and opinion were not entered in the Dish and

SXM cases (because they were stayed at the time),

Dish and SXM participated in the joint briefing and

Dragon had a full and fair chance to present its

arguments against the disclaimer to Judge Andrews.

Moreover, Dragon has already stipulated to noninfringement by Dish and SXM based on those same

constructions.9 (D.I. 115 ¶¶ 9–13.) Third, for the same

The Federal Circuit arrived at that conclusion notwithstanding that it appears from the docket that no judgments have been

entered (because Judge Andrews vacated them) and the infringement claims have not been dismissed.

Dragon and FAW argue that, when Judge Andrews vacated

the judgments, he also necessarily “vacated . . . the claim

45a

reason, I do not need to decide whether Dish and SXM

infringe the ʼ444 patent under Judge Andrews’s claim

construction rulings.

I also note that any decision of this Court that

awards fees will provide an opportunity for Dragon

and FAW to seek appellate review. Cf. Thermolife Int’l

LLC v. GNC Corp., 922 F.3d 1347, 1356–57 (Fed. Cir.

2019) (affirming district court’s award of fees against

plaintiff based on its “ill-supported” infringement position

even though infringement had not been adjudicated

before the asserted claims were invalidated).

There are three issues that I must resolve with this

Report and Recommendation. First, I must determine

whether the cases are exceptional because they stand

out from others with respect to the substantive

strength of Dragon’s litigating position. Second, I must

determine whether Dish and SXM may recover attorney’s

fees that they incurred during IPR proceedings that

they voluntarily undertook. Third, I must determine

whether § 285 permits the Court to assess fees against

a losing party’s attorneys.

A. These cases are exceptional under 35 U.S.C.

§ 285.

I agree with Judge Andrews’s observation that this

is a very clear case of prosecution disclaimer. In light

construction order.” (D.I. 207 at 12.) That is so, they say, because

“[w]hen a judgment is vacated, everything that came before is

also eliminated.” (Id. at 13; see also D.I. 206 at 26.) They say it

would be unfair to award fees based on Judge Andrews’s claim

construction rulings because those rulings are “unreviewable” as

a result of the infringement cases now being moot. (D.I. 206 at

27.) Regardless of what I think of that argument, Judge Andrews

has already rejected permutations of it on two occasions. (See D.I.

192 at 3–4; D.I. 168 at 8.)

46a

of that disclaimer, and in view of the totality of the

other circumstances, these cases stand out from others

with respect to the substantive strength of Dragon’s

infringement position.

As an initial matter, Dragon does not dispute that

Dish’s and SXM’s accused products are continuous

recording devices. Indeed, Dish stipulated that the

Dish and SXM accused products did not infringe under

the Court’s claim construction because they were

continuous recording devices. Nor does Dragon dispute

that, at all relevant times, it was on notice that the

accused products were continuous recording devices.

(D.I. 206 at 11.) Dish and SXM point out (and Dragon

does not dispute) that, prior to Dragon filing suit, it

was readily apparent from publicly available user

manuals and casual operation of the accused devices

that they operated by continuous recording. Moreover,

after Dragon filed suit and served its infringement

contentions, Dish and SXM sent separate letters to

Dragon’s counsel explaining that their products were

continuous recording devices and could not infringe

due to a prosecution disclaimer. Dragon nevertheless

continued to press its infringement claims.

Dragon does dispute the legal question of whether

there was a prosecution disclaimer, but Judge Andrews

has already held that there was.10 Judge Andrews also

Having reviewed the prosecution history, I agree with Judge

Andrews. To overcome the examiner’s rejection of claim 1 as

obvious over the Sata reference, the applicants amended the

claim to specify that the claimed apparatus “begin[s] a recording

by initiating storage” when the record key is actuated. (See, e.g.,

D.I. 212, Ex. B at A0109.) The applicants explained that

Claim 1 has been further amended to recite how the

structure of the instant invention begins a recording

upon a first actuation of the record key . . . . Accordingly,

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the instant invention as claimed is further distinguished

from the structure of Sata, wherein recording . . . is

continuous, and never initiated or stopped[.]

(Id. at A0100.) In short, the applicants distinguished the claim

from Sata because Sata disclosed a device that records continuously. That is a clear and unambiguous disclaimer of continuous

recording devices.

