The U.S. Court of Appeals recently rebuffed the bid by DISH Network LLC to recoup attorney fees from a law firm that represented a company DISH termed as a “judgment-proof shell.” The entity in question had unsatisfactorily sued DISH on charges of patent infringements. Bloomberg Law provides a detailed account of the case.
It’s important to note that the Patent Act’s fee-shifting provision, Section 285, allows courts to bestow “reasonable” attorney fees to the successful party in “exceptional cases”. Ordinarily, such fees are charged to the losing party, not their legal representatives. In recent times, the argument from the defense sector has been that patent monetization firms manage to evade these charges by establishing thinly capitalized entities with negligible assets.
DISH Network’s attempt to challenge this norm by seeking fees directly from the law firm came to a halt with this rejection.
Legal professionals worldwide need to pay heed to such rulings as they set precedents that can have implications on patent suits and fee shifting norms in the future.