Darrell Metcalf alleged that Justin Timberlake’s FutureSex/LoveShow Tour, pictured here in Exhibit B, infringed on his patent for “large-audience displays.”Court documents
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It’s getting easier than ever for defendants to win fees in patent cases, especially against “non-practicing entities” with no products.
But don’t tell that to pop stars Justin Timberlake and Britney Spears.
The two celebrities and their respective production companies were sued by an entity called Large Audience Displays Systems, LLC (or LADS for short) back in 2009.
The patent-holder who came after them is Darrell Metcalf, the inventor of US Patent No. 6,669,346, which describes a way of displaying video images on massive, arced screens. Metcalf, who lives in California, set up an East Texas LLC called Large Audience Display Systems (or LADS for short) back in 2009, then sued the pop stars in that venue, along with the LA Lakers and the band Pussycat Dolls.
The case was transferred to California in 2011.
The judge promptly put the case on hold at the defendants’ request, while the patents were under reexamination at the US Patent Office. Ultimately, the office rejected all the patent claims.
With that, lawyers for Timberlake and Spears unloaded on LADS, filing a motion (PDF) asking for $755,925.86 in attorneys’ fees and costs.
According to the stars’ lawyers, the patent-holder took “ridiculous positions” during the re-exam and engaged in “gamesmanship” with regard to disclosing relevant prior art.
LADS was a “sham” constructed to manipulate the venue, they claimed. Metcalf, the patent-holder and owner of LADS, hadn’t visited the Texas office or picked up the keys.
Michael Niborski, one of the attorneys representing the two singers, wrote the following:
[M]ail merely accumulated in the basement of the building where LADS claimed to have its business.
This case, it is crystal clear, was nothing but an attempt by Plaintiff to shake out a financial settlement from high-income celebrity entertainers, independent of the merits.
Just two weeks after the briefing on the legal fees was complete, US District Judge Manuel Real granted the defendants’ fee request in full.
According to his short, four-page order (PDF), “Plaintiff’s litigation tactics have cost both Defendants and this Court to expend time and resources regarding the resolution of what appears to have been a frivolous claim.”
Not so frivolous
The US Court of Appeals for the Federal Circuit has put the singers’ fees request on ice, for now.
In an opinion (PDF) published Thursday, a three-judge panel overturned Real.
According to the panel, Real had relied “on both a misunderstanding” of the relevant factors and “a clearly erroneous view of the record.”
The appeals panel was unimpressed with the venue arguments, and it pointed out that the East Texas court may have been able to assert jurisdiction over the pop stars and their wide-ranging national tours whether LADS was formed in the Texas venue or not.
And the fact that the patent claims were canceled by the PTO “without more, does not support a finding of frivolousness.”
The appeals judges also expressed concerns with the billing presented.
They noted that partners did 79 percent of the work on the defense case, including simple tasks like e-filing documents. “It appears, moreover, that at least some of the billing entries were unreasonable,” they wrote.
Timberlake and Spears, who are represented by the same team of attorneys, will have another shot at recouping their fees, if they want.
The case has been remanded back to Judge Real with instructions to consider the fees issue under the guidelines presented by the opinion.
In 2014, the US Supreme Court decided the Octane Fitness case, which made getting fees in patent cases substantially easier.
LADS dismissed its case against the Pussycat Dolls in 2010, without prejudice, meaning it can be re-filed.
The case against the Lakers was dismissed with prejudice in 2012.