Fish & Richardson Wins Federal Circuit Affirmation of $1 Million in Attorneys' Fees for Bed Bath & Beyond in Patent Dispute

Fish & Richardson announced today that the Court of Appeals for the Federal Circuit affirmed a $932,000 attorneys' fees award for Fish's client Bed Bath & Beyond in a patent dispute with Inventor Holdings LLC. On December 8, 2017, the Federal Circuit held that the trial court was correct when it found that Inventor Holdings had pursued a meritless case against Bed Bath & Beyond and therefore must pay the company's attorneys' fees. This is the second win at the Federal Circuit for Bed Bath & Beyond in this lawsuit.

The case, Inventor Holdings LLC v. Bed Bath & Beyond Inc., dates back to April 2014 when Inventor Holdings sued Bed Bath & Beyond (and several other major retailers) in federal court in Delaware alleging infringement of U.S. Patent 6,381,582, which broadly covered methods, systems, and apparatuses for locally processing payments for remotely ordered goods. The claims of the patent were alleged to cover situations where an individual places an order for goods over the phone or the web but then pays for the goods at a local store. On June 19, 2014, the U.S. Supreme Court issued its landmark Alice decision, which held that abstract ideas implemented on a computer are not patent-eligible. In August 2015, the district court granted Fish's Section 101 invalidity motion, invalidating all the claims in the patent and dismissing the case; the Federal Circuit affirmed that decision on May 17, 2016. On May 31, 2016, Bed Bath & Beyond was awarded attorneys' fees under the exceptional case doctrine (from the date Alice was decided). The court found that Inventor Holdings should have known its case was not strong enough to proceed post-Alice and should have dropped the case.

The Fish appellate team representing Bed Bath & Beyond included Dallas principals David Conrad and Neil McNabnay and associate Ricardo Bonilla.

"We are thrilled to have helped Bed Bath & Beyond win on all fronts when confronted with a meritless claim for patent infringement," said Fish principal David Conrad, who argued the first appeal on the merits. This decision is also notable because it was successfully argued by a Fish associate, Ricardo Bonilla, as part of Fish's efforts to see that talented junior lawyers can demonstrate their skills in court.

"We are excited to recover fees incurred defending Inventor Holdings' baseless charge of infringement. Our client's in-house team had the courage to see this case through to the just end. All of the other defendants in the lawsuit took an early exit, but we were confident in our case from the very beginning and applaud our client for making the right strategic decisions every step of the way," said Bonilla.

In its opinion, the Federal Circuit approved of the district court's findings that Inventor Holdings' claims were "dubious even before the Alice decision" and that there was "the need to deter similarly weak arguments in the future." The opinion also said, "The '582 patent's alleged invention does not require us to engage in a difficult line-drawing exercise for a claimed invention resting on, or anywhere near, the margins of patent-eligibility; rather, the patent claims here are directed to a fundamental economic practice, which Alice made clear is, without more, outside the patent system."