Court orders Huawei to pay attorneys' fees for “wide-spread pattern of litigation abuse”
Huawei must pay attorneys’ fees in addition to a $10 million damages award for infringing patents owned by a patent licensing company.
In a ruling on Friday, November 15, the US District Court for the Eastern District of Texas found that due to the “egregious nature” of Huawei’s litigation conduct, and the fact that “Huawei would not commit to refraining from this sort of conduct in the future”, PanOptis was entitled to attorneys’ fees.
The dispute dates to 2017, when PanOptis sued Huawei for alleged infringement of five of its standard-essential patents (SEPs) relating to long-term evolution cellular communications.
PanOptis also asked the court for a declaratory judgment that it had complied with its obligation to licence the patents on fair, reasonable and nondiscriminatory terms (FRAND). But, during jury trial, Huawei argued that the terms offered by PanOptis were not FRAND. It later dropped this defence.
Ultimately, the jury returned a verdict in favour of PanOptis finding that Huawei willfully infringed the patents and awarded damages of more than $10 million.
In its latest action, PanOptis asked the court for a finding of exceptionality, and that it was entitled to an award of attorneys’ fees.
In “exceptional” cases, a district court “may award reasonable attorney fees to the prevailing party”. An “exceptional case” is “simply one that stands out from others with respect to the substantive strength of a party’s litigating position or the unreasonable manner in which the case was litigated”.
PanOptis said that Huawei had used timing and delay to its advantage and forced PanOptis to expend unnecessary resources by mounting FRAND defences through pretrial proceedings, as well as during trial, only to drop those defences later.
The court found that Huawei’s withdrawal of FRAND defences was “strategic” and “nothing less than rank gamesmanship that crossed the line of zealous advocacy”.
“In sum, once Huawei reaped all the benefits of its FRAND-centric defences during the jury trial, it dropped them like a hot rock,” the court said.
The court said this was “the worst and most egregious part of Huawei’s wide-spread pattern of litigation abuse”.
Additionally, PanOptis argued that Huawei’s infringement defences were weak and that the jury’s willful infringement finding is an indication that this is an exceptional case.
“Much of the conduct PanOptis complains of would not give rise to an exceptional case status if considered alone and separately but taken together within the totality of the circumstances this case stands out and is exceptional,” the court ruled.
Additionally, the court said Huawei would not commit to refraining from this “egregious” conduct in the future.
“When asked whether this course of conduct would repeat itself in the future, Huawei’s counsel said, ‘I don’t know what will happen in the future’”, the court said.
PanOptis was represented by McKool Smith.
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