Fees Denied to K2 in Short Fat Ski Case

The case is Paul N. Nelson v. K2 Inc., Cause No. C07-1660RSL. My previous posts, explain that plaintiff Nelson lost his priority date claimed in U.S. Patent No. 5,603,522 on written description grounds, and then lost summary judgment on his invalidity defense based on allegedly "experimental sales." K2 moved for attorneys fees. In an order denying fees, Judge Lasnik reasoned as follows:

"Prior to commencing this litigation, plaintiff was under no obligation to accept defendant’s (or Volant’s) opinion regarding the validity of United States Patent No. 5,603,522 (the ‘522 patent). Plaintiff had successfully marketed and licensed the invention to a number of sophisticated entities, including K2, and had always maintained that the ‘522 patent was entitled to its earliest claimed priority date. Determining the correct priority date required the Court to evaluate the range and "blaze mark" cases and to consider the policy implications of requiring too much or too little specificity from an inventor. Plaintiff was entitled to a judicial determination of this important issue and was not required to abandon the ‘522 patent simply because his competitors challenged its validity. Because the lawsuit was not baseless or frivolous at its inception, plaintiff’s prosecution of his claims does not justify an award of attorney’s fees under 35 U.S.C. § 285."

Judge Lasnik went on to explain that "the closer question" was whether the prosecution of the case since the first SJ order on written description grounds, October 15, 2008, should be characterized as "exceptional." This issue arose because at oral argument, plaintiff’s counsel apparently stated "we’re out of here . . . we lose" if the Court granted K2's first SJ motion.

Attempting to explain these statements, plaintiffs presented evidence regarding settlement negotiations between the parties, arguing that the fees defendants incurred after the Court’s priority date ruling resulted from K2's own "strategic choices." This evidence was called into question by declarations submitted by K2.

Explaining that "[f]ee disputes should not devolve into mini-trials," Judge Lasnik denied K2's motion, noting that "[i]t is clear from either version of events that plaintiff took significant, albeit unsuccessful, steps to resolve this case in an appropriate and timely manner."

Indeed, plaintiff offered a "walk-away" settlement within days of receiving the Court’s priority date ruling. This was rejected by K2 because they believed the settlement should come with a payment of attorneys fees.

Noting further that plaintiff's experimental use defense was "not well supported," Judge Lasnik said that the weak defense could not serve as basis for fees where "defendants opted to continue the litigation" following the "walk away" proposal.

This is a reminder that continuing litigation purely for the recovery of attorneys fees is almost always a bad idea. The better route is to simply accept your hard-fought victory and move on. After all, this is America, where the default rule is that each party should bear their own attorneys fees, win, lose, or draw.nelsonK2FeeOrder.pdf