`Case 3:20-cv-00603-MMD-CLB Document 74 Filed 03/02/22 Page 1 of 8
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`UNITED STATES DISTRICT COURT
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`DISTRICT OF NEVADA
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`* * *
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`NEXRF CORP.,
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`v.
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`PLAYTIKA LTD., et al.,
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`Plaintiff,
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`Defendants.
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`Case No. 3:20-cv-00603-MMD-CLB
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`ORDER
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`I.
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`SUMMARY
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`Plaintiff NEXREF Corp. sued Defendants Playtika Ltd., Playtika Holding Corp.
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`(collectively, “Playtika”) and Caesars Interactive Entertainment (“Caesars”) for allegedly
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`infringing five patents1 by offering online slot machine games. (ECF No. 1.) The Court
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`granted Defendants’ motions to dismiss because the asserted patents are invalid under
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`Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014), and its progeny. (ECF No. 58
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`(“Alice Order”).)2 Before the Court is Playtika’s motion for attorneys’ fees (ECF No. 62
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`(“Motion”))3 and two related motions to seal certain exhibits to the Motion (ECF Nos. 63,
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`72, 73).4 Because, considering the totality of the circumstances, the Court does not find
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`1The five patents are U.S. Patent Nos. 8,747,229 (the ’229 patent), 8,506,406 (the
`’406 patent), 9,646,454 (the ’454 patent), 8,506,407 (the ’407 patent), and 9,373,116 (the
`’116 patent) (collectively, the “asserted patents”). (ECF No. 1 at 1.)
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`2Plaintiff appealed this order (ECF No. 60), and that appeal is currently pending.
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`3Plaintiff filed a response (ECF No. 68) and Playtika filed a reply (ECF No. 71).
`Playtika requested oral argument (ECF Nos. 62 at 1, 71 at 1), but the Court denies the
`request as it finds oral argument unnecessary. See LR 78-1 (“All motions may be
`considered and decided with or without a hearing.”).
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`4In these motions, Playtika seeks to seal its attorneys’ billing records submitted in
`support of its Motion and corresponding reply as trade secrets because the records reveal
`their negotiated billing rates. ECF Nos. 72 and 73 are identical except that ECF No. 73
`has an unredacted exhibit attached to it. Thus, the Court treats ECF Nos. 72 and 73 as
`one motion. No other parties oppose any of these motions to seal. The Court grants both
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`Case 3:20-cv-00603-MMD-CLB Document 74 Filed 03/02/22 Page 2 of 8
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`this case stands out from others—and as further explained below—the Court will deny the
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`Motion.
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`II.
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`BACKGROUND
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`Plaintiff filed its Complaint in October 2020. (ECF No. 1.) The motions to dismiss
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`the Court ultimately granted in the Alice Order were the first motions filed in this case, in
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`February 2021. (ECF Nos. 26, 28.) Playtika concurrently filed a motion to stay the case
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`pending the outcome of the motions to dismiss (ECF No. 29) that United States Magistrate
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`Judge Carla L. Baldwin granted in early April 2021 (ECF No. 50).
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`Playtika filed a motion for Rule 11 sanctions against Plaintiff in early May 2021
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`(ECF No. 53) that the Court also denied in the Alice Order in July 2021 (ECF No. 58 at
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`18-20). The Court primarily denied Playtika’s motion for sanctions because “the Court has
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`not ruled on the merits of Playtika’s noninfringement arguments [raised in the sanctions
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`motion], instead agreeing with Defendants that this entire case is properly disposed of
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`under Alice and its progeny.” (Id. at 19-20.) The Motion followed shortly after the Alice
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`Order on July 21, 2021.
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`Plaintiff represents, and Playtika does not dispute, that this case was the first time
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`Plaintiff asserted the asserted patents. (ECF No. 68 at 7; see also ECF No. 71 (declining
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`to dispute this).) Plaintiff also proffered evidence that Playtika offered to settle this case
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`for $207,000—or the amount that it would cost Playtika to petition the United States Patent
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`and Trademark Office (“USPTO”) for inter partes review of the asserted patents—on May
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`11, 2021, or after Judge Baldwin granted the motion to stay but before the Court issued
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`the Alice Order. (ECF No. 68 at 7; see also ECF No. 68-1.) Plaintiff also states that it
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`reached a settlement in late June 2021 “with another infringer for several times Playtika’s
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`offer.” (ECF No. 68 at 8.)
