`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLORADO
`REALTIME ADAPTIVE STREAMING, LLC
`CIVIL ACTION NO. 1:17-CV-02097
`
`Plaintiff,
`
`v.
`
`SLING TV L.L.C., et al.
`PATENT CASE
`Defendants.
`DEFENDANTS’ MOTION TO FIND THIS CASE EXCEPTIONAL
`UNDER 35 U.S.C. § 285 AND FOR FEE SHIFTING OF ATTORNEYS’ FEES
`
`
`
`
`
`
`I.
`
`INTRODUCTION
`
`Pursuant to Federal Rule of Civil Procedure 54(d)(2) and 35 U.S.C. § 285, Defendants—
`
`the prevailing parties—respectfully request this Court: (1) find this case to be exceptional; and (2)
`
`award Defendants their attorney fees incurred litigating this case after the stay was lifted, in the
`
`amount of $5,075,519.1
`
`Throughout this case, Defendants steadfastly maintained that the asserted claims of the
`
`’610 patent are invalid for claiming ineligible subject matter. Realtime’s refusal to re-evaluate its
`
`claims when Realtime knew or should have known of the eligibility problem with the ’610 patent
`
`significantly increased Defendants’ costs. Thus, this Court should find this case exceptional and
`
`order fee shifting, just like the Central District of California did in Realtime’s case against Netflix.
`
`II.
`
`FACTS AND TIMELINE
`
`On December 6, 2017, Defendants moved to dismiss the amended complaint, Dkt. No. 32,
`
`for claims covering patent-ineligible subject matter. Dkt. 47 at 1. Specifically, Defendants argued,
`
`“Realtime’s asserted patents claim the well-known and abstract concept of selecting a compression
`
`scheme based on characteristics of the data being compressed.” Id. at 2. During the hearing, the
`
`
`
`1 Defendants provide a “fair estimate” of the amount sought. Rule 54(d)(2)(B)(iii). This motion is
`supported with affidavits (Exs. 1, 2), “a summary of relevant qualifications and experience” for
`each person for whom fees are claimed, “a detailed description of the services rendered, the amount
`of time spent, the hourly rate charged, and the total amount claimed.” D.C.COLO.LCivR 54.3.
`
`
`
`Case 1:17-cv-02097-RBJ Document 308 Filed 08/13/21 USDC Colorado Page 2 of 15
`
`Court expressed doubts about the eligibility of the ’610 patent:
`
`Maybe this is just an abstract concept. This doesn’t sound like something you
`would patent. It doesn’t sound like its technology. It just sounds like an idea.
`
`
`Mar. 7, 2018 Hrg. Tr. at 9:9-14. At Realtime’s urging, the Court chose to perform claim
`
`construction before deciding eligibility. Id. at 14:14-15 (“[W]e need to get these terms defined
`
`and then see where we are.”) The Court construed claim terms, including the term “throughput of
`
`a communication channel,” on January 11, 2019, Dkt. 151, and stayed the case shortly thereafter
`
`for inter partes review (which cannot decide § 101 issues). Dkts. 162, 167.
`
`Concurrently, two other district courts held that Realtime’s nearly identical claims from
`
`the ’535 patent were unpatentable under § 101. Realtime Adaptive Streaming, LLC (“RAS”) v.
`
`Google, LLC, No. 2:18-cv-03629, Dkt. 36 (C.D. Cal. Oct. 25, 2018); RAS v. Netflix, Inc., No. 17-
`
`1692, Dkt. 48 (D. Del. Dec. 12, 2018) (“Netflix”) (report & recommendation). In addition, the
`
`Federal Circuit also held that selecting a compression technique and converting data between
`
`formats are patent-ineligible abstract ideas. Adaptive Streaming Inc. v. Netflix, Inc., 836 F. App’x
`
`900, 901 (Fed. Cir. 2020).
