Realtime Adaptive Streaming L.L.C. v. Sling TV, L.L.C., Appeal No. 2023-1035 (Fed. Cir. August 23, 2024)

In its only precedential patent decision this week, the Federal Circuit helped clarify which facts may be considered by a district court in its “exceptional case” determination to award attorneys’ fees pursuant to Section 285.

Realtime Adaptive Streaming, L.L.C. sued Sling TV, DISH Technologies, and others for infringing two patents: its “535 patent” and its “610 patent.” While this case was being litigated, the claims of the patents were being litigated in other fora. In a case brought in California against Google, the district court found claims 15-30 of the ’535 patent ineligible, but claims 1-14 eligible, for patenting. In a case brought in Delaware against Netflix, the district court found claim 15 of the ’535 patent (as a representative claim) ineligible for patenting.

Ultimately, the district court granted DISH’s motion for summary judgment of invalidity based on Section 101. The district court awarded fees pursuant to Section 285, finding, in its discretion, that Realtime Adaptive’s case was “exceptional” based on its continued pursuit of the case on the basis of six “red flags.” On appeal, the Federal Circuit reversed, considering the merits of each “red flag” in terms of whether it was properly a consideration under Section 285.

First, the Court considered the findings in the Google and Netflix cases, and found them to be relevant to whether the case was exceptional. Realtime argued those decisions only concerned the ’535 patent, and not the ’610 patent. The ’610 patent had a “virtually identical” specification. Moreover, the district court in this case had made specific findings that claim 15 of the ’535 patent was “essentially the same in substance” as claim 1 of the ’610 patent, which the Federal Circuit found sufficient.

Second, the Court considered a non-precedential decision from the Federal Circuit in a different case titled Adaptive Streaming that concerned a similar technology. The Federal Circuit disagreed that it was an appropriate red flag:

[Whereas] Google and Netflix were significant warnings to Realtime in large part because they were about a similar patent in the same family with nearly identical claim language[,] Adaptive Streaming . . . was about a different technology entirely. Without more, such as a side-by-side analysis of all limitations of a claim of the ’610 patent and the claims at issue in Adaptive Streaming, DISH simply did not adequately show that the patent infringement claim had been rendered exceptionally meritless. The district court erred in finding that the Adaptive Streaming decision should have put Realtime on notice that its patent claims were meritless when deciding whether to award attorneys’ fees.

Third, the Court considered two Patent Trial and Appeal Board (PTAB) proceedings that invalidated claims 1-14 of the ’535 Patent. The Court found those decisions not relevant because they concerned invalidity over prior art, and not patent ineligibility under Section 101. Although prior art might be relevant to whether a patent’s invention was “well-understood, routine, and conventional,” as relevant to one of the factors under Section 101, there was an insufficient link here between the Board’s findings and the arguments raised in this case.

Fourth, during ex parte reexamination proceedings, the patent office rejected certain claims of the ’610 patent invalid as obvious. The Federal Circuit held this was inapplicable as a red flag for the same reason as the findings in the PTAB proceedings.

Fifth, the Court considered a notice letter DISH sent to Realtime concerning the merits of its case. The Federal Circuit rejected this as a red flag.

If such a notice letter were sufficient to trigger § 285, then every party would send such a letter setting forth its complaints at the early stages of litigation to ensure that—if it prevailed—it would be entitled to attorneys’ fees. This is not to say that communications between litigants could not be considered in an exceptionality determination.

In this case, the notice letter did little more than rely on the Google and Netflix decisions, which was insufficient to be relevant to an “exceptional case” determination. The letter “contains no analysis sufficient to put the patentee on notice that its arguments regarding ineligibility are so meritless as to amount to an exceptional case.”

Sixth, the Court considered the opinions of DISH’s expert. However, both sides submitted expert reports, and the fact that one expert “may have been more persuasive” than the other “alone cannot properly establish [that those] opinions should have put Realtime on notice that its arguments regarding the asserted claims were so without merit as to amount to an exceptional case.”

Accordingly, the Federal Circuit agreed that prior decisions concerning one of the two patents were relevant and others were not. Because the district court did not provide any analysis about how it had weighed these factors, the Federal Circuit remanded the case for further consideration in light of its opinion.

The full opinion can be found here.

By Nika Aldrich

This article summarizes aspects of the law and does not constitute legal advice. For legal advice for your situation, you should contact an attorney.