Contents
Case Overview (Dec. 17, 2015 Ruling)
Judge: Rodney Gilstrap
Court: Eastern District of Texas (EDTX)
Case: eDekka LLC v. 3balls.com, Inc.
Judge ruled plaintiff’s § 101 validity position was “objectively unreasonable.”
Awarded attorneys’ fees under 35 U.S.C. § 285.
Found need for deterrence due to:
Weak § 101 arguments
Vexatious litigation strategy
Legal Background
Based on Supreme Court decision in Alice Corporation Pty. Ltd. v. CLS Bank International.
§ 101 concerns patentable subject matter eligibility.
§ 285 allows fee awards in “exceptional cases.”
Patent at Issue
Patent: U.S. Patent No. 6,266,674
Title: “Random Access Information Retrieval Utilizing User-Defined Labels”
Claimed:
Method of storing information (Claim 1)
Method of retrieving information (Claim 3)
Court’s Findings (September 21, 2015 Summary Judgment)
Claims directed to abstract idea:
“Storing and labeling information”
Activities considered:
Routine
Performable by a human
No “inventive concept” to transform abstract idea into patentable subject matter.
Computer-related terms (e.g., data structure, input, label) did not meaningfully limit the abstract idea.
“Objectively Unreasonable” Conduct
Judge Gilstrap found:
Patent was “demonstrably weak on its face.”
No reasonable litigant could expect success under § 101.
Plaintiff made “insupportable” arguments, including:
Claimed technological improvement
Claimed educational benefit
Claimed need for special-purpose computer
These arguments justified exceptional case finding under § 285.
“Litigated in an Unreasonable Manner”
Judge also found misconduct based on litigation behavior:
Filed numerous “strikingly similar” lawsuits in EDTX.
Strategy aimed at:
Avoiding merits-based resolution
Forcing early settlements below defense cost.
Pattern of early settlements:
Amounts significantly lower than trial costs.
Two days before § 101 hearing:
Offered settlements for $3,000 per defendant.
Court concluded plaintiff sought to:
Exploit high defense costs
Extract nuisance-value settlements.
This strategy contributed significantly to exceptional case finding.
Significance in EDTX
This ruling is rare in EDTX.
Post-Alice Statistics:
Since Alice:
3,120 patent cases filed in EDTX (20% of national total).
Nationwide:
41% of § 101 motions granted.
EDTX:
Only 33% granted (5 of 15).
EDTX judges issue only 4% of nationwide § 101 rulings.
Attorneys’ Fees Under § 285
Second time Judge Gilstrap awarded fees since Octane Fitness LLC v. Icon Health & Fitness Inc..
Octane Fitness established:
“Totality of the circumstances” test for exceptional cases.
EDTX fee grant rate:
13% (5 of 38).
Nationwide:
30% (106 of 355).
Overall Importance
Clarifies what constitutes an “exceptional case” under § 285 post-Alice.
Signals stronger judicial response to:
Weak § 101 claims
Nuisance-value settlement strategies.
Important warning to patent litigators in EDTX.