Lyft, Inc. v. Quartz Auto Technologies LLC

Background

Lyft sought a declaration that it did not infringe five patents owned by Quartz Auto Technologies LLC. Lyft later obtained a judgment that the asserted claims of the ’443 patent were invalid under 35 U.S.C. § 101. The parties also agreed to a judgment of non-infringement concerning the ’871 and ’215 patents and submitted a partial-dismissal order covering four patents.

That order stated that each party would bear its own costs and attorney’s fees. Lyft then moved for $1,037,013.24 in attorney’s fees for work concerning the ’871, ’443, and ’215 patents. Lyft also requested limited discovery about Quartz’s pre-suit investigation and good-faith conduct if the court considered Quartz’s arguments and declaration on those subjects.

Court’s Analysis

For the ’871 and ’215 patents, the Court held that the partial-dismissal order barred Lyft from seeking fees. The order’s unqualified statement that each party would bear its own costs and attorney’s fees applied to those patents. The Court also explained that the parties’ stipulation supported the same result because it referred to Lyft’s claims concerning those patents as part of the dismissed matters.

For the ’443 patent, the Court considered whether the case was “exceptional” under 35 U.S.C. § 285. An exceptional patent case may justify fees when the case stands out because of the strength of a party’s position or the unreasonable way the case was litigated. The Court found that Quartz’s argument that validity should be considered after claim construction was not unreasonable, and Quartz’s opposition to Lyft’s invalidity arguments was not frivolous merely because the Court ultimately ruled for Lyft.

The Court criticized Quartz for taking inconsistent positions about the scope of the ’443 patent’s claims at different stages of the case. But it concluded that this conduct involved a narrow issue and did not amount to a pattern of constantly changing positions sufficient to make the case exceptional. The Court also found no basis for awarding fees under its inherent authority, which can apply to misconduct such as bad-faith or vexatious litigation.

Disposition

Judge Jon S. Tigar denied Lyft’s motion for attorney’s fees. The Court also denied Lyft’s request for limited discovery as moot because it did not rely on the disputed attorney declaration concerning Quartz’s pre-suit investigation.