For many technology companies, defending patent lawsuits initiated in the Eastern District of Texas by non-practicing entities (i.e., patent trolls) has unfortunately become just another cost of doing business.
Of course, many trolls know that is the case, hoping to secure a quick settlement that is substantial but still less than the cost of defending such lawsuits, which can easily exceed seven figures. That does not mean defendants should just roll over and pay, however. In fact, many times, an aggressive defense may be the best approach.
That is precisely how the Willenken team approached one of the latest lawsuits filed against its client, a technology company based in Orange County, California. A cursory review of the patent revealed many potential defenses, including an attack on whether the subject matter was even patentable and a failure to properly recite any structure. Most importantly, however, the plaintiff’s infringement analysis was based on a very tenuous claim construction.
For months, the plaintiff encouraged the firm’s client to accept a licensing agreement. Indeed, it provided a veritable Who’s Who of technology companies, including Apple, Adobe, and LG Electronics, that had already acceded. The firm’s client stood firm, however, refusing to negotiate at the plaintiff’s requested rates. It fired back with its own steadfast position, including a potential sanctions motion for taking an objectively baseless position on claim construction, as was the case in the recent Federal Circuit case, Raylon vs. Complus Data Innovations, Inc.
Shortly before the first scheduling conference, the plaintiff made a “final” offer, claiming it was as low as it could possibly go. When the firm’s client rejected that offer, the plaintiff reduced its offer and offered a new “final” offer. And so it went until, finally, the plaintiff’s offer was so low, there was no justification for the client to continue to spend money on attorneys’ fees. According to the plaintiff’s counsel, it was the lowest settlement payment to date.