iLOR Must Pay Google’s Legal Fees For Baseless Lawsuit

Posted on | January 13, 2010 | No Comments

2010-1117 iLOR v Google
ED/KY 07-cv-109
Judge Joseph Hood

iLOR appeals from the finding of Judge Joseph Hood that its suit against Google was baseless and "exceptional" under 35 U.S.C. § 285 and that it should pay over $650,000 for Google's legal fees, costs and expenses.

iLOR sued Google claiming that the Google Notebook infringed 7,206,839, directed generally to  ’839 patent, which is directed to a “method for adding a user selectable function to a hyperlink.”  This user selectable function is commonly a toolbar that is associated with the hyperlink. 

iLOR sought a preliminary injunction, which the court denied because, as construed, it was undisputed that the Google Notebook did not infringe the '839 patent.  The Federal Circuit affirmed the claim construction and denial of the preliminary injunction, and the trial court further granted Google summary judgment of non-infringement.  The Federal Circuit decision is here. 

The main issue centered around whether the claim covered a toolbar that appeared only if the user "right clicked."  The courts all found that iLOR had clearly distinguished "right clicks" during prosecution–and it was undisputed that the Google Notebook displayed the hyperlink toolbar only following a right-click.

On the motion to delcare the case exception and for fees, Judge Hood found that iLOR knew or should have known that its suit against Google was baseless from the start.  There was evidence that iLOR knew before filing the lawsuit that the Google Notebook required a "right-click," and also that it knew that the patent claims did not cover a right-click.  The court wrote:

All of this is to say that, prior to instituting the present lawsuit, iLOR took the position in both its patent prosecution and its portrayal of its product to the public that it had created something unique and that the uniqueness depended upon a link enhancement toolbar that displayed automatically instead of in response to a user’s right click, as one would find in Google Notebook. It follows that iLOR was aware or should have been aware of the fatal flaws in its theory of the case in this instance, even if it failed to recognize them for what they were.

The Court concludes that this case was brought in objective bad faith and was frivolous based on iLOR’s awareness of or, at best, willful blindness to, these flaws.

Order, p. 9.

The court, after reviewing the actual hours spent and the rates charged by Google's main and local counsel, followed a lodestar approach and awarded fees for over 1500 hours and at an average hourly rate of approximately $400.  In doing so the court recognizes that patent litigators are specialists, practicing "nationally," and therefore higher rates are jusitifed:

The attorneys were clearly specialists in the field of intellectual property – which is, by its very nature, national and not necessarily regional in scope – and, specifically, infringement suits, the art of litigating such a suit, and the background issues of patent prosecution…it makes sense to proceed with such counsel, even at a higher rate than one might pay for local counsel, in a suit such as this.

Order, p. 13.

Note: Google apparently sought fees only against iLOR and not against iLOR's counsel.  Also, the court noted that Google's belated attempt to seek fees against iLOR under 28 U.S.C. § 1927 (vexatious litigation) was inapplicable because § 1927 relief is available only against attorneys and not parties.  Order, fn 1, pp. 3-4.2010-1117 Order Re Exceptional

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