Consistent with their view that they are entitled to a do-over

on a clean slate, Dragon and FAW each devote significant portions

of their fee briefs to rearguing claim construction. They contend

that their positions on claim construction and prosecution

disclaimer are either correct, or that they are at least not so

wrong as to be unreasonable. (D.I. 206 at 11–26; D.I. 207 at 14–

31.) Because I have reviewed the prosecution history and agree

with Judge Andrews regarding the disclaimer, and because I

think that these cases stand out from others with respect to the

substantive strength of Dragon’s litigating position, I render no

opinion about FAW’s argument that Judge Andrews must

entertain Dragon’s and FAW’s most recent claim construction

arguments, some of which are new. (See Tr. 55:9–57:21.) But I do

note that Dragon and FAW are incorrect to the extent they

contend that the Court cannot base an exceptional case finding

on an issue that has not been litigated to judgment. See

Thermolife Int’l, 922 F.3d at 1356–57.

Dragon’s fee motion briefing points out that there are differences between Sata and the claimed invention besides continuous

recording. Putting aside the fact that Dragon failed to raise many

of its points to Judge Andrews in the claim construction briefing

(where one might have expected Dragon to put forth its strongest

arguments), the fact that there are other distinctions between the

claimed invention and Sata does not preclude a finding of

disclaimer. “[A] disavowal, if clear and unambiguous, can lie in a

single distinction among many.” Comput. Docking Station Corp. v.

Dell, Inc., 519 F.3d 1366, 1377 (Fed. Cir. 2008); see also Andersen

Corp. v. Fiber Composites, LLC, 474 F.3d 1361, 1374 (Fed. Cir.

2007) (“[A]n applicant’s argument that a prior art reference is

distinguishable on a particular ground can serve as a disclaimer

of claim scope even if the applicant distinguishes the reference on

other grounds as well.”); Norian Corp. v. Stryker Corp., 432 F.3d

1356, 1362 (Fed. Cir. 2005) (“[W]e have not allowed [patentees] to

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remarked that he has “only once seen a clearer case of

prosecution disclaimer.” (C.A. No. 13-2058-RGA, D.I.

101 at 7.)

I conclude that the totality of the particular

circumstances here makes these cases stand out from

others with respect to Dragon’s substantive litigating

position: the disclaimer is very clear; it precludes a

finding of infringement by any of the defendants’

accused products; the information demonstrating noninfringement by the accused products was available to

Dragon prior to filing the suit; the defendants also put

Dragon on notice of the issue after the complaints were

filed; and Dragon nevertheless continued to litigate.

Accordingly, I agree with Dish and SXM that the

cases are exceptional and that they should be awarded

attorney’s fees. See Thermolife Int’l, 922 F.3d at 1356–

62 (holding that district court did not abuse discretion

assert that claims should be interpreted as if they had

surrendered only what they had to.”).

Dragon also makes a convoluted claim construction argument

based on the PTAB’s findings in the IPR. The argument, to the

extent I can understand it, goes like this: The PTAB found that

claim 1 of the ʼ444 patent was obvious over Goldwasser and

Yifrach. Dish Network, 2016 WL 3268756, at *9. According to

Dragon, Goldwasser and Yifrach disclose continuous recording

devices. Dragon contends that, since the PTAB could not have

found that claim 1 was obvious unless all of its elements are

present in the prior art combination, it follows that claim 1 must

cover continuous recording devices. That argument fails for

multiple reasons not the least of which is that the PTAB did not

consider whether there was a prosecution disclaimer and instead

gave the ʼ444 patent claims “their broadest reasonable construction in light of the specification.” Dish Network, 2016 WL

3268756, at *3. I similarly reject Dragon’s argument that Dish’s

and SXM’s characterization of Goldwasser in the IPR proceedings

somehow “estops” them from asserting a disclaimer here.

49a

in awarding fees when plaintiff could have discovered

through an adequate pre-suit investigation that the

defendant did not infringe); see also id. at 1358 (“[T]he

presence of [early notice of the defects in plaintiffs’

infringement assertions], followed by continuation of

litigation, can be a factor in justifying an award of

attorney’s fees[.]”).

B. Dish and SXM may not recover fees incurred

in the IPR.

The next issue I must decide is whether Dish and

SXM may recover attorney’s fees that they incurred in

connection with the IPR proceedings.11 The Federal

Circuit previously declined to answer that question,

remanding the cases to this Court instead for “initial

consideration of [the] fee motions.” Dragon Intell.

