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Broadsoft Inc. v. CallWave Communications LLC

United States District Court, D. Delaware

August 8, 2019

BROADSOFT, INC., Plaintiff,




         Presently before the court post-judgment in this declaratory judgment action for noninfringement and invalidity is a motion to declare this case exceptional under 35 U.S.C. § 285, filed by plaintiff BroadSoft, Inc. ("BroadSoft"). (D.I. 425)[1] Defendant CallWave Communications, LLC ("CallWave") opposes the motion. (D.I. 431) For the following reasons, BroadSoft's motion is denied.


         BroadSoft initiated the present litigation against CallWave on April 23, 2013, asserting causes of action for a declaratory judgment of non-infringement and invalidity of four CallWave patents, including U.S. Patent Nos. 8, 351, 591 ("the '591 patent"), and 7, 822, 188 ("the '188 patent"). (D.I. 1) On September 27, 2013, CallWave filed its answer and counterclaims accusing BroadSoft's BroadWorks product of infringing the '188 and '591 patents. (D.I. 21 at 13-16)

         The CallWave patents relate to methods of placing calls from a call processing system in response to a request and methods for allowing a user to screen a call. (D.I. 1 at ¶ 8) Prior to the filing of the present action, Call Wave filed suit in this District in January and February 2013, alleging infringement of the Call Wave patents by Telovations, Inc. ("Telovations"), a former BroadSoft customer and software licensee, and Bright House Networks, LLC ("Bright House"). (Id. at ¶¶ 9-21) Telovations and Bright House then sought indemnification from BroadSoft because BroadSoft licensed the accused BroadWorks software product to them. (D.I. 10 at 2-4)

         The court issued a Memorandum Opinion and Order in the present litigation on October 1, 2017, granting BroadSoft's motion for judgment on the pleadings based on patent ineligibility under 35 U.S.C. § 101, and granting BroadSoft's motion for summary judgment of invalidity. (D.I. 421; D.I. 422) The court entered judgment in favor of BroadSoft and against CallWave on October 2, 2017. (D.I. 423)

         On October 16, 2017, BroadSoft filed the instant motion for attorneys' fees and costs pursuant to 35 U.S.C. § 285. (D.I. 425) On October 27, 2017, CallWave filed an appeal to the Federal Circuit regarding the court's Memorandum Opinion and Order granting judgment in favor of BroadSoft. (D.I. 430) The court stayed consideration of the motion for attorneys' fees and costs pending the outcome of the appeal before the Federal Circuit. (D.I. 442) The Federal Circuit issued its mandate on November 26, 2018, affirming the decision of the District Judge, and the stay was lifted on the motion for attorneys' fees and costs. (D.I. 450)


         Section 285 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] 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." 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 quotation marks omitted). Cases which may merit an award of attorney fees include "the rare case in which a party's unreasonable conduct-while not necessarily independently sanctionable-is nonetheless so 'exceptional' as to justify an award of fees" or "a case presenting either subjective bad faith or exceptionally meritless claims." Id. at 546. A movant must establish its entitlement to attorneys' fees under § 285 by a preponderance of the evidence. Id. at 557.

         IV. ANALYSIS

         It is undisputed that BroadSoft is the prevailing party. Following the Federal Circuit's mandate affirming the judgment of the District Court, BroadSoft has indisputably received relief on the merits which alters the legal relationship of the parties. See Parallel Iron LLC v. NetApp Inc., 70 F.Supp.3d 585, 589 (D. Del. 2014) (holding that, "for a party to be a prevailing party, that party must win a dispute within the case in favor of it that materially alters the legal relationship between the parties at the time of the judgment."). Thus, the only issue is whether the case is exceptional. The court must evaluate the totality of the circumstances to determine whether this case warrants exceptional status under § 285.

         A. Sequential Ring Claim [2]

         In support of its motion to declare the case exceptional, BroadSoft alleges that CallWave's assertion of the sequential ring claim is objectively meritless because CallWave asserted the claim following the Supreme Court's 2010 decision in Bilski v. Kappos,561 U.S. 593 (2010), which held that adding a generic computer implementation to human activity was insufficient to satisfy the patent eligibility standard under § 101. (D.I. 426 at 16-17) BroadSoft contends that CallWave maintained its infringement position even after the Supreme Court's decision in Alice ...

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