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`motions (ECF Nos. 63, 72, 73) because it agrees with Playtika that these billing records
`“contain confidential negotiated billing rates which are generally not available to the public
`or competitors.” Nike, Inc. v. Fujian Jialaimeng Shoes Co., Case No. 2:17-cv-00516-GMN-
`GWF, 2020 WL 137382, at *3 (D. Nev. Jan. 13, 2020) (granting motion to seal under
`analogous circumstances).
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`Case 3:20-cv-00603-MMD-CLB Document 74 Filed 03/02/22 Page 3 of 8
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`III.
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`LEGAL STANDARD
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`Playtika claims it is entitled to reasonable attorneys’ fees as the prevailing party
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`under 35 U.S.C. § 285. (ECF No. 62.) Section 285 of the Patent Act allows for courts to
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`award reasonable fees to the prevailing party in “exceptional cases.” 35 U.S.C. § 285. In
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`Octane Fitness, LLC v. ICON Health & Fitness, Inc. (“Octane”), 572 U.S. 545 (2014), the
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`Supreme Court held that “an ‘exceptional case’ is simply one that stands out from others
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`with respect to the substantive strength of a party’s litigating position (considering both the
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`governing law and the facts of the case) or the unreasonable manner in which the case
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`was litigated.” Id. at 554. Octane further urges “[d]istrict courts [to] determine whether a
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`case is ‘exceptional’ in the case-by-case exercise of their discretion, considering the
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`totality of the circumstances.”5 Id. Furthermore, a party must prove its § 285 motion by a
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`preponderance of the evidence. Id. at 557. Thus, the Court must determine whether this
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`was an “exceptional case,” considering the totality of the circumstances under a
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`preponderance of the evidence standard, to determine whether Playtika has satisfied its
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`burden of showing it is entitled to recover its attorneys’ fees and expenses.
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`IV.
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`DISCUSSION
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`Contrary to Playtika’s arguments in its Motion, the Court does not find that this was
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`an exceptional case and will accordingly deny the Motion.6 To start, Playtika primarily
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`raises arguments that the Court has not previously ruled on to argue that this is an
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`exceptional case. (ECF No. 62 at 8-11 (arguing the Complaint was devoid of a factual
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`basis), 11-13 (arguing Plaintiff fabricated allegations of white labelling), 13-19 (arguing
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`5A nonexclusive list of factors that courts may consider consists of “frivolousness,
`motivation, objective unreasonableness (both in the factual and legal components of the
`case) and
`the need
`in particular circumstances
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`compensation and deterrence.” Id. at 554 n.6 (citations and internal quotes omitted).
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`6Plaintiff asks the Court to wait until the United States Court of Appeals for the
`Federal Circuit adjudicates its appeal to rule on the Motion, but the Court finds it
`appropriate to rule on the Motion now. (ECF No. 68 at 25.) “Although a notice of appeal
`has been filed, a district court in this circuit retains jurisdiction to rule upon a request for
`attorney fees.” League of Women Voters of California v. F.C.C., 751 F.2d 986, 990 (9th
`Cir. 1985) (citation omitted).
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`Plaintiff failed to conduct an adequate pre-suit investigation).) However, the Court declines
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`to address these arguments for the first time in the context of Playtika’s Motion.
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`The Federal Circuit has made it “abundantly clear that district courts have wide
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`latitude ‘to refuse to add to the burdens of litigation by opening up issues that have not
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`been litigated but are asserted as bases for a fee award.”’ Munchkin, Inc. v. Luv n’ Care,
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`Ltd., 960 F.3d 1373, 1378 (Fed. Cir. 2020) (citations omitted). Were the Court to add to
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`the burdens of this litigation by addressing for the first time the majority of the arguments
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`Playtika raises in its Motion, the Federal Circuit instructs that the Court would have to offer
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`“a fuller explanation of the court’s assessment of a litigant’s position” to support an award
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`of attorneys’ fees. Id. (citation omitted). The Court declines to do so here.
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`Fed. R. Civ. P. 1 instructs the Court that the Federal Rules of Civil Procedure should
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`“be construed, administered, and employed by the court and the parties to secure the just,
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`speedy, and inexpensive determination of every action and proceeding.” Id. The Court
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`followed this instruction by finding the asserted patents invalid in the Alice Order and
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`declining to address the noninfringement arguments raised for the first time in Playtika’s
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`Rule 11 motion—the Court went right to the dispositive Section 101 issue with the asserted
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`patents and resolved this case approximately 10 months after it was filed, and before
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`significant discovery occurred because Judge Baldwin granted Playtika’s motion to stay.
