CAFC Reverses Attorney's Fees, Sanctions, While Affirming Obviousness in E-Banking Patent Case

"In concluding that the district court had erroneously found the case exceptional for awarding attorney's fees under Section 285...the CAFC noted that mere invalidity was not legally sufficient for awarding fees."

"mCom sued City National in Southern Florida asserting claims from U.S. Patent No. 8862508, System and Method for Unifying E-Banking Touch Points and Providing Personalized Financial Services. Before that lawsuit was filed, several claims of the '508 patent, which claims multi-channel servers unifying touch points across an electronic banking system for customized customer experiences, were invalidated in inter partes review (IPR) proceedings brought by Unified Patents at the PTAB."

"Finding both the asserted claims patentably indistinct from those invalidated in IPR proceedings under 35 U.S.C. § 103 obviousness, and that mCom did not adequately plead infringement, the district court granted City National's motion to dismiss and denied mCom leave to amend its complaint a second time. City National moved for attorney's fees under 35 U.S.C. § 285 and for attorney sanctions under 28 U.S.C. § 1927, which was granted by the district court after the U.S. magistrate judge recommended increasing the total a"

mCom IP sued City National Bank in the Southern District of Florida over U.S. Patent No. 8,862,508. Prior to the lawsuit, PTAB inter partes review invalidated several claims of the same patent on obviousness grounds under 35 U.S.C. § 103. The district court dismissed the complaint, finding the asserted claims patentably indistinct from the PTAB-invalidated claims and concluding that mCom did not adequately plead infringement. The district court also found the case exceptional and awarded attorney fees and sanctions. The Federal Circuit affirmed the dismissal but reversed the fee award and sanctions, holding that the district court improperly treated invalidity alone as sufficient and that mCom did not develop evidence showing frivolous litigation conduct.

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