Where Both Parties Behave Badly in Litigation, Attorneys’ Fees Are Unlikely to Be Awarded
On April 25, 2019, in Int’l Designs Corp., LLC, et. al. v. Hair Art Int’l, Inc., Judge George H. Wu in the Central District of California denied Hair Art’s motion for attorneys’ fees under 35 U.S.C. § 285. Judge Wu concluded that, based on an analysis of the totality of the circumstances, “[t]his case was certainly ‘exceptional,’ but it was exceptional in that both parties made litigation choices leading to a significant waste of party and judicial resources.” (Emphasis added.) This opinion provides helpful guidance regarding Section 285 culpability, especially to parties substituting counsel. Here, although Hair Art jettisoned its original counsel partway through the case, the court nonetheless considered prior counsel’s conduct in its analysis—and denied an award of attorneys’ fees due to prior counsel’s behavior.
After International Designs Corp. (“IDC”) sued Hair Art for patent infringement in 2017, the court resolved what it termed “excessive motion practice,” including five motions to dismiss and seven “various ex parteapplications and peripheral motions” in the pleading stage. Following claim construction, Hair Art replaced its counsel. New counsel filed a motion for summary judgment on non-infringement near the close of fact discovery in early 2019, and also dropped a counter-claim alleged by prior counsel after expressing uncertainty about its underlying legal basis. After Judge Wu granted Hair Art’s motion for summary judgment and entered final judgment, Hair Art moved for attorneys’ fees.
Applying the Supreme Court’s standard set forth in Octane Fitness, Judge Wu denied the motion even while noting that the case was “certainly exceptional” because both parties were equally culpable for their unreasonable litigation conduct. In particular, the parties failed to follow norms of professionalism and civility, chose to litigate the case through excessive motion practice, and submitted “unfocused” briefs. Further, although a case may be “exceptional” if the substantive strength of the plaintiff’s case is objectively weak, here the court declined to find that IDC’s case was weak. The court rejected Hair Art’s argument in this regard, noting that while IDC failed to provide evidence during claim construction, if it had done so the question of infringement at summary judgment would have been much closer.
Notably, Judge Wu concluded that Hair Art remained responsible for its prior counsel’s unreasonable litigation conduct, even though it substituted counsel. The result in this case also underscores the lack of patience courts are likely to have with Section 285 motions in circumstances like this case. Mercutio’s famous line—“a plague o’ both your houses”—rings true: attorneys’ fees are likely unavailable if both parties behave badly in litigation.