Prop., 956 F.3d at 1362. Notwithstanding, the Federal

Circuit remarked that it “[saw] no basis in the Patent

Act for awarding fees under § 285 for work incurred in

inter partes review proceedings that the Appellants

voluntarily undertook[.]” Id. That remark is dicta, but

I agree that there is no basis in the Patent Act for

awarding fees incurred in PTAB proceedings that Dish

and SXM voluntarily undertook.

The text of 35 U.S.C. § 285 says nothing about giving

the district court the ability to award fees incurred by

a prevailing party in a separate administrative

The record before the Court does not contain a current

estimate of the amount of fees at issue. In 2016, Dish estimated

its fees as approximately $1.1 million for both the district court

litigation and the IPR proceedings. (D.I. 131 at 16.) It is possible

(but not clear from the record) that a significant percentage of

those fees were incurred solely in connection with the IPR

proceedings. (Tr. 20:24–21:19, 62:25–63:4, 63:18–64:19.) In 2016,

SXM estimated its fees for both proceedings as $1.52 million.

(C.A. No. 13-2067, D.I. 140 at 15.)

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proceeding. The statute simply states that “[t]he court

in exceptional cases may award reasonable attorney

fees to the prevailing party.” 35 U.S.C. § 285. The

statute appears in the chapter of Title 35 concerning

remedies in infringement actions. 35 U.S.C., Chap. 29,

§§ 281–299 (“Remedies for Infringement of Patent; and

Other Actions”). And there is no dispute that the

“cases” to which the statute refers are judicial

proceedings. In other words, IPR proceedings are not

“cases.” Amneal Pharms. LLC v. Almirall, LLC, 960

F.3d 1368, 1371–72 (Fed. Cir. 2020).

Dish and SXM do not go so far as to argue that a

party who prevails in an IPR can then turn around and

file an action in district court to seek fees under § 285.

But they do argue that a defendant that is sued in

district court and is a prevailing party can, in that

district court case, be awarded the fees it incurred in a

separate IPR that it voluntarily sought if the reason it

asked for the IPR is because it was sued in district

court.

The Supreme Court’s decision in Octane Fitness,

LLC v. ICON Health & Fitness, Inc. is not relevant to

the issue here. There, the Supreme Court stated that

the text of § 285 “imposes one and only one constraint

on district courts’ discretion to award attorney’s fees

in patent litigation: The power is reserved for

‘exceptional’ cases.” 572 U.S. at 553. But in that case,

the Supreme Court dealt only with the question of

what circumstances make a patent case “exceptional”

under § 285. Id. at 553–54. The Court did not consider

the scope of attorney’s fees recoverable under § 285.

And saying that a district court has broad discretion

to award fees whenever it concludes that a patent case

is exceptional is not the same thing as saying that a

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court can award attorney’s fees for time that was not

expended litigating the “case.”

Dish and SXM point to the Federal Circuit’s opinion

in PPG Indus., Inc. v. Celanese Polymer Specialties Co.,

840 F.2d 1565 (Fed. Cir. 1988). Whether that case was

correctly decided is, of course, not for me to say. But it

is distinguishable. There, the Federal Circuit held that

a defendant sued for infringement in district court

could recover under § 285 the fees it incurred opposing

the patentee’s PTO reissue proceedings, where the

district court stayed the infringement case over the

defendant’s objection and the defendant’s “participation in [the] reissue application proceedings was not

optional.” Id. at 1568. In so holding, the Federal Circuit

distinguished the Supreme Court’s opinion in Webb v.

Bd. of Educ. of Dyer Cty., Tenn., 471 U.S. 234 (1985),

which held that attorney’s fees incurred while pursuing

optional administrative proceedings were not compensable under a fee-shifting statute in a later district

court case, even where the party seeking fees ultimately

prevailed in the district court litigation. Id. at 240–41.

PPG does not help Dish and SXM here because they

acknowledge that the IPR proceedings were optional.

(See D.I. 199 at 23; Tr. 34:5–14.) And my conclusion

that fees incurred in the IPR proceedings are not

recoverable in this litigation is also consistent with, if

not required by, the Supreme Court’s decision in Webb.12

Dish and SXM also cite the Supreme Court’s

decision in Sullivan v. Hudson, 490 U.S. 877 (1989), but

that case is inapposite. Hudson held that an applicant

for social security benefits could obtain fees under the

I suspect that other analogous cases exist but FAW did not

cite Webb or any other case applying it. Dragon did not respond

to the defendants’ arguments regarding IPR attorney’s fees.

