IP Law Daily, PATENT—Fed. Cir.: Attorney fee award to Vizio affirmed in infringement suit, (Dec 17, 2025)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

The district court did not abuse its discretion in finding the case exceptional based on the patent owner’s failure to plead a viable damages theory and its unreasonable litigation conduct.

In a non-precedential disposition, the US Court of Appeals for the Federal Circuit affirmed a district court’s award of attorney fees to Vizio, Inc. after concluding that an infringement suit brought by a non-practicing entity qualified as an “exceptional case” under 35 U.S.C. § 285. The appellate court held that the non-practicing entity pursued a substantively weak litigation position by failing to plead any viable theory of damages in light of expired patents and noncompliance with the patent marking statute. Further, the entity was found to have litigated in an unreasonable manner by ignoring court-ordered discovery deadlines, advancing nuisance-value settlement demands, and engaging in a broader pattern of infringement suits that were dismissed before reaching the merits (Ortiz & Associates Consulting, LLC v. Vizio, Inc., No. 24-1783 (Fed. Cir. Dec. 17, 2025)).

Background. The plaintiff/appellant, Ortiz & Associates Consulting, LLC, is a patent assertion entity that owns and enforces intellectual property. The defendant/appellee, Vizio, Inc., is a major consumer electronics company that designs and sells televisions and related streaming and display products in the United States.

The dispute involved two patents owned by Ortiz: U.S. Patent Nos. 9,147,299 (the ’299 patent) and 9,549,285 (the ’285 patent). Both patents had expired before Ortiz initiated the present lawsuit. As a result, any recovery was necessarily limited to pre-suit damages accruing during the period when the patents were still in force.

Ortiz filed suit against Vizio in the Northern District of Texas, alleging infringement of the ’299 and ’285 patents and seeking monetary damages. Vizio moved to dismiss the complaint, arguing that Ortiz failed to plead compliance with § 287(a) and therefore had no legally cognizable claim to damages. Ortiz responded by filing a first amended complaint that abandoned some claims but still failed to plead marking compliance or to explain why the marking statute did not apply. Vizio renewed its motion to dismiss. The district court dismissed the action with prejudice, holding that Ortiz’s failure to plead compliance with the marking statute independently warranted dismissal. The court further concluded that Ortiz’s prior dismissals with prejudice of infringement suits against Panasonic and Roku operated as the functional equivalent of licenses, thereby triggering Ortiz’s obligation to ensure marking by those entities. After dismissal, Vizio moved for attorney fees under § 285. The district court granted fees, finding the case exceptional, but declined to impose sanctions under 28 U.S.C. § 1927 or its inherent powers. Ortiz appealed only the fee award.

Exceptional case standard. The Federal Circuit began its analysis by reaffirming the governing framework articulated in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014), under which an exceptional case stands out with respect to the substantive strength of a party’s litigating position or the unreasonable manner in which the case was litigated. The court emphasized that district courts must consider the totality of the circumstances and are entitled to broad discretion, with appellate review limited to reviewing abuse of discretion.

Substantive weakness of Ortiz’s position. The court agreed with the district court that Ortiz’s litigation position was substantively weak. Citing Dunlap v. Schofield, 152 U.S. 244 (1894), the appellate court placed the burden on the patentee to plead and prove compliance with the marking statute as a prerequisite to recovering pre-suit damages. The court rejected Ortiz’s argument that it had no marking obligations because it did not itself make or sell patented articles, noting that the statute expressly extends to products made or sold by licensees. Ortiz had been expressly alerted to this deficiency in Vizio’s first motion to dismiss but failed to cure it in its amended complaint. That failure, the court held, underscored the lack of any viable damages theory.

Unreasonable litigation conduct. The Federal Circuit also upheld the district court’s conclusion that Ortiz litigated the case in an unreasonable manner. Ortiz conceded that it failed to comply with discovery deadlines, including deadlines to serve infringement contentions, but characterized that noncompliance as a strategic choice to conserve resources while the motion to dismiss was pending. The court rejected that justification, emphasizing that parties may not unilaterally disregard court-ordered schedules. Citing Federal Rule of Civil Procedure 16 and decisions recognizing the central role of scheduling orders in case management, the court held that Ortiz’s conduct factored adequately into the exceptional case analysis. The court further noted that conduct need not be independently sanctionable to support a fee award under § 285, citing Lumen View Technology LLC v. Findthebest.com, Inc., 811 F.3d 479 (Fed. Cir. 2016).

Pattern of litigation. Finally, the Federal Circuit affirmed the district court’s consideration of Ortiz’s broader litigation history and settlement behavior. While reiterating that the mere filing of multiple lawsuits does not, by itself, establish improper motive, the court cited SFA Systems, LLC v. Newegg, Inc., 793 F.3d 1344 (Fed. Cir. 2015), to emphasize that a pattern of suits dismissed before reaching the merits, combined with nuisance-value settlement demands, may support a fee award. The district court found that Ortiz had repeatedly filed and dismissed infringement actions involving the same patents and had made a settlement demand below the cost of defense. Considering these facts alongside Ortiz’s weak merits position and procedural noncompliance, the Federal Circuit held that the exceptional case determination was well within the district court’s discretion.

The Case is No. 24-1783.

Judge: Bryson, W.

Attorneys: William Peterson Ramey (Ramey LLP) for Ortiz & Associates Consulting, LLC. Paul Skiermont (Skiermont Derby LLP) for Vizio, Inc.

Companies: Ortiz & Associates Consulting, LLC; Vizio, Inc.

Cases: Patent FedCirNews TexasNews