Drop Stop v. Zhu is a nonprecedential case decided on February 8, 2019 on appeal from the Central District of California. After the parties reached a settlement stipulating to infringement of some claims, plaintiff Drop Stop moved for attorney fees. The district court granted the motion and awarded $600,000 in fees because of (1) defendants’ reliance on an informal non-infringement opinion; “(2) their conduct in evading service and defaulting; (3) their use of information obtained during confidential settlement negotiations to add a patent misuse defense; (4) the late timing of their discovery; and (5) their frivolous ex parte practice.” The court used “an aggregate, global methodology to evaluate the proper amount of fees,” instead of apportioning fees issue-by-issue. Defendants appealed.
The Federal Circuit affirmed the decision awarding fees.
The district court did not abuse its discretion in finding the case exceptional. “Here, the district court provided a thorough explanation for why it found this case to be exceptional. As the court explained, while the individual acts of misconduct might not make Defendants’ conduct look exceptional, Defendants’ conduct over the course of the entire litigation support the conclusion that this is an exceptional case.”
The district court’s attorney fee award of $600,000 was not clearly erroneous. “[T]he district court carefully reviewed the billing records and other supporting documents and used an aggregate, global methodology to evaluate the proper amount of fees…. Drop Stop provided adequate supporting documents detailing the basis for its requested fee award.” As to apportionment, “the district court noted that the Defendants failed to explain how fees could be apportioned in this case.” Moreover, “Defendants’ conduct permeated every stage of the litigation. Specifically, the [district] court indicated that the fees were incurred largely due to Defendants’ actions—including delay tactics, chilling defenses, and re-raised arguments—taken during the course of the litigation.”