Judge finds patent attorneys liable in sanctions order

A San Francisco federal judge has sanctioned plaintiffs' attorneys in a patent infringement lawsuit against Fitbit Inc.

U.S. District Judge Vince Chhabria wrote in the order last week that he will award Fitbit $223,000 in fees and the plaintiffs' attorneys will be on the hook if their client can't pay up.

Fitbit attorneys successfully argued that the plaintiff, Smart Wearable Technologies Inc., neglected to take basic steps to examine the evidence to determine if its claims were plausible and continued to pursue the litigation after attaining enough information to know it was frivolous. Smart Wearable Technologies Inc. v. Fitbit Inc., 17-CV5068 (N.D. Cal., filed Sept. 1, 2017).

"Fitbit sent Smart Wearable a letter in May 2017 putting Smart Wearable's lawyers on notice of why the accused devices did not infringe on the theories that Smart Wearable had asserted," the judge wrote.

"But even though Fitbit gave Smart Wearable a Fitbit engineer's declaration, an invitation to inspect the source code at Fitbit's offices, and the bill of materials for an accused device, Smart Wearable and its lawyers did not amend their infringement contentions (or even inspect the source code until much later)," he added.

Chhabria declined to grant Fitbit's full request for $355,000 in fees, "to account for the somewhat excessive billing associated with the motions for fees and sanctions."

The victorious defendant celebrated the order in an emailed statement: "Fitbit will aggressively defend itself against predatory patent trolls -- for ourselves and for the broader tech industry. This decision is a win for the entire industry in helping to curb the abuse of patent trolls."

Clement Roberts, a partner with Orrick, Herrington & Sutcliffe LLP who represents Fitbit, wrote in an email that his client should be lauded for refusing to settle frivolous claims.

"This case really shows the value of being up front with opposing counsel early in the case and I give Fitbit a ton of credit for sticking to its principles and being willing to go the distance, especially when you consider the number of companies that chose to settle these claims," he wrote.

Jonathan T. Suder, a partner with Texas-based Friedman, Suder & Cooke PC who represented the plaintiff, declined to comment.

The judge wrote that the plaintiff may have been able to contend it was unaware of the frivolous nature of the lawsuit early on in the litigation, but should have known after Fitbit explained at a case management conference in October that its technology couldn't possibly be used in the way that the plaintiff alleged.

"Smart Wearable failed to conduct an adequate investigation into the plausibility of its claims by refusing to do a tear-down of the devices -- even after being informed that the devices did not contain or use the sensors as Smart Wearable alleged," he wrote. "This issue came up multiple times during the litigation, yet at no point did Smart Wearable offer a meaningful explanation for its refusal to diligently investigate its claims."

The ruling is in line with comments Chhabria made at a hearing on the sanctions motion, characterizing the plaintiffs case as "one big, long, drawn-out, expensive, silly, word game."

Michael von Loewenfeldt, a partner with Kerr & Wagstaffe LLP who represented the plaintiff's attorneys in the sanctions motion, didn't respond to a request for comment.

At the hearing, Loewenfeldt asked Chhabria to avoid being overly punitive.

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