As noted in a recent edition of the Docket Report, on March 31, 2010, the United States District Court, Northern District of California denied Netflix, Inc.’s motion for attorney’s fees and costs after finding the company did not infringe a patent owned by Media Queue, LLC.

Media Queue filed the patent infringement lawsuit in October 2008, and the court found Netflix did not infringe the patent in 2009. After the ruling, Netflix moved for a finding that it was an exceptional case and asked for an award of $1,035,077.19 in attorney’s fees and $77,067.10 in costs.

In determining whether to award attorney’s fees and costs, the Court needed to first determine whether Netflix had shown the case to be exceptional by clear and convincing evidence, and second, whether an award of fees was appropriate. When considering these factors, Netflix was required to prove that the litigation was brought in bad faith and that the litigation was baseless.

Netflix claimed Media Queue’s filing of the patent infringement lawsuit was in bad faith and was baseless because the company proceeded with infringement claims that had nothing to do with the uniqueness of its patent, and because it was made aware of flaws in its claims early on in the litigation.

Media Queue responded by arguing its infringement claims were reasonable interpretations of the patent, and that its owner, Mr. Yar, conducted more than a month of due diligence in which he reviewed documents describing interactions between the patent owner and Netflix concerning a failed sale of the patent to Netflix.

Considering the arguments, the Court determined that Netflix did not meet the burden of showing clear and convincing evidence that Media Queue’s claims were in bad faith and baseless, and denied Netflix’s motion for attorney’s fees and costs.

SOURCE:

Media Queue, LLC. v. Netflix, Inc., et al., No C 09-1027-SI (N.D. Calif. March 31, 2010) (Order Denying Defendants’ Motion for Attorneys’ Fees and Costs).