Move over, Mouse over

The story of Webvention LLC provides a cautionary tale to overly aggressive patent trolls, but an encouraging one to accused infringers who may seek to litigate on the merits rather than cut a nuisance value settlement. Several years ago, Webvention filed serial lawsuits against several hundred defendants, alleging infringement of U.S. Patent No. 5,251,294, which it claimed covered “mouse over” technology. Originally filed in Texas and Delaware, the cases were transferred by the Judicial Panel on Multidistrict Litigation to the District of Maryland. (Note of disclosure: The original request for transfer was submitted by our firm).

The ‘294 patent faired rather poorly on a reexamination before the Patent & Trademark Office, and most of the cases were dismissed once the patent itself was invalidated. But, plucky Novartis Corporation continued the fight. Having filed a declaratory judgment action against Webvention, Novartis moved for judgment on the pleadings and a finding that the case was ‘exceptional’ under Section 285 (entitling Novartis to collect its attorneys’ fees). Seeing the writing on the wall, Webvention quickly filed a covenant not to sue Novartis for infringement—and then moved to dismiss on grounds that the controversy was moot.

Not so fast. While the Court agreed that the motion was now moot, it also determined that Novartis was the prevailing party, and that it could consider the claim for attorneys’ fees.

Just two days ago, Judge Blake granted Novartis’ request for fees, and ordered further briefing on the specific amount. Moreover, when confronted with Webvention’s argument that it had wound up its business and therefore, that there was no longer a man behind the curtain to pay the freight, the Court ordered Webvention’s counsel, to identify all principals, officers, and agents.

Stay tuned for the next edition.