`
`At Realtime’s urging, the Court lifted the stay on January 15, 2021. Dkt. 179. Shortly
`
`thereafter, Defendants wrote to Realtime’s counsel to “place Realtime and its counsel on notice
`
`regarding the significant financial liability that Realtime and its counsel face [including under] 35
`
`U.S.C. § 285, if Realtime continues to pursue this meritless litigation.” Ex. 3 at 1. In the letter,
`
`Defendants highlighted the baselessness of asserting the ’610 patent. Id. Defendants explained
`
`that in “both the District of Delaware and the Central District of California, numerous claims of
`
`the ’535 patent—the parent patent to the ’610 patent—were held patent ineligible under 35 U.S.C.
`
`§ 101” and that “[e]ven a casual comparison of the ’610 patent asserted claims to the now invalid
`
`
`
`2
`
`
`
`Case 1:17-cv-02097-RBJ Document 308 Filed 08/13/21 USDC Colorado Page 3 of 15
`
`claims of the ’535 patent reveals that the ’610 asserted claims are likely to suffer the same
`
`ineligibility finding.” Id. at 4. Defendants also explained that the Federal Circuit’s Adaptive
`
`Streaming opinion showed “there can be no objective basis for continuing to litigate [the ’610
`
`patent] against Defendants . . . .” Id.
`
`Realtime brushed off Defendants’ letter, seeking to justify its claims by mischaracterizing
`
`the record and case law. Ex. 4. Realtime stated that “DISH moved to dismiss under § 101 and the
`
`Court denied that motion. Thus, you are threatening fees on an issue DISH lost on.” Id. at 1. In
`
`fact, as discussed above, the Court merely accepted Realtime’s request to decide the issue after
`
`claim construction. Realtime also claimed that “contrary to your false assertion—the Central
`
`District of California issued an order upholding the patent-eligibility of the related ’535, ’046, and
`
`’477 patents [which] strongly supports the validity of the ’610 patent.” Id. at 5. But as Defendants
`
`wrote to Realtime, see id. at 4, and as the Court later agreed in its order granting summary
`
`judgment, Dkt. 305 at 11–12, Realtime’s position was unsupported.
`
`Realtime’s response also dodged Defendants’ warnings about the Netflix and Adaptive
`
`Streaming opinions, asserting that Defendants “resort to misdirection by pointing to wholly
`
`unrelated cases not involving patents/claims conceived by the Realtime inventors.” Ex. 4 at 6.
`
`However, these cases strongly evidenced that the ’610 patent was ineligible. See Dkt. 305 at 4.
`
`Realtime’s blind pursuit of its claims—despite all indications they were baseless—forced
`
`Defendants to expend millions of dollars defending themselves from a case Realtime should have
`
`dropped before asking to lift the stay. Following discovery, Defendants filed for summary
`
`judgment that the ’610 patent was ineligible, relying on the same arguments Defendants informed
`
`Realtime about months earlier. Dkt. 234. The Court granted Defendants’ motion, finding that “as
`
`
`
`3
`
`
`
`Case 1:17-cv-02097-RBJ Document 308 Filed 08/13/21 USDC Colorado Page 4 of 15
`
`in the Adaptive Streaming, Google, and Netflix cases, . . . the plaintiff has not come forward with
`
`evidence that shows a genuine dispute about a fact that is material to the resolution of the case.”
`
`Dkt. 305 at 14. The Court explained that “Realtime focuses primarily on the term ‘throughput of
`
`a communication channel’ but that “[t]he absence of implementation details is evident on the face
`
`of the patent” and that Realtime did “not come forward with any evidence that raises a genuine
`
`dispute of material fact about whether consideration of the number of pending transmission
`
`requests was a new or inventive concept.” Id. at 10, 14. The Court further recognized that several
`
`of Realtime’s arguments were “conclusory” or “missing [] an explanation.” Id. at 12.
`
`A timeline of events relevant to this motion is illustrated below:
`
`
`III. LEGAL STANDARD
`35 U.S.C. § 285 instructs that “[t]he court in exceptional cases may award reasonable
`
`
`
`attorney fees to the prevailing party.” Courts determine if a case is exceptional on a case-by-case
`
`basis considering the totality of the circumstances. Octane Fitness, LLC v. ICON Health &
`
`Fitness, Inc., 572 U.S. 545, 554 (2014). There is “no precise rule or formula for” determining
`
`whether a case is exceptional. Biax Corp. v. Nvidia Corp., 626 Fed. App’x 968, 970-71 (Fed. Cir.
