Twitter, Inc. v. Voip-Pal.com, Inc.
- James Donato
- 3:20-cv-02397
- U.S. District Court · Northern District of California
- 3
In Twitter v. Voip-Pal.com, Judge Donato denied Twitter’s request for attorney’s fees as a bad-faith litigation sanction.
Twitter was denied attorney’s fees, and Voip-Pal.com was not sanctioned with a fee award.
What happened
Twitter asked the court for attorney’s fees after Voip-Pal.com agreed not to sue Twitter over a patent and the case was dismissed. The dismissal ended the court’s jurisdiction, but an earlier judge allowed Twitter to pursue a fee request.
Twitter relied on the court’s inherent power to sanction parties that litigate in bad faith. It did not rely on the federal rules and statutes that separately authorize some fee sanctions. Twitter argued that Voip-Pal.com’s conduct in this case and other patent cases justified an award.
Judge Donato denied the motion. He said Twitter was not entitled to fees under the patent fee statute because it had not obtained court-ordered relief or become a prevailing party. He also found that the circumstances did not justify a bad-faith sanction: Twitter received the covenant not to sue, Voip-Pal.com’s litigation losses did not by themselves establish bad faith, and Twitter had not shown that the patent was invalid or that Voip-Pal.com’s broader litigation history proved misconduct.
The detailed version
- Twitter, Inc. v. Voip-Pal.com, Inc. · No. 3:20-cv-02397
- James Donato
- July 1, 2022
Background
Twitter brought a patent action seeking a declaration that it did not infringe U.S. Patent No. 10,218,606, owned by Voip-Pal.com, Inc. The parties later executed a covenant not to sue, and another district judge dismissed the case because the covenant eliminated the court’s subject-matter jurisdiction. That judge nevertheless concluded that Twitter could file a motion for attorney’s fees. The fee motion and case were later reassigned to Judge James Donato.
Twitter’s fee request
Twitter did not seek fees under 35 U.S.C. § 285, the patent statute that allows a discretionary fee award to a prevailing party. The court explained that Twitter was not a prevailing party for purposes of that statute because its complaint had been dismissed and it had not obtained relief from the court.
Instead, Twitter sought fees as a sanction under the court’s inherent power to discipline litigation conducted in bad faith, such as conduct that is vexatious, wanton, or oppressive. Twitter did not rely on Federal Rule of Civil Procedure 11 or 28 U.S.C. § 1927, which provide separate grounds for fee sanctions. Twitter argued that Voip-Pal.com’s conduct in this case, its position concerning the patent’s validity, and incidents from other patent cases showed that sanctions were warranted.
Court’s analysis
Judge Donato stated that bad-faith fee sanctions are reserved for narrowly defined circumstances. The court emphasized that Twitter obtained what it wanted from Voip-Pal.com—a covenant not to sue—and appeared not to have paid consideration for it. Voip-Pal.com’s efforts to negotiate a better deal and its loss of some court disputes did not establish bad faith.
The court also rejected Twitter’s argument that Voip-Pal.com’s litigation position was unreasonable because the patent allegedly covered patent-ineligible subject matter. Patents are presumed valid, and Twitter had not identified a decision invalidating the patent at issue. The court further concluded that Voip-Pal.com’s participation in other patent litigation did not, by itself, demonstrate bad faith in this case, and Twitter had not shown that the standard for declaring Voip-Pal.com a vexatious litigant was met.
Disposition
Judge Donato denied Twitter’s motion for attorney’s fees. The opinion did not decide whether Twitter infringed the patent; the case had already been dismissed after the covenant not to sue.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.