IP Law Daily, PATENT—D. Del.: Award of attorneys’ fees denied in mobile-device gambling dispute, (Oct 30, 2024)

By Kevin M. Finson

The case was litigated in an “extremely reasonable” manner and the claims were not frivolous, even though ultimately unsuccessful.

DraftKings was not entitled to an award of attorneys’ fees after prevailing in a patent infringement dispute, the U.S. District Court in Wilmington has held. The case was not shown to be exceptional because the patentee litigated reasonably and the claims were not frivolous (Interactive Games LLC v. DraftKings, Inc., No. 1:19-cv-01105-RGA (D. Del. Oct. 29, 2024)).

Interactive Games, LLC (Interactive) was the owner of U.S. Patents Nos. 8,956,231 (the ’231 patent), 8,974,302 (the ’302 patent), 8,616,967 (the ’967 patent), and 9,430,901 (the ’901 patent), all of which were directed towards “remote wagering on mobile devices.” Interactive brought suit for infringement against DraftKings, Inc. (DraftKings). DraftKings moved to dismiss, and the case was stayed pending settlement negotiations and Patent Trial & Appeal Board (PTAB) proceedings. While the case was stayed the PTAB found three of the four patents unpatentable, but declined to institute an inter partes review of the ’302 patent. Interactive appealed the three PTAB decisions and the Federal Circuit affirmed two of the decisions, with Interactive voluntarily dismissing the remaining appeal. Interactive then voluntarily dismissed the present infringement case, while an ex parte re-examination was pending as to the surviving ’302 patent. The PTAB ultimately upheld the patentability of the ’302 patent. Following the voluntary dismissal, DraftKings petitioned for attorney’s fees and costs.

Local rules. Interactive argued, first, that DraftKings had failed to comply with the applicable Local Rules as to providing the amount of fees sought. The court found the cited rule applicable only to post-trial motions for fees, and therefore declined to dismiss the motion on Local Rules grounds.

Prevailing party. DraftKings argued that it was the “prevailing party” as required for an award of fees, because it successfully invalidated the asserted claims as to three of the four patents at issue in concurrent PTAB proceedings. Interactive argued that it had voluntarily dismissed its remaining claims, not admitting to a loss. The court held that it was sufficient that DraftKings prevailed as to the three patents invalidated and it did not need to prevail on all issues in order to be entitled to an award of fees.

Exceptional case. DraftKings argued that the case was exceptional both because it was litigated in an unreasonable manner and because it lacked substantive strength. The court found that Interactive’s conduct in litigating was in fact “extremely reasonable” and that there was no showing of an attempt to run up costs or extract a nuisance value settlement. Even though Interactive was a non-practicing entity it was still entitled to enforce its patent rights and to seek settlements. As to substantive strength, the court found Interactive was acting reasonably when it asserted its issued patents, which were presumed valid, and that while the claims may have been weak and ultimately unsuccessful they were far from “wholly lacking in merit” as the governing caselaw required.

The court denied the motion for attorneys’ fees and costs.

The Case is No. 1:19-cv-01105-RGA.

Judge: Andrews, R.

Attorneys: Daniel M. Silver (McCarter & English, LLP) for Interactive Games LLC. Rodger Dallery Smith (Arsht & Tunnell LLP) for DraftKings, Inc.

Companies: Interactive Games LLC; DraftKings, Inc.

Cases: Patent DelawareNews