`
`
`
`4
`
`
`
`Case 1:17-cv-02097-RBJ Document 308 Filed 08/13/21 USDC Colorado Page 5 of 15
`
`2015) (citing Octane Fitness, 572 U.S. at 554). Instead, an exceptional case is one that “stands
`
`out from others with respect to the substantive strength of a party’s litigating position . . . or the
`
`unreasonable manner in which the case was litigated.” Id. Post-Octane Fitness, courts routinely
`
`award attorneys’ fees where the asserted patent clearly lacked subject matter eligibility. See
`
`Inventor Holdings, LLC v. Bed Bath & Beyond, Inc., 876 F.3d 1372, 1379 (Fed. Cir. 2017)
`
`(affirming fees where there was “no uncertainty or difficulty in applying the principles set out in
`
`Alice to reach the conclusion that the [] patent’s claims are ineligible”).
`
`IV. ARGUMENT
`
`Realtime’s unreasonable litigation strategy, coupled with its exceptionally weak merits
`
`positions, make this case exceptional. While Realtime’s claims were always flawed, its claims
`
`became untenable before Realtime requested the stay be lifted. Further, Realtime’s litigation
`
`conduct needlessly prolonged and multiplied the proceedings at great expense to Defendants.
`
`Defendants are the prevailing party, Dkt. 305 (“[a]s the prevailing party defendant is awarded . . .
`
`costs”), and Realtime’s conduct leaves no doubt this case is exceptional.
`
`A. Realtime’s Claims Were Exceptionally Weak
`1. Realtime’s Arguments Were Untenable In Light of the Cases Holding the
`Related ’535 Patent Claims Ineligible
`
`Realtime’s claims have always been exceptionally weak, but the weakness of its claims
`
`became abundantly clear before Realtime demanded that the Court lift the stay, in spite of the
`
`pending reexamination and substantial new question of patentability declared by the Patent Office.
`
`The law requires that a plaintiff reevaluate its case at all stages to avoid needless waste of
`
`resources. See Highmark, 572 U.S. at 561; see also Highmark, Inc. v. Allcare Health Mgmt. Sys.,
`
`Inc., No. 4:03-CV-1384, 2015 WL 6777377, at *2 (N.D. Tex. June 23, 2015) (reaffirming on
`
`
`
`5
`
`
`
`Case 1:17-cv-02097-RBJ Document 308 Filed 08/13/21 USDC Colorado Page 6 of 15
`
`remand that a case was exceptional in part because the losing party “maintained its infringement
`
`claims well after such claims had been shown by its own experts to be without merit and for the
`
`express purpose of maintaining leverage”). In particular, a plaintiff must withdraw its case when
`
`arguments as to the asserted patent’s eligibility are “especially weak” based on decisions finding
`
`related patents ineligible. Ameranth, Inc. v. Domino’s Pizza, Inc., No. 12CV0733, 2021 WL
`
`409725, at *4 (S.D. Cal. Feb. 5, 2021), reconsideration denied, 2021 WL 1853553 (S.D. Cal. May
`
`10, 2021). If the plaintiff fails to do so, as Realtime did here, the case is exceptional.
`
`In Ameranth, the Court agreed that the plaintiff’s “litigation position on the validity of the
`
`[asserted] [p]atent was especially weak after” related patents were held invalid for claiming
`
`ineligible subject matter. 2021 WL 409725, at *4 (discussing Apple, Inc. v. Ameranth, Inc., 842
`
`F.3d 1229, 1245 (Fed. Cir. 2016)). The court reasoned that after the determination invalidating
`
`the related patents under § 101, “no reasonable patent litigant would have believed the claims in
`
`the related patent were viable.” Id. at *6. The Ameranth court cited with favor a different court’s
`
`exceptional case finding on similar facts involving an earlier patent ineligibility ruling on a related
`
`patent. See Kindred Studio Illustration & Design, LLC v. Elec. Commc’n Tech., LLC, No. 2:18-
`
`CV-07661, 2019 WL 3064112, at *9 (C.D. Cal. May 23, 2019).
