URC Awarded Substantial Legal Fees in Patent Case

Court Awards More Than $4.6 Million from a Failed Patent Infringement Action Filed by Universal Electronics Inc.
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The U.S. District Court for the Central District of California has awarded Universal Remote Control Inc. (URC) more than $4.6 million in requested attorney's fees and costs stemming from a failed patent infringement action filed by Universal Electronics, Inc. (UEI).

This litigation began in March 2012 when UEI accused URC of infringing four of UEI’s patents. Over the course of the proceedings, which concluded with a jury trial and verdict in URC’s favor on all issues tried, all of the claims that had been asserted against URC were dismissed on various and multiple grounds. In addition to the district court litigation, URC prevailed before the Patent Trademark & Appeal Board in an Inter Partes review proceeding (also called an "IPR") against one of UEI’s patents, which now has been held invalid by the Patent Office based on a publication already in the public domain at the time of that patent’s application. The net result is that all four of UEI’s asserted patents have been held either invalid, not infringed, unenforceable, and/or subject to no damages claims.

Following the success at the jury trial, URC asked the Court to declare this case “exceptional” under the patent law and award URC its attorney's fees and costs for its successful defense. On March 10, 2015, the Court granted URC’s fee request for those patent claims found exceptional. After further briefing on the exact amount of fees and costs at issue, on September 4, 2015, the Court awarded URC more than $4.6 million in fees and costs against UEI.

In its September 4 Order, the Court held that the fee award “is appropriate given the amount at stake, the complexity of the issues, and the fact that the resolution of certain issues reflected significant difficulties unnecessarily caused by Plaintiff [UEI].”

The Court further indicated that it had previously “determined, for example, that ‘this litigation was at least in part motivated by Plaintiff’s desire for ‘payback’ for Defendant’s successful competition in the marketplace,’ that Plaintiff failed to adequately review its own material concerning marking before filing suit, that it engaged in discovery gamesmanship to obscure such failing, and that Plaintiff engaged in ‘troubling’ conduct concerning a petition for correction of inventorship.” With regard to this “inventorship” issue, the Court had earlier ruled in March 2015 that “Plaintiff could not provide any corroboration of Darbee’s purported inventive contribution.” In this September 4 Order, the Court noted that the fees requested by URC “reflect[] adequate work that led to a favorable outcome for Defendant.”

The Court awarded more than $4.1 million in attorney's fees and more than $475,000 in expenses, for a total award of more than $4.6 million. Based on public information, this appears to be one of the most significant fee awards in a patent lawsuit since the U.S. Supreme Court clarified the standard for awarding such fees in the 2014 Octane case.