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`(ECF Nos. 50, 58.) Indeed, the Court views this case as an example of Alice working as
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`intended—Playtika was able to get an early and complete dismissal of this case on a
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`motion to dismiss.
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`Expanding this case by diving into Playtika’s arguments based upon grounds other
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`than Alice would undermine the efficiency and elegance of the resolution of this case the
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`Court has been able to achieve up to this point. It would also contravene the spirit of Rule
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`1, because finding this case exceptional based on most of the arguments raised in
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`Playtika’s Motion would require the Court to examine them for the first time and then rule
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`in Playtika’s favor. Said otherwise, the Court will not “conduct the trial it never had” in the
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`first instance on Playtika’s Motion—and Federal Circuit precedent does not require it to.
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`Spineology, Inc. v. Wright Med. Tech., Inc., 910 F.3d 1227, 1230 (Fed. Cir. 2018). Indeed,
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`if the Court did, the Court would be required to offer a ‘fuller explanation’ of whether and
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`why it agreed with Playtika’s arguments, taking more time, and further detracting from the
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`relatively efficient resolution of this case so far achieved. See Munchkin, 960 F.3d at 1378.
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`The Court accordingly declines to address three of the four grounds Playtika raises in its
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`Motion as to why this case is exceptional in the first instance in this order. (ECF No. 62 at
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`8-19.)
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`But Playtika also argues this case is exceptional because Plaintiff took a weak
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`Section 101 position contradicted by cases directly on point. (ECF No. 62 at 20-22.)
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`Plaintiff counters that the Court’s invalidity findings in the Alice Order do not require an
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`exceptional case finding, pointing both to Federal Circuit precedent and two of the Court’s
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`prior cases where the Court invalidated patents based on Alice and its progeny but then
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`declined to award attorneys’ fees. (ECF No. 68 at 21.) Plaintiff further argues it presented
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`reasonable Section 101 arguments and simply lost on them, which does not merit an
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`exceptional case designation in and of itself. (Id. at 21-25.) Plaintiff also attempts to
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`distinguish the cases Playtika relies on to argue Plaintiff’s Section 101 arguments were so
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`weak that this is an exceptional case. (Id.) On balance, the Court agrees with Plaintiff.
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`The unrebutted evidence before the Court suggests that this is the first case Plaintiff
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`ever filed to assert the asserted patents, Plaintiff only obtained one settlement from one
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`other alleged infringer, and Playtika made Plaintiff a non-nuisance value settlement even
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`after Judge Baldwin granted Playtika’s motion to stay. (Id. at 7-8.) Judge Baldwin took a
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`“preliminary peek” at the underlying motions to dismiss before granting Playtika’s motion
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`to stay, suggesting that Playtika had a strong Section 101 argument. (ECF No. 50 at 2
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`(issued April 7, 2021).) However, Playtika still offered Plaintiff $207,000 to settle the case
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`shortly thereafter. (ECF No. 68-1 at 2 (dated May 11, 2021).) The Court can reasonably
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`infer from this settlement offer—and its timing—that Playtika did not view this case as
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`frivolous and thus potentially exceptional until it achieved a full dismissal in the Alice Order.
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`More broadly, it does not appear that Plaintiff was engaged in a massive though
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`meritless litigation campaign based on the asserted patents. (ECF No. 68 at 7-8.) That
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`makes this case distinguishable from several of the cases Playtika relies on, specifically
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`My Health, Inc. v. ALR Techs., Inc., Case No. 216CV00535RWSRSP, 2017 WL 6512221,
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`at *1 (E.D. Tex. Dec. 19, 2017), report and recommendation adopted, Case No.
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`216CV00535RWSRSP, 2018 WL 11327219 (E.D. Tex. Nov. 30, 2018) (noting in pertinent
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`part that the plaintiff “filed a number of patent infringement lawsuits”), Edekka LLC v.
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`3balls.com, Inc., Case No. 2:15-CV-541 JRG, 2015 WL 9225038, at *1 (E.D. Tex. Dec.