`
`As in Ameranth and Kindred, Realtime’s litigation position on the validity of the ’610
`
`patent was especially weak at the time that Realtime urged the Court to lift the stay in this case.
`
`Two separate courts determined that certain claims of Realtime’s related ’535 patent were
`
`ineligible (and, as discussed in the next subsection, the Federal Circuit found nearly identical
`
`technology to be unpatentable). Yet Realtime never properly reevaluated its ’610 patent claims in
`
`light of these holdings. If it had, it would have determined it could not reasonably argue that the
`
`
`
`6
`
`
`
`Case 1:17-cv-02097-RBJ Document 308 Filed 08/13/21 USDC Colorado Page 7 of 15
`
`asserted ’610 patent claims covered patent eligible subject matter.
`
`Instead of taking a careful look at the validity of the ’610 patent, when Defendants’ § 285
`
`letter first raised these (and the Federal Circuit’s) ineligibility findings with Realtime, it responded
`
`with misdirection (largely repeated in opposition to Defendants’ summary judgment motion).
`
`First, Realtime asserted that this Court ruled at the motion to dismiss stage that the ’610
`
`patent covered patent eligible subject matter. Ex. 4 at 1. However, as Realtime knew, the Court
`
`merely deferred eligibility consideration until after claim construction, at Realtime’s urging. See
`
`Ex. 5 (Mar. 7, 2018 Hrg. Tr.) at 14:12-15 (“The Court at this point very early in the case is satisfied
`
`with the merits of Judge Schroeder’s view, and that is we need to get these terms defined and then
`
`see where we are.”). And when it came, the claim construction decision did nothing to save
`
`Realtime’s claims. “[A]n infringement lawsuit which was substantively weak when it was filed
`
`can become exceptional when claim construction renders the claims therein baseless.” Innovation
`
`Scis., LLC v. Amazon.com, Inc., No. 1:16-CV-00861, 2020 WL 4934272, at *2 (E.D. Va. Feb. 18,
`
`2020), aff'd, 842 F. App’x 555 (Fed. Cir. 2021). The court in Innovation explained: “the Markman
`
`order notified Innovation that the [patent-in-suit] was legally insufficient” because claim
`
`construction “caused the patent to claim a result without claiming either ‘any new or improved
`
`technology for achieving the result’ and without explaining ‘how’ the result is accomplished.” Id.
`
`Here, as in Innovation, claim construction confirmed Realtime’s claims were “baseless” and
`
`continued litigation was “unreasonable.” See id.; see also Dkt. 151 at 2. Specifically, the claim
`
`construction order simply confirmed Defendants’ position that the ’610 patent is directed to the
`
`abstract idea of selecting a compression method. See Dkt. 151 at 2. In essence, the claim
`
`construction process that Realtime so fervently urged as a basis for denying Defendants’ motion
`
`
`
`7
`
`
`
`Case 1:17-cv-02097-RBJ Document 308 Filed 08/13/21 USDC Colorado Page 8 of 15
`
`to dismiss for lack of patent eligibility resulted in no change to the eligibility status of the asserted
`
`claims. Likewise, this Court found in the summary judgment order that “[m]ost importantly,
`
`neither the claim nor the reference to the [construed] term “throughput of the communication
`
`channel” in the Specification explains how the system tracks the number of pending transmission
`
`requests to determine throughput of the communication channel.” Dkt. 305 at 11.
`
`Second, Realtime argued that the Google court’s holding “strongly supports the validity of
`
`the ’610 patent.” Ex. 4 at 5. However, as the Court explained, Realtime’s attempt to rely on
`
`“throughput of a communication channel” in the ’610 patent was a distinction without a difference
`
`and Realtime’s argument that “the ’610 patent’s claims are more like the claims in Realtime’s ’046
`
`and ’477 patents and claims 1-14 of the ’535 patent that were not dismissed” was nothing more
`
`than a “conclusory statement.” Dkt. 305 at 11, 12.
`
`Third, Realtime did not even bother distinguishing Netflix when it responded to
`
`Defendants’ letter. As the Court noted in its order, Realtime’s attempt to discredit Netflix as
`
`incorrect was based on “a conclusory statement that lacks explanation.” Dkt. 305 at 12.
