Judge leaning toward sanctions for patent aggregator who sued Fitbit

SAN FRANCISCO -- A federal judge said a company that lost a patent infringement lawsuit to Fitbit Inc. will very likely have to pony up for the fitness technology company's legal bills and the plaintiff's lawyers could be held liable if their client is unable to pay.

U.S. District Judge Vince Chhabria of San Francisco said at a hearing Thursday he was inclined to award fees for all legal work done by defense lawyers after a case management conference held in May 2017.

Chhabria said the plaintiff should have known its case was baseless by that point, if not earlier, before it devolved into "one big long drawn-out expensive silly word game."

The plaintiff's failed case involved allegations that Fitbit's fitness tracking devices infringed on decades-old patents. Smart Wearable Technologies Inc. v. Fitbit Inc., 17-CV5068 (N.D. Cal., filed Sept. 1, 2017).

A variety of companies that own patents related to outdated pedometers, which estimated the number of steps users took, have attempted to sue companies like Fitbit and Apple Inc. as their digital fitness devices have gained popularity.

The defendants in these cases have repeatedly claimed their digital devices accomplish the tasks of estimating steps or elevation gain through different methods. The defendants argue that even when their devices include gyroscopes or accelerometers, they are being used for different tasks and measurements than the plaintiffs' patents were intended to cover.

Apple asked U.S. District Judge Phyllis J. Hamilton of Oakland to issue sanctions and dismiss the complaint without leave to amend in an ongoing case brought by patent aggregator Uniloc USA Inc. at a hearing in April. Hamilton has not ruled on the motion. Uniloc USA Inc. et al. v. Apple Inc., 18-CV362 (N.D. Cal., filed Jan 17, 2018).

Chhabria told Smart Wearable Technologies' attorneys at the Fitbit hearing Thursday he was trying very hard to give them the benefit of the doubt, but the much more plausible explanation for their actions was they were operating in bad faith. The judge gave his account of what it looked like the plaintiff's thought process had been.

"We are going to persist as long as possible arguing in this case that the sky is green," he said. "Not until our contention is rejected will we turn to a contention that the sky is red."

Robert P. Greenspoon and William W. Flachsbart of Chicago-based intellectual property firm Flachsbart & Greenspoon LLC were the lead attorneys for the plaintiff.

Clement S. Roberts, a partner with Durie Tangri LLP, represented Fitbit.

The judge didn't rule from the bench but made it clear he was leaning strongly toward granting the request for fees and holding the plaintiff's attorneys liable if their client is unable to pay.

Chhabria said he was particularly incensed that the plaintiff hadn't done a basic teardown of the Fitbit products they were targeting, which could have revealed the product didn't work in the way its complaint alleged through very basic reverse engineering. The judge said the plaintiff instead insisted repeatedly on expensive discovery.

Michael von Loewenfeldt, a partner with Kerr & Wagstaffe LLP who represented the plaintiff's attorneys on the part of the motion asking them to pay up if their client cannot, asked the judge to avoid being overly punitive.

"Isn't that what rule 11 is about?" Chhabria responded. "Taking a pound of flesh from a wrongdoer and making sure other people who are similarly situated will act differently."