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`17, 2015) (noting that the plaintiff, “a non-practicing entity based in Plano, Texas, has sued
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`a large number of defendants in this Court”), and Cellspin Soft, Inc. v. Fitbit, Inc., Case
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`No. 4:17-CV-5928-YGR, 2018 WL 3328164, at *1 (N.D. Cal. July 6, 2018) (“Cellspin
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`brought fourteen patent infringement actions”), vacated and remanded, 927 F.3d 1306
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`(Fed. Cir. 2019) (reversing grant of motions to dismiss on Alice grounds). (ECF No. 62 at
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`20-22 (citing these cases).) The Court accordingly finds that these nonbinding cases do
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`not persuade the Court to find this case exceptional. This case lacks the litigation
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`misconduct and trolling behavior on Plaintiff’s part that sometimes causes courts to
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`designate cases exceptional after dismissing them on Alice grounds.
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`There is also no dispute that this case was resolved quickly before much discovery,
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`claim construction proceedings, summary judgment briefing, or trial. Plaintiff did not persist
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`in maintaining unreasonable positions after unfavorable rulings, needlessly complicate this
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`case, or vexatiously file many frivolous motions. Plaintiff simply lost an early set of Alice
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`motions. These facts also tend to weigh against finding this case exceptional.
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`That leaves two other cases upon which Playtika relies: Inventor Holdings, LLC v.
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`Bed Bath & Beyond, Inc., 876 F.3d 1372 (2017)7 and Planet Bingo, LLC v. VKGS LLC,
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`7This case is nonetheless distinguishable from Inventor Holdings because Playtika
`secured a quick dismissal before beginning discovery or claim construction proceedings,
`unlike Bed, Bath, and Beyond in Inventor Holdings, and this entire case significantly
`postdated Alice, whereas the key issue in Inventor Holdings was that the plaintiff did not
`reassess its litigation positions after Alice issued. See 876 F.3d at 1377-80.
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`576 F. App’x 1005, 1007-08 (Fed. Cir. 2014). (ECF No. 62 at 20-21.) Both of these cases
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`no doubt support Playtika’s argument that Plaintiff’s Section 101 arguments were
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`objectively weak. And as the Court noted in the Alice Order, Plaintiff’s decision not to
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`address Planet Bingo when it responded to the motions to dismiss suggests that Plaintiff
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`knew there was a chance the Court would invalidate the asserted patents under Alice and
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`its progeny. (ECF No. 58 at 9.) However, while Plaintiff’s Section 101 arguments were
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`weak, the Court does not find that Plaintiff was clearly on notice its claims were frivolous.
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`See Stone Basket Innovations, LLC v. Cook Med. LLC, 892 F.3d 1175, 1181 (Fed. Cir.
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`2018) (holding that a district court may deny attorneys’ fees where a losing party was not
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`on “clear notice” that their claims were meritless). As Plaintiff argues, it focused on
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`technical improvements contained within the asserted patents that Plaintiff now contends
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`rendered Planet Bingo distinguishable. (ECF No. 68 at 21-22.) And while the Court of
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`course ultimately disagreed with Plaintiff in the Alice Order, Plaintiff’s Section 101
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`arguments were not clearly frivolous.
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`In sum, and mindful that fee awards are not to be used as a “penalty for failure to
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`win a patent infringement suit[,] see Octane, 572 U.S. at 548, the Court does not find that
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`this case stands out from others based on the objective weakness of Plaintiff’s Section
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`101 positions. Plaintiff simply asserted the asserted patents for the first time in this case
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`and quickly lost—as it should have for the reasons provided in the Alice Order. Thus, the
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`Court does not find that this is an exceptional case. See id. at 554 (providing applicable
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`standard). The Court accordingly denies the Motion.
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`V.
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`CONCLUSION
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`The Court notes that the parties made several arguments and cited to several cases
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`not discussed above. The Court has reviewed these arguments and cases and determines
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`that they do not warrant discussion here as they do not affect the outcome of the Motion.
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`It is therefore ordered that Defendants Playtika Holding Corp. and Playtika Ltd.’s
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`motion for exceptional case finding and attorneys’ fees (ECF No. 62) is denied.
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`Case 3:20-cv-00603-MMD-CLB Document 74 Filed 03/02/22 Page 8 of 8
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`It is further ordered that Defendants Playtika Holding Corp. and Playtika Ltd.’s
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`motions to seal (ECF No. 63, 72, 73) are granted.
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`DATED THIS 2nd Day of March 2022.
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`MIRANDA M. DU
`CHIEF UNITED STATES DISTRICT JUDGE
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