`
`In sum, Realtime’s failure to reasonably reevaluate its case in light of Google and Netflix
`
`renders this case exceptional.
`
`2. Realtime’s Arguments Were Untenable In Light of the Federal Circuit’s
`Adaptive Streaming Opinion and Similar Cases Holding Encoding and
`Compression Claims Ineligible
`
`There is more. In addition to analyzing decisions impacting related patents, plaintiffs must
`
`also assess the law as to unrelated but analogous claims to determine whether it can reasonably
`
`maintain its patent eligibility arguments. See My Health, Inc. v. ALR Techs., Inc., 2017 WL
`
`6512221, at *4 (E.D. Tex. Dec. 19, 2017). For example, in My Health, Inc., the court found a case
`
`
`
`8
`
`
`
`Case 1:17-cv-02097-RBJ Document 308 Filed 08/13/21 USDC Colorado Page 9 of 15
`
`exceptional where claims similar to those asserted here “ha[d] universally been found to be
`
`unpatentable under Alice.” Id. The court explained that “[b]y the time [the plaintiff] filed its 2016
`
`lawsuits, guidance from the Federal Circuit regarding claims in this category had mounted to a
`
`level that would give any litigant a reasonably clear view of § 101’s boundaries.” Id.
`
`As in My Health, after the stay was lifted, Realtime faced “numerous cases invalidating
`
`claims directed to” data encoding and compression, including the Federal Circuit’s Adaptive
`
`Streaming opinion, which should have led Realtime to withdraw its case. Defendants’ letter to
`
`Realtime put it on notice of Adaptive Streaming. See Dkt. 234 at 8–9. Adaptive Streaming collects
`
`case law holding that data encoding and compression are ineligible for patenting as abstract ideas.
`
`Id. In response, Realtime deflected, arguing that Adaptive Streaming was irrelevant because it was
`
`a “wholly unrelated case” and did not involve “patents/claims conceived by the Realtime
`
`inventors.” Ex. 4 at 6; see also Dkt. 267 at 12.
`
`Turning back to My Health, that court further noted that “numerous cases invalidating
`
`claims directed to information collection and analysis, such as the [asserted] patent claims, stood
`
`in stark contrast to” cases like Enfish, LLC v. Microsoft Corporation, 822 F.3d 1327 (Fed. Cir.
`
`2016), which found a “‘specific improvement to the way computers operate’ patent-eligible.” Id.
`
`Again, like in My Health, the law Realtime faced clearly delineated ineligible claims directed to
`
`encoding and compression—like the ’610 patent—from computer-improvement claims allowed
`
`under Enfish. Thus, Realtime could not reasonably distinguish the ’610 patent claims.
`
`Realtime’s attempts to avoid Adaptive Streaming because it was non-precedential cannot
`
`save it from exceptionality. Dkt. 305 at 6. As the Court noted, Adaptive Streaming is persuasive
`
`authority and Realtime pointed to no reason why it could not inform an eligibility analysis,
`
`
`
`9
`
`
`
`Case 1:17-cv-02097-RBJ Document 308 Filed 08/13/21 USDC Colorado Page 10 of 15
`
`especially since it relies upon prior decisions holding encoding and compression claims ineligible.
`
`Id; see also My Health, No. 216CV535, 2017 WL 6512221, at *4 (E.D. Tex. Dec. 19, 2017) (citing
`
`SmartGene, Inc. v. Adv. Biological Labs., 555 Fed. Appx. 950 (Fed. Cir. 2014) (“[a]lthough
`
`SmartGene was an unpublished opinion, it was representative of numerous precedential opinions.
`
`. . .”). As the My Health court held for the Federal Circuit’s non-precedential SmartGene opinion,
`
`the fact that Adaptive Streaming is non-precedential cannot avoid an exceptionality finding.
`
`In sum, this case is exceptional because when the stay was lifted there was “no uncertainty
`
`or difficulty in applying the principles set out in Alice to reach the conclusion that the [’610]
`
`patent’s claims are ineligible.” Inventor Holdings, 876 F.3d at 1379.
