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Quest Licensing Corporation v. Bloomberg L.P.

United States District Court, D. Delaware

March 27, 2019

QUEST LICENSING CORPORATION Plaintiff,
v.
BLOOMBERG L.P. and BLOOMBERG FINANCE L.P, Defendants. QUEST LICENSING CORPORATION Plaintiff,
v.
INTERACTNE DATA CORPORATION Defendant. QUEST LICENSING CORPORATION Plaintiff
v.
THE CHARLES SCHWAB CORPORATION ET AL. Defendant.

          Stephen B. Brauerman and Sara E. Bussiere, BAY ARD, P.A., Wilmington, DE Alfred. R. Fabricant, Lawrence C. Drucker, and Vincent J. Rubino, III, BROWN RUDNICK, LLP, New York, NY Attorneys for Plaintiffs

          Rodger D. Smith II and Michael J. Flynn, MORRJS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, DE Michael Levin, WILSON SONSINI GOODRICH & ROSATI PC, Palo Alto, CA Edward G. Poplawski and Olivia M. Kim, WILSON SONSINI GOODRICH, Los Angeles, CA Attorneys for Defendants Bloomberg L.P., Bloomberg Finance L.P., The Charles Schwab Corporation, and Charles Schwab & Co., Inc.

          David E. Moore, Bindu A. Palapura, and Stephanie E. O'Byme, POTTER ANDERSON & CORROON LLP, Wilmington, DE Robert S. Mallin, BRINKS GILSON & LIONE, Chicago, IL Attorneys for Defendant Interactive Data Corporation

          MEMORANDUM OPINION

          STARK, U.S. District Judge

         Pending before the Court is Defendants Bloomberg L.P. and Bloomberg Finance L.P. ("Bloomberg"), Interactive Data Corporation ("IDC"), and The Charles Schwab Corp. and Charles Schwab and Co.'s ("Charles Schwab") (collectively "Defendants") renewed motion to declare this case exceptional and for attorneys' fees pursuant to 35 U.S.C. § 285. (D.I. 248) On April 29, 2014, Plaintiff Quest Licensing Corp. ("Quest" or "Plaintiff) sued Defendants, alleging infringement of U.S. Patent No. 7, 194, 468 ("the '468 patent"). (D.I. I)[1]

         The asserted claims of the '468 patent include the following limitation (or one similar to it): "[a]pparatus for supplying to interested subscribers via a mobile telecommunications network changing price information for a plurality of different sets of financial market data" (emphasis added). The Court construed "changing [price] information" to mean "only [price] data that has changed." (D.I. 138 at 1) (emphasis added) In doing so, the Court explained:

The plaintiff seeks plain and ordinary meaning, or "information subject to change over the course of a period of time." The court rejects this definition for two reasons. First, as the defendants note, the specification emphasizes conservation of bandwidth as central to this invention. See 468 patent at 1:23-27. By sending updates that include only changed information, the system can accomplish this goal. 468 patent at 2:29-39, 13:18-23. Second, the plaintiffs own statements to the Patent Trial and Appeal Board ("PTAB") support the defendants' construction. In its Preliminary Response to the Covered Business Method Patent Review ("CBMR"), the plaintiff stated that the "claims also provide for an apparatus whereby only changed information of interest to the subscriber is sent to that subscriber's mobile device." (D.I. 123 at ASS (emphasis in original).) The court declines to construe this term inconsistently with the explanation the patent owner provided to the PTAB.

(D.I. 138 at 1 n.2)

         Thereafter, the Court granted Defendants' request to file a motion for summary judgment of non-infringement (D.I. 191) and then, after briefing (D.I. 194, 207, 208) and a hearing (D.I. 217), granted the summary judgment motion (D.I. 222). The Court then denied without prejudice Defendants' first motion for attorneys' fees. (D.I. 246) The Federal Circuit affirmed the Court's summary judgment order on June 8, 2018 (D.I. 247) and Defendants renewed their motion for attorneys' fees on August 8, 2018 (D.I. 248). Briefing was completed on September 7, 2018. (See D.I. 249; D.I. 253; D.I. 255) On September 12, 2018, the case was reassigned from the now-retired Honorable Gregory M. Sleet.

         LEGAL STANDARDS

         In "exceptional" patent cases, a Court may award "reasonable attorney fees" to the "prevailing party." 35 U.S.C. § 285. Federal Circuit law applies when interpreting and applying § 285. See Highway Equip. Co. v. FECO, Ltd., 469 F.3d 1027, 1032 (Fed. Cir. 2006). "An exceptional case under § 285 is '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 unreasonable manner in which the case was litigated.'" Nova Chems. Corp. (Canada) v. Dow Chem. Co., 856 F.3d 1012, 1016 (Fed. Cir. 2017) (quoting Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S.Ct. 1749, 1756 (2014)). "While an adverse claim construction generally cannot, alone, form the basis for an exceptional case finding, ... a party cannot assert baseless infringement claims and must continually assess the soundness of pending infringement claims, especially after an adverse claim construction." Taurus IP, LLC v. Daimler Chrysler Corp., 726 F.3d 1306, 1329 (Fed. Cir. 2013). Ultimately, the Court must make a discretionary decision based on the totality of circumstances, which may include factors such as "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." Octane Fitness, 134 S.Ct. at 1756 & n.6. A party moving for attorneys' fees must demonstrate, by a preponderance of the evidence, that a case is exceptional." Id. at 1758.

         DISCUSSION

         There is no dispute that Defendants are the prevailing parties. The Court granted Defendants summary judgment of noninfringement, writing that Plaintiffs' argument "flies directly in the face of the court's claim construction." (D.I. 221 at 5-6) The Court found that Plaintiffs' non-infringement position was essentially an effort to relitigate claim construction and did not present any genuine disputes of material fact. (See Id. at 6-8) The Federal Circuit affirmed without opinion pursuant to Federal Circuit Rule 36.[2] (D.I. 249 at 1)

         Defendants cite several reasons for why this case "stands out" and should be deemed exceptional. Their principal contention is that Plaintiffs infringement claims became "exceptionally meritless" after the Court issued its claim construction order in March 2016, yet Plaintiff continued to litigate - driving up Defendants' costs and wasting judicial resources - despite knowing it could not prevail. After the claim construction order, Defendants repeatedly advised Plaintiff that, based on the undisputed manner in which their accused systems operated combined with Plaintiffs prior statements about the scope of their patents, Plaintiff should drop its claims (or agree to a stipulated judgment to allow an appeal) and, if Plaintiff refused, Defendants would seek their attorneys' fees.[3] Defendants add that Plaintiffs continued pursuit of claims it knew to be meritless demonstrates subjective bad faith. Finally, Defendants assert that Plaintiff was motivated by financial difficulties, which posed a threat to Plaintiffs ability to remain an operating entity, as is highlighted by the purportedly outrageous, unjustifiable settlement demands Plaintiff made.

         There are certainly grounds here on which a reasonable judge might deem this case to be exceptional. Once the Court issued its claim construction order, Plaintiffs likelihood of prevailing on infringement was reduced quite substantially.[4] This reality is evident not just in Defendants' repeated statements to Plaintiff to this effect but, more importantly, by Defendants' success in persuading Judge Sleet to permit them to file a motion for summary judgment of non-infringement. On November 15, 2016, Judge Sleet concluded that "[D]efendants have set forth a compelling argument for non-infringement based on the court's construction of the term 'changing information.'" (D.I. 191 at 2) As Defendants observe (without dispute from Plaintiff): "it was a rare event for this Court [i.e., Judge Sleet] to even grant permission to engage in summary judgment practice and to have a ...


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