Bed Bath & Beyond secures attorneys’ fees win at Federal Circuit
The US Court of Appeals for the Federal Circuit has affirmed a district court’s decision to order a patent holding company to pay retailer Bed Bath & Beyond around $1 million in attorneys’ fees.
Handed down on Friday, December 8, the ruling affirmed a finding by the US District Court for the District of Delaware that Inventor Holdings’ claims were “objectively without merit” following the Alice v CLS Bank decision.
Inventor is the owner of patents developed by Walker Digital, a research and development laboratory that started up Priceline.com, a website that helps users find discounted rates for travel-related purchases.
In April 2014, Inventor sued Bed Bath & Beyond for infringement of US patent number 6,381,582. The patent relates to a method of purchasing goods at a local point-of-sale system from a remote seller.
Two months later, in June, the US Supreme Court issued its Alice decision regarding the eligibility of subject matter for patent protection.
The Supreme Court ruled that Alice’s patent claims covered an abstract idea and that their implementation using a computer was not enough to deem that idea patentable.
Bed Bath & Beyond then moved for judgment on the pleadings in February 2015, arguing that the Alice decision rendered the asserted claims of the patent invalid under 35 USC section 101.
Section 101 of the US Code states: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title.”
The Delaware court granted the motion in August 2015, a decision which had been previously approved by the Federal Circuit without opinion.
Bed Bath & Beyond then moved for an award of attorneys’ fees, claiming that following Alice, Inventor should have reevaluated its case and dismissed the action.
The court granted the fees motion, awarding Bed Bath & Beyond its attorneys’ fees of nearly $1 million, beginning from the date of the Alice decision.
Inventor appealed to the Federal Circuit. The patent holding company argued that the case was not exceptional because section 101 was an “evolving area of the law,” which made patent-eligibility analysis difficult and uncertain after Alice.
The patent holding company put forward a series of arguments, including that Alice did not fundamentally change section 101 law, noting that the Supreme Court applied the same test in Alice that it previously set out in Mayo, and that the section was, and is, an evolving area of law so the section 101 enquiry in the case was difficult.
Circuit Judge Raymond Chen, on behalf of the court, said: “We find IH’s arguments to be meritless.”
Chen added that the district court had determined the case was exceptional “based solely on the weakness of Inventor’s post-Alice patent-eligibility arguments and the need to deter future ‘wasteful litigation’ on similarly weak arguments”.
The Federal Circuit concluded that the lower court had acted within the scope of its discretion in finding the case to be exceptional based on the weakness of Inventor’s section 101 arguments and affirmed the decision.
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