USA - TEXAS Trends and Developments Contributed by: Danielle Healey and Matthew David, Spencer Fane LLP
Challenging enhanced damages – exceptional case determinations: Realtime Adaptive Streaming v Sling TV In Realtime Adaptive Streaming v Sling TV, the Federal Circuit reversed a district court’s deci- sion that designated the case as “exceptional” under 35 U.S.C. § 285 and awarded attorneys’ fees to Sling TV. The decision underscores the challenge courts face in determining when a pat- ent case is exceptional and reinforces that fee awards require strong evidentiary support. The dispute stemmed from claims that Sling TV had infringed patents related to adaptive video streaming. The district court ruled that Realtime’s litigation tactics – including pursuing claims after adverse rulings in related cases – rendered the case exceptional. However, the Federal Circuit found that several of the district court’s identi- fied “red flags” were either improperly justified or lacked sufficient explanation to warrant the exceptional case designation. Key takeaways: • Courts must justify why a case meets the “exceptional” standard before awarding fees. • Aggressive litigation strategies, such as defence counsel’s notice letter, do not always constitute a significant concern. • A “red flag” is inapplicable unless it is directly related to infringement or invalidity. • Defendants should ensure their fee requests are backed by compelling evidence of bad faith or objectively unreasonable litigation conduct. Anti-suit injunctions: Ericsson v Lenovo In Ericsson v Lenovo, the Federal Circuit pro- vided clarity on when US courts can issue anti- suit injunctions in SEP disputes. The decision underscores that US courts may enjoin litigants
from enforcing foreign injunctions if the domestic case is dispositive of the core licensing dispute. The court applied a three-part test from the 9th Circuit to determine when an anti-suit injunction is appropriate: • First, the parties and issues must be the same as between the domestic and foreign suits, and that domestic suit must be dispositive of the foreign action to be enjoined. • Second, the court must consider whether one of the anti-suit-injunction factors applies. • Third, the court must consider whether the anti-suit injunction’s impact on comity is tol- erable (ie, enjoin the litigant, not the litigation). In this case, the test applied was whether the domestic case would resolve the availability of injunctive relief, with a nod to comity. The court found that the SEP issue in the US case would preclude injunctive relief in any other country due to the duty to license. Key takeaways: • US courts remain a critical forum for resolving global SEP disputes due to their willingness to issue anti-suit injunctions. • The application of this three-part test will serve as a guide for future SEP litigation where multinational enforcement strategies are at play. • This decision reinforces the necessity for SEP holders to carefully navigate FRAND licensing commitments in different jurisdictions. • Comity is afforded to the foreign court because its proceedings are not enjoined, but rather, the litigant is enjoined from enforcing the remedy. The interplay between standard-essential pat- ents (SEPs) and fair, reasonable, and non-dis-
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