Last week, the U.S. Court of Appeals for the Federal Circuit issued an opinion in In re: PersonalWeb Techs. LLC, 21-1858 (Nov. 3, 2023), affirming a district court’s award of fees in a patent infringement case.
In 2011, PersonalWeb sued Amazon alleging Amazon’s S3 technology infringed PersonalWeb’s patents. After an unfavorable claim construction ruling, PersonalWeb stipulated to dismissal of its claims with prejudice. In 2018, PersonalWeb sued eighty-five Amazon customers alleging their use of Amazon’s S3 technology infringed the same PersonalWeb patents. Amazon intervened and filed a declaratory judgment action asserting the customer suits were barred by the dismissal of the 2011 suit. The Amazon case and customer cases were consolidated into an MDL, and PersonalWeb agreed one customer case against Twitch was representative of its potential success in all customer cases. The court stayed the other cases and proceeded with the Twitch case and the declaratory action. A year into the case, PersonalWeb added new claims of infringement based on Amazon’s CloudFront technology. The court’s grants of summary judgment on the S3 claims based on claim preclusion and of noninfringement on the CloudFront claims were affirmed by the Federal Circuit. The district court determined the case was “exceptional” and awarded fees to the defendants under 35 U.S.C. § 285. PersonalWeb appealed.
The Federal Circuit affirmed. The Court examined the five findings of the district court supporting the award of fees under an abuse of discretion standard. First, the Court explained that the well-settled Kessler doctrine dictates a patentee cannot sue an alleged infringer’s customers after a finding of non-infringement, meaning the S3 claims against the customers should never have been brought. Second, the Court noted that PersonalWeb frequently changed its infringement positions. Third, the Court noted PersonalWeb’s conduct unnecessarily prolonged litigation and attempted to re-litigate the district court’s claim construction. Fourth, the Court noted the impropriety of PersonalWeb’s attempt to revive the other customer cases after the dismissal of the Twitch case, despite its prior assertion that the Twitch case was representative. And fifth, the Court noted the inconsistency between declarations submitted in the present case and PersonalWeb’s representations in 2011. The Court affirmed, holding that the district court’s findings on these topics, and its ultimate fee award, did not constitute an abuse of discretion.