Undertakings Ordered in Copyright Cases, But Denied in Patent Cases.
Charlene M. Morrow and Brian E. Lahti of Fenwick & West LLP have written an interesting article in the October 31, 2014 issue of BNA’s Patent, Trademark & Copyright Journal, 88 PTCJ 1705.
In this article, they explore how district courts in patent and copyright case have reacted to resolving defense motions pursuant to California Code of Civil Procedure section 1030, which allows a defendant to force the plaintiff to file a bond to secure an award of costs and attorney’s fees when (1) the plaintiff resides out of state or is a foreign corporation, and (2) there is a reasonable possibility that the defendant will prevail. (Obviously, in patent litigation, the plaintiff targets of many of these motions would be Patent Assertion Entities [PAEs, or also known as patent trolls].) Section 1030 may be applied in federal court according to Ms. Morrow and Mr. Lahti.
The two patent cases surveyed resulted in denial of section 1030 defense motions, with the district judges seeming to say that 35 U.S.C. § 285 (the “exceptional” patent fee-shifting provision) was a sufficient remedy down the line—also observing the defense did not meet the “reasonable probability” element of section 1030. (See, e.g., IPVZX Patent Holdings, Inc. v. Voxernet, LLC, No. 5:13-cv-01708-HRL (N.D. Cal. Doc. No. 120); GeoTag, Inc. v. Zoosk, Inc., No. 13-cv-00217-EMC (N.D. Cal. Doc. No. 204.)
However, a different result occurred in the copyright cases. Northern California district judges granted section 1030 motions in a trio of cases. (See AF Holdings LLC v. Trinh, No. C-12-02393 (N.D. Cal. Nov. 9, 2012); AF Holdings LLC v. Navasca, No. C-12-2396-EMC (N.D. Cal. Feb. 5, 2013, Doc. No. 22); AF Holdings LLC v. Magsumbol, 106 U.S.P.Q.2d 1586 (N.D. Cal. Mar. 18, 2013).)
Of particular interest will be whether the U.S. Supreme Court’s rejection of a more rigid test for 35 U.S.C. § 285 fee-shifting in Octane Fitness/Hallmark will mean 1030 motions have a greater chance of success in the future.