Google’s Motion for Attorneys’ Fees Denied on Appeal

Several years ago, iLOR, LLC, owner of U.S. Patent No. 7,206,839 ("'839 patent") for a method "for adding a user selectable function to a hyperlink," filed suit against Google claiming that the Google Notebook product infringed the '839 patent.[i] According to Claim 26 of the '839 patent, the method comprised a "toolbar being displayable based on a location of a cursor in relation to a hyperlink in a first page in a first window of an application."[ii] iLOR alleged that Google Notebook infringed the '839 patent because "the online application had a feature that allowed a user to right-click on a hyperlink while the cursor was positioned over that hyperlink," which "caused a toolbar to be displayed."[iii] However, Google argued that the "being displayed" limitation of the '839 patent narrowed that claim to only methods "where the toolbar was automatically displayed."[iv] The District Court agreed with Google's claim construction finding support in (1) the ordinary meaning of the claim language, (2) the specification, and (3) the prosecution history.[v] iLOR appealed the decision to the Federal Circuit, but the ruling was affirmed.[vi] Subsequently, Google moved for attorneys' fees, which the District Court granted.[vii] The District Court concluded that the case was objectively baseless, and that there was subjective bad faith on the part of iLOR.[viii] iLOR appealed that decision to the Federal Circuit, which recently issued its decision vacating the award of attorneys' fees.[ix]

According to the Federal Circuit, attorneys' fees can be awarded "if both (1) the litigation is brought in subjective bad faith, and (2) the litigation is objectively baseless."[x] Phrased another way, "the plaintiff's case must have no objective foundation, and the plaintiff must actually know this."[xi] However, contrary to the District Court's holding, the Federal Circuit did not find objective baselessness.[xii] Although iLOR's claim construction was broader and eventually rejected by both the District and Federal Courts, neither the claim language nor the specification clearly contradicts iLOR's construction.[xiii] Furthermore, in the prosecution history relied on by the District Court, a disclaiming statement regarding a prior art reference could have reasonably been argued to apply to a different claim other than Claim 26.[xiv] Therefore, even though rejected, iLOR "could reasonably argue for the claim construction that it proposed."[xv] Since iLOR could reasonably argue their claim construction, the suit was not objectively baseless.[xvi]

This case exemplifies the danger in bringing questionable patent infringement suits. Had iLOR lost on appeal, they would have had a judgment for attorneys' fees in the amount of $627,039.25 enforced against them.[xvii] However, perhaps even more damaging is that a narrow construction of iLOR's '839 patent has now been affirmed in court.