Straight Path IP Group, Inc. v. Cisco Systems, Inc. CAFC

Earlier this year, RPX provided a detailed walk-through of a Special Master’s report and recommendation regarding attorney fees that defendants Apple and Cisco sought in litigation brought by Straight Path IP Group, Inc. The Special Master contended with a lack of caselaw regarding how alternative fee arrangements should be handled in the exceptional case context, ultimately recommending that $2.3M in fees should be awarded to Apple and that a reduced $1.9M should be awarded to Cisco: “This report concludes that such alternative fee arrangements, whether flat fee or otherwise, may be compensable under Section 285, but that prevailing parties must be required to satisfy appropriate reasonableness standards to ensure fairness and to protect against potential abuse”. District Judge William H. Alsup has now adopted those recommendations, bringing the “protracted fee dispute—‘one of the least socially productive types of litigation imaginable’”—to an end.

In early December 2019, District Judge William H. Alsup appointed a Special Master to resolve a dispute between plaintiff Straight Path IP Group, Inc. and defendants Apple and Cisco over the reasonableness of requested fees and costs. After granting each defendant summary judgment of noninfringement, Judge Alsup awarded fees in a late-November order that “finds that the shifting sands of the patent owner’s delineations of the claimed invention’s scope—instigated by its narrowing of scope to avoid invalidity before the Federal Circuit, followed by its broadening of scope to accuse others of infringement in the district court—render the above-captioned actions ‘exceptional’”. The appointed Special Master has returned his report and recommendation, indicating that Apple should be awarded $2.3M in fees; Cisco, a reduced $1.9M, the latter to compensate for work performed under an alternative fee arrangement with counsel: “This report concludes that such alternative fee arrangements, whether flat fee or otherwise, may be compensable under Section 285, but that prevailing parties must be required to satisfy appropriate reasonableness standards to ensure fairness and to protect against potential abuse”.

In the wake of several favorable Patent Trial and Appeal Board (PTAB) decisions, Straight Path IP Group, Inc. has refiled cases that it had earlier withdrawn, against Avaya (3:16-cv-03459) and Cisco (5:16-cv-03463) in the Northern District of California and against Verizon (Cellco) (1:16-cv-04236) in the Southern District of New York. All three complaints assert three VoIP patents (6,108,704; 6,131,121, 6,701,365), with a fourth patent (6,009,469) from the same 11-member family asserted against Avaya and Cisco. Those favorable PTAB decisions came in response to several of the over 25 petitions for inter partes review (IPR) filed, joining one re-examination certificate for each of five of the patents-in-suit, which have been asserted in two campaigns stretching back almost exactly a decade.