`
`B. The Need for Deterrence Is High
`
`A grant of fees here is also necessary “to advance considerations of . . . deterrence.” Octane
`
`Fitness, 572 U.S. at 554, n.6; see also Commil USA, LLC v. Cisco Sys., Inc., 575 U.S. 632, 647
`
`(2015) (section 285 “safeguards” against litigants that “use patents as a sword to go after
`
`defendants for money, even when their claims are frivolous.”).
`
`1. There Is a Need to Deter Realtime from Pursuing Wasteful Litigation
`
`An exceptional case finding will deter Realtime from pursuing baseless claims in future
`
`cases. Realtime is a serial litigant. A search of Realtime Adaptive Streaming L.L.C. and its
`
`affiliate Realtime Data L.L.C. reveals 145 dockets identifying them as plaintiffs. Ex. 6. In
`
`addition, Realtime is a sophisticated, patent-attorney-run litigant that routinely works in concert
`
`with the Russ August & Kabat firm to monetize patents. For example, attorney Gerald Padian
`
`runs Realtime as well as other similar patent assertion entities. See Ex. 7 (press release regarding
`
`Solas OLED patent assertion entity); see also Ex. 8 (Padian LinkedIn Profile). Thus, Realtime
`
`
`
`10
`
`
`
`Case 1:17-cv-02097-RBJ Document 308 Filed 08/13/21 USDC Colorado Page 11 of 15
`
`cannot excuse its egregious behavior in this case by feigning ignorance of the law.
`
`The core of Realtime’s business model is licensing patents. Realtime brings litigation in
`
`federal courts (typically without pre-suit licensing discussions), and attempts to extract settlements
`
`through the risk of exorbitant damages awards. In this case, it sought $42 million dollars in
`
`damages (including damages periods when the Accused Products were unquestionably licensed).
`
`It also leveraged litigation costs imposed upon the Defendants to incentivize taking a license to
`
`the ’610 patent. Realtime did so by making this litigation as complex and expensive as possible.
`
`Setting aside the fact that the wrong Realtime entity (Realtime Data) first sued the
`
`Defendants in Texas with patents it did not own, one way Realtime complicated this case was by
`
`refusing to disclose its legal theories or purposefully hiding them under mountains of contentions
`
`and expert reports. Realtime did so to increase the time necessary to respond—a tactic that was
`
`undoubtedly successful. Realtime also refused to disclose its damages case, including fundamental
`
`information required by Rule 26, such as “a computation of each category of damages” claimed
`
`by Realtime. Ex. 9 (Feb. 26, 2021 Hrg. Tr.) at 25:1-28:1; see also Fed. R. Civ. P. 26(a)(1)(A)(iii).
`
`Realtime’s behavior forced Defendants to raise the issue with the Court, which ruled that Realtime
`
`violated its discovery obligations and had to disclose its damages case that day. Id. at 27:15-25.
`
`Similarly, Realtime refused to narrow its case and maintained its twelve infringement
`
`claims for the duration despite assurances to this Court that it would reduce its claims. Ex. 10
`
`(July 16, 2021 Hrg. Tr.) at 18:12-21 (“I’m going to take your word for it that you will be responding
`
`promptly and fully to [Defendants’] invitation to try to reduce these claims”). The closest it came
`
`to reducing claims was an email to the Court on July 30, 2021 with excuses and suggestions that
`
`it might later identify claims for trial. Ex. 11 (“Realtime has been discussing this latest proposal
`
`
`
`11
`
`
`
`Case 1:17-cv-02097-RBJ Document 308 Filed 08/13/21 USDC Colorado Page 12 of 15
`
`internally and expects to respond today.”). Still, it never identified the subset of claims it would
`
`pursue at trial, forcing Defendants to prepare for trial against every claim raised in the case.