52a

Equal Access to Justice Act for work performed before

the Social Security Administration after a reviewing

district court remanded the applicant’s case to the

agency for further proceedings. Id. at 892–93. The

statutory scheme governing district court review of

Social Security benefit determinations is not at all

comparable to the situation here. This Court doesn’t

review IPR decisions, and this Court didn’t remand

anything to the PTAB. The PTAB proceeding was

optional.13

Dish and SXM contend that, by not allowing them to

recover their IPR fees under § 285, the Court is in

effect punishing them for choosing the more efficient

route to resolve these cases. My answer to that is this:

Dish and SXM also cite three district court cases that

awarded fees under § 285 for work performed before the PTO, but

I am not persuaded by their reasoning. See Munchkin, Inc. v. Luv

N’ Care, Ltd., No. 13-06787, 2018 WL 7504404 (C.D. Cal. Dec. 27,

2018), rev’d on other grounds by 960 F.3d 1373 (Fed. Cir. 2020);

My Health, Inc. v. ALR Techs., Inc., No. 16-00535, 2017 WL

6512221 (E.D. Tex. Dec. 19, 2017); Deep Sky Software, Inc. v.

Southwest Airlines Co., No. 10-1234, 2015 WL 10844231 (S.D. Cal.

Aug. 19, 2015).

My Health cited no legal authority supporting its award of IPR

fees. My Health, 2017 WL 6512221, at *6. Munchkin relied on My

Health and the Supreme Court’s decision in Fox v. Vice, 563 U.S.

826 (2011), but Fox had to do with how a court should calculate a

fee award to a prevailing defendant when a plaintiff brought a

mix of frivolous and non-frivolous claims. Munchkin, 2018 WL

7504404, at *7; see Fox, 563 U.S. at 835–39. Fox did not assess

whether a district court may rely on a fee-shifting statute to

award fees incurred by a party in an optional administrative

proceeding.

Deep Sky Software relied on the Federal Circuit’s decision in

PPG to award fees under § 285 for legal services performed

during an inter partes reexamination, 2015 WL 10844231, at *2,

but, as already explained, PPG is distinguishable.

53a

raise it with Congress. Federal courts don’t make

policy. Congress could have provided for such fee

shifting but it didn’t. This Court cannot change that.14

I recommend that the Court deny Dish’s and SXM’s

fee requests to the extent they seek fees for work

performed in the optional IPR proceedings.15

C. The Court cannot assess fees against Dragon’s

former counsel under § 285.

Dish and SXM also want FAW and Mr. Freitas to be

found jointly and severally liable for any fee award. To

be clear, Dish and SXM do not argue that FAW or Mr.

Freitas had any relationship with Dragon aside from

their attorney-client relationship.16 Dish and SXM also

I note that fees are available in IPR proceedings under

certain circumstances. See 37 C.F.R. § 42.12 (discussing the

sanctions available in proceedings before the PTAB, including

“[a]n order providing for compensatory expenses, including

attorney fees”).

I anticipate that there will be a future dispute about whether

some of the work performed during the pendency of the IPR

proceedings should be reimbursed on the basis that the work

product was also necessary for the district court proceedings. (Tr.

63:18–64:19.) That issue hasn’t been briefed, so I don’t decide it

here. The Court will have to sort it out when it receives Dish’s and

SXM’s fee applications. I will say that it is presently unclear to

me how Dish and SXM could recover fees incurred while the

district court cases were stayed.

(Tr. 30:22–31:7 (“THE COURT: You made no showing, have

you, that Mr. Freitas or his firm are, essentially, the Wizard of Oz

behind the curtain and are really behind Dragon, right? You’re

not making an argument that I should pierce the corporate veil,

and when I do, I’m going to find Mr. Freitas and his law firm,

right? That’s not an argument that you made. [DISH’S

COUNSEL]: We haven’t made that argument.”).

54a

rely solely on 35 U.S.C. § 285 as the basis for their

request.17 I recommend rejecting that request.

It cannot seriously be disputed that 35 U.S.C. § 285

is generally understood to permit attorney’s fees

awards against the losing parties in a patent infringement suit, not their attorneys. Evidencing that general

understanding is the fact that the Patent Act has

contained a fee-shifting provision since 1946, and the

defendants here haven’t pointed to a single case where

a court relied on it to assess fees against the losing

side’s attorneys. See 35 U.S.C. § 70 (1946 ed.).

The parties agree that there is no binding authority

on this issue, but the Federal Circuit has held in two

non-precedential opinions that § 285 does not support

a fee award against counsel

This text is long and has been trimmed here. Open the source document for the complete record.

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