Too Many Bites At The Apple?

• Published date: 27 July 2022
• Subject Matter: Intellectual Property, Media, Telecoms, IT, Entertainment, Patent, Gaming
• Law Firm: Sheppard Mullin Richter & Hampton
• Author: Mr Jeffrey Liang

When a patent owner loses at the International Trade Commission ("ITC"), can it hire new counsel and try again in district court? That question will be answered in Gamevice, Inc. v. Nintendo Co., Ltd. et al, No. 3-18-cv-01942 (N.D. Cal.), where plaintiff Gamevice is asserting three patents against Nintendo despite losing on those same patents in two prior ITC proceedings.

In 2018, Gamevice filed an ITC complaint against Nintendo, alleging that the Nintendo Switch infringed two related Gamevice patents. Gamevice lost. The administrative law judge (ALJ") entered an Initial Determination of No Violation. Gamevice appealed the ALJ's claim constructions to the full Commission and the Federal Circuit, and lost at both levels. Subsequently, Gamevice filed a second ITC action asserting a newly-issued continuation patent. Despite the fact that this new patent was filed and prosecuted during the prior ITC proceeding specifically to overcome claim construction issues in that first proceeding, Gamevice lost again. The ALJ issued an Initial Determination finding no infringement and the ITC summarily adopted the ALJ's Initial Determination as its Final Determination. Gamevice dismissed its appeal to the Federal Circuit before briefing began.

The litigation then moved to district court. Following resolution of the ITC proceedings and Federal Circuit appeals, Judge Seeborg ended the stay of the corresponding district court case between Gamevice and Nintendo. At this point, Gamevice hired a new law firm that proceeded to litigate the same three patents that Gamevice had already lost on at the ITC, raising the question of whether this is zealous advocacy or frivolous litigation.

Nintendo moved for Rule 11 sanctions. In the context of patent-infringement actions, an objectively reasonable inquiry under Rule 11 requires that an attorney (1) performs a nonfrivolous claim construction analysis, and (2) applies it as part of a reasonable infringement analysis. Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295, 1301-02 (Fed. Cir. 2004). While "[r]easonable minds can differ as to claim construction positions and losing constructions can nevertheless be nonfrivolous," Raylon, LLC v. Complus Data Innovations, Inc., 700 F.3d 1361, 1368 (Fed. Cir. 2012), a claim construction position becomes frivolous'and so objectively unreasonable'when "no reasonable litigant could believe it would succeed." iLor, LLC v. Google, Inc., 631 F.3d 1372, 1378 (Fed. Cir. 2011).

Nintendo argued that...