Home Gambling Network, Inc. v. Piche

In patent infringement cases, the award of attorneys' fees is reserved for “exceptional cases”; if the infringement is premised on operations that are outside of the United States, the claim cannot be successful and is likely subject to an award of attorneys’ fees.

Opinion (Ezra): Plaintiff Home Gambling Network (HGN) sued Defendants, Chris Piche, Inversiones VS Dos Mil, S.A. DBA casinowebcam.com (CWC), and Eyeball Networks, for breaching a patent license agreement. The Court previously found that there was no infringement of a patent or contract. Subsequently, Defendants filed a Motion for Attorneys’ Fees and Costs. The Supreme Court has held that the only constraint on district courts’ discretion to award attorney’s fees in patent litigation is that the power is reserved for “exceptional cases.” A case is “exceptional” when it 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.” In this case, the alleged patent infringement was committed outside of the United States. Conduct that occurs outside of the United States cannot infringe a method covered by a United States patent; all steps of the method patent must be performed within the United States for there to be liability for patent infringement. There was no dispute between Plaintiff and Defendant that Defendant was located in Costa Rica. Therefore, Defendant argued that this case was exceptional pursuant to § 285 because Plaintiffs should have known that “to the extent their infringement claim was premised on . . . operations that Defendants were performing overseas,” their claim could not be successful. The Court agreed, and Defendants’ motion for Attorneys' Fees and Costs was GRANTED.