`
`A third way Realtime drove up costs to incentivize taking a license over defending from
`
`the claims on the merits was by serving over 600 pages of infringement claim charts and refusing
`
`to explain whether its case was based on direct infringement or one of various indirect liability
`
`theories. Indeed, even at the trial preparation conference, Realtime could not commit. Id. at 29:13-
`
`30 (“You’re going to have to figure out how you think they really did infringe. Was it direct
`
`infringement? Was it equivalence? Was it something else?”). In fact, despite representing to the
`
`Court its contentions were complete, Realtime waited until its 431-page infringement expert report
`
`to disclose two additional infringement theories. Here again, Realtime forced Defendants to spend
`
`significant sums to defend against the late-disclosed infringement theories with additional
`
`deposition time, further rebuttal expert opinions, and significant legal vetting—efforts culminating
`
`in a motion to strike. Dkt. 242 at 1-4 (moving to strike Dr. Mitzenmacher’s previously-undisclosed
`
`infringement theories and quoting the February 26, 2021 hearing).
`
`A fourth way Realtime drove up costs was by claiming damages for time when EchoStar,
`
`then a DISH vendor, owned the accused functionality. Dkt. 240 at 11-13. EchoStar took a license
`
`in 2019, yet Realtime still demanded damages—from DISH—for EchoStar’s period of ownership.
`
`Id. Realtime sought to use the anvil of an overly-inflated $42 million damages claim to pressure
`
`Defendants into taking a license. Realtime’s tactics imposed significant unnecessary costs on
`
`Defendants to prepare its license and exhaustion defense theories for the bench trial.
`
`In fact, this litigation is not the first time Realtime’s conduct has merited attorneys’ fees.
`
`On November 23, 2020—shortly before this Court lifted the stay—the Central District of
`
`
`
`12
`
`
`
`Case 1:17-cv-02097-RBJ Document 308 Filed 08/13/21 USDC Colorado Page 13 of 15
`
`California held that Realtime’s conduct in the Netflix litigation was exceptional and shifted fees to
`
`Realtime. RAS v. Netflix, Inc., No. CV 19-6359, 2020 WL 7889048, *6 (C.D. Cal. Nov. 23, 2020)
`
`(“Whether Realtime knew or should have known that its claims were baseless . . . is . . . one which
`
`this Court would be inclined to find tips over into the baseless range.”).
`
`2. Plaintiffs Should be Deterred from Asserting Ineligible Patent Claims
`
`The need for deterrence is particularly applicable here, as fees would deter Realtime and
`
`future litigants from abusing the judicial system by improperly assuming that § 101 is so undefined
`
`or malleable that they can disregard strongly adverse case law and pursue meritless claims. Other
`
`courts recognize the need for deterrence where a plaintiff asserts claims that are clearly ineligible
`
`under § 101. For example, in Inventor Holdings, the Federal Circuit concluded that a district court
`
`“acted within the scope of its discretion in finding [the] case to be exceptional based on the
`
`weakness of [plaintiff’s] § 101 arguments and the need to deter similarly weak arguments in the
`
`future.” Inventor Holdings, 876 F.3d at 1377 (emphasis added). The Federal Circuit rejected the
`
`plaintiff’s excuse that “as a general matter that it was and is sometimes difficult to analyze patent
`
`eligibility under the [Supreme Court’s] framework” because “there [was] no uncertainty or
`
`difficulty in applying the principles set out in Alice” to the claims at issue. Id. at 1379.
`
`Here, like in Inventor Holdings, “there [was] no uncertainty or difficulty in applying the
`
`principals set out in Alice,” especially given the Google, Netflix, and Adaptive Streaming decisions.
`
`Id. An exceptional case finding would signal defendants to stand on their rights when facing
`
`meritless claims. Cf. Kirtsaeng v. John Wiley & Sons, 136 S. Ct. 1979, 1986 (2016) (“When a
`
`litigant . . . is clearly correct, the likelihood that he will recover fees from the opposing (i.e.,
`
`unreasonable) party gives him an incentive to litigate the case . . . .”). And like in eDekka, an
`
`
`
`13
`
`
`
`Case 1:17-cv-02097-RBJ Document 308 Filed 08/13/21 USDC Colorado Page 14 of 15
`
`exceptionality finding would encourage plaintiffs with litigation-based business models—like
`
`Realtime’s—to avoid advancing “insupportable arguments on behalf of an obviously weak
`
`patent,” while encouraging those plaintiffs to “engage[] in a reasonable and thorough . . .
