District Court Denies Attorneys’ Fees Award Against Non-Practicing Patent Assertion Entity

Wednesday, September 20, 2017

CTP is a non-practicing patent assertion entity that sued 75 printing companies for patent infringement.  The U.S. Judicial Panel on Multidistrict Litigation consolidated the cases that did not settle and transferred them to the Maryland District Court for pretrial purposes.  District Court Judge Marvin J. Garbis dismissed the cases without prejudice on the ground that CTP did not own the patents at the time it filed the lawsuits, and thus lacked standing.  Several defendants then moved for attorneys’ fees under 35 U.S.C. § 285 and 28 U.S.C. § 1927.  Judge Garbis refused to award attorneys’ fees under Section 285 on the ground that the defendants were not “prevailing parties” under the statute because the dismissal was without prejudice to CTP refiling the actions after it corrected ownership, and thus the dismissal did not materially alter the legal relationship of the parties.  Judge Garbis then denied the motion under Section 1927 on the ground that neither CTP nor its counsel acted frivolously or with bad faith, or pursued litigation recklessly or knowing that its claims lacked merit, because CTP had a reasonable basis for believing it owned the patents when it filed the lawsuits.  In re:  CTP Innovations, LLC, Patent Litigation CTP Innovations, LLC v. Geo Graphics Inc., MDL No. 14-MD-2581 (D. Md. Sep. 12, 2017).