In re: Personalweb Technologies LLC, [2021-1858, 2021-1859, 2021-1860] (November 3, 2023) the Federal Circuit affirmed a $5,187,203.99 award of attorneys’ fees against Personalweb.

In 2018, PersonalWeb asserted the True Name patents against eighty-five Amazon customers (the “customer cases”) across the country for their use of Amazon S3.  After summary judgment was granted against PersonalWeb on two different patents, the district court granted defendant’s motion for attorneys’ fees and costs under 35 U.S.C. § 285, determining that the case was exceptional.  Specifically, the district court found that:

• PersonalWeb’s infringement claims related to the first product were objectively baseless and not reasonable when brought because they were barred due to a final judgment entered in the Texas Action.
• PersonalWeb frequently changed its infringement positions to overcome the hurdle of the day;
• PersonalWeb unnecessarily prolonged this litigation after claim construction foreclosed its infringement theories;
• PersonalWeb’s conduct and positions regarding the customer cases were unreasonable; and
• PersonalWeb submitted declarations that it should have known were not accurate.

“The court in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U.S.C. § 285. To determine whether a case is exceptional under § 285, courts consider “the totality of the circumstances.”  An exceptional case is “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.”

The Federal Circuit said that the district court lived with this case and its counsel for years. It thoroughly reviewed the totality of the circumstances to find that this case both lacked “substantive strength” and was litigated in an “unreasonable manner.”  The Court saw no clear error in law or fact by the district court in arriving at these conclusions.

The district court took steps to be fair. For early motion practice, such as the motion to stay and motion for preliminary injunction, the district court recognized the efficiency of these tactics, stating Amazon “would have undoubtedly incurred even more legal fees in actively defending the menagerie of customer cases.” The Federal Circuit noted that the district court reduced Amazon’s requested fees by 25% to account for “otherwise necessary activities” after explaining PersonalWeb’s “abandoned infringement theories serially dominated the case, leading to unnecessary work across multiple categories of litigation.”