`
`investigation regarding the § 101 standard and relevant authority” before and during a lawsuit.
`
`eDekka LLC v. 3balls.com, Inc., 2015 WL 9225038, at *2-4 (E.D. Tex. Dec. 17, 2015). Realtime
`
`cannot avail itself of the courts while eschewing its obligation to assess the viability of its claims.
`
`C. The Defendants’ Attorneys’ Fees Are Reasonable, Particularly in View of the
`Unreasonable Way in Which Realtime Litigated Its Claims
`
`Defendants reasonably and necessarily incurred the requested $5,075,519 in attorneys’ fees
`
`defending the case after the stay was lifted. Upon restarting, Defendants conducted effectively the
`
`entirety of fact discovery, including document review and drafting and responding to discovery
`
`requests. As detailed above, Realtime ensured that this was a time-consuming process by serving
`
`voluminous infringement claim charts and a 431-page opening infringement expert report.
`
`Defendants also defended eight depositions noticed by Realtime. In addition, Defendants
`
`completed expert discovery, including depositions. Moreover, Realtime sought damages of $42
`
`million, despite the weakness of its case, including time periods for which it was not entitled to
`
`damages based on failure to mark, and a clear-cut license defense. See Dkt. 240 at 11-15.
`
`Defendants pursued summary judgment, including their successful summary judgment
`
`motion regarding subject matter ineligibility. While summary judgment was pending, Defendants
`
`were required to prepare for trial for all twelve asserted claims, since Realtime failed to identify
`
`its narrower subset of claims for trial. Defendants also incurred fees to file and defend pretrial
`
`motions, prepare trial documents, draft outlines, prepare witnesses, and conduct a mock trial.
`
`Further, Defendants were required to prepare for a bench trial on the license issues detailed above.
`
`
`
`14
`
`
`
`Case 1:17-cv-02097-RBJ Document 308 Filed 08/13/21 USDC Colorado Page 15 of 15
`
`Finally, the Defendants only seek to shift fees incurred after the stay was lifted. Given the
`
`circumstances of this case, Defendants’ attorneys’ fees have been reasonable.
`
`V.
`
`CONCLUSION
`
`For the reasons stated, Defendants respectfully request that the Court declare this case
`
`exceptional and award Defendants their attorneys’ fees. While the fees incurred through July 2021
`
`are enumerated with this motion, additional fees are being incurred to prepare this motion and a
`
`likely reply. Should the Court find it helpful, Defendants respectfully request a hearing and would
`
`provide the Court with an updated accounting of fees incurred at that hearing.
`
`
`
`Respectfully submitted,
`
`
`
`
`
`
`
`
`
` Dated: August 13, 2021
`
`s/ Adam R. Shartzer
`Ruffin B. Cordell
`Adam R. Shartzer
`Brian J. Livedalen
`
`Hugh Q. Gottschalk
`
`FISH & RICHARDSON P.C.
`1000 Maine Ave. SW, Ste. 1000
`Washington, DC 20024
`PH: 202-783-5070
`
`Wheeler Trigg O’Donnell LLP
`370 Seventeenth Street, Suite 4500
`Denver, CO 80202
`
`Attorneys for Defendants DISH
`Network L.L.C., Sling TV L.L.C.,
`Sling Media L.L.C., and DISH
`Technologies L.L.C.
`
`
`CERTIFICATE OF COMPLIANCE: This motion/brief complies with: (1) the
`
`guidelines set forth in D.C.COLO.LCivR 54.3 and (2) the type-volume limitation of
`
`D.C.COLO.LPtR 17. This brief contains 4,549 words.
`
`CERTIFICATE OF SERVICE: I certify that on this 13th day of August, 2021, I
`
`electronically filed this with the Clerk of the Court using CM/ECF, which will serve all counsel.
`
`CERTIFICATE OF CONFERENCE: I certify that on August 12, 2021, counsel for the
`
`parties met and conferred regarding this motion and no agreement was reached on exceptionality.
`
`s/ Adam R. Shartzer
`
`
`
`15
`
`