IP Law Daily, PATENT—Fed. Cir.: Patent holder and counsel sanctioned for pursuing frivolous appeal, (Jul 14, 2022)

By Kevin M. Finson, J.D.

The patent holder’s appeal of the district court’s noninfringment ruling was frivolous as filed and as argued.

The holder of a patent for highlighter functionality on web pages acted frivolously in filing and arguing an appeal of an adverse summary judgment decision, a divided panel of the U.S. Court of Appeals for the Federal Circuit has held. The patent holder produced absolutely no evidence of infringement and ignored clear evidence of non-infringement. The patent holder and its counsel were jointly liable for $107,748 in costs and attorney fees awarded to the defendant. Circuit Judge Newman dissented and would have applied a more stringent standard of frivolousness (Pop Top Corp. v. Rakuten Kobo, Inc., July 14, 2022, per curiam).

Pop Top Corp. (Pop Top) was the owner of U.S. Patent No. 7,966,623 (the ’623 patent), which was directed to methods and systems for “content providers and authors of web-based content to enable highlighter functionality on their web pages.” Pop Top filed suit for infringement against Rakuten Kobo, Inc. (Kobo), alleging that Kobo’s e-book that it sold via its eReader application infringed a patent claim that required an internet document that included “code for invoking a highlighting service” to operate with that internet document. Kobo obtained summary judgment in the trial court on the ground that the highlighting functionality it used was contained solely in code within the eReader, and that the actual “internet documents” or eBooks contained no code related to highlighting at all. Pop Top appealed, and the Federal Circuit issued a Rule 36 judgment affirming the district court’s ruling without opinion. Kobo then moved for an award of double costs as a sanction for a frivolous appeal under Rule 38 of the Federal Rules of Appellate Procedure

Frivolousness. The Federal Circuit determined that the appeal was frivolous as filed because the trial court had determined, and the appellate court agreed, that Pop Top had presented “no evidence whatsoever” in support of its claim that the eBooks contained any highlighting related code and pursued the litigation despite being in possession of a complete eBook file which would have shown that no such code existed. The district court determined that Pop Top offered “no evidence whatsoever that the eBooks for the Kobo App include ‘code for invoking a highlighting service,’ despite being in possession of a complete eBook file.” Because it “failed to identify any evidence that the eBooks contain code for invoking a highlighting service, Pop Top had no reasonable basis to appeal the district court’s summary judgment,” the Federal Circuit said.

The court further found that the appeal was frivolous as argued because Pop Top distorted the record and attempted to mislead the court by arguing that a factual dispute existed about the construction of the term “code for invoking” when Kobo had explicitly stated that it did not dispute Pop Top’s construction. Kobo was awarded double costs, with a reduction made because the court felt the number of hours expended by counsel on the frivolousness motion was excessive.

The court awarded Kobo $107,748.27 in double costs and attorney fees, for which Pop Top and its counsel were jointly and severally liable.

Dissent. Circuit Judge Pauline Newman dissented and would have applied a more stringent standard of frivolousness, noting that merely losing the case is not enough and that even the weakest of cases are entitled to the right to an appeal. “Litigation by its nature reflects the spin of advocacy, and the right of appellate review is a safeguard to the rule of law,” Judge Newman said. “The judicial burden of reviewing a weak appeal or receiving one-sided argumentation does not warrant the sanction of award of attorneys’ fees.”

The case is No. 2021-2174.

Attorneys: Matthew Michael Wawrzyn (Wawrzyn LLC) for Pop Top Corp. Joshua Lee Raskin (Greenberg Traurig, LLP) for Rakuten Kobo Inc.

Companies: Pop Top Corp.; Rakuten Kobo Inc.

Cases: Patent FedCirNews