Netflix is owed attorneys’ fees from court-hopping patent plaintiff, U.S. court affirms

Signage at the Netflix booth is seen on the convention floor at Comic-Con International in San Diego, California, U.S., July 21, 2022. REUTERS/Bing Guan

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  • Appeals court says Realtime Adaptive Streaming moved case to avoid negative ruling
  • Opinion finds company’s conduct ‘totally unjustified’

(Reuters) – A patent holding company that sued Netflix Inc over its streaming technology must pay the online movie giant $400,000 in attorneys’ fees as sanction for switching courts to avoid an adverse ruling, a U.S. appeals court affirmed Wednesday.

Realtime Adaptive Streaming LLC showed “blatant gamesmanship” by abandoning a lawsuit it brought in Delaware and refiling the case in California to try to head off a negative ruling, the U.S. Court of Appeals for the Federal Circuit said.

Netflix declined to comment on the decision. An attorney for Realtime did not immediately respond to a request for comment.

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Realtime has sued several tech companies including Google, Amazon and Apple for infringing its streaming-related patents. It sued Netflix in Delaware in 2017 for allegedly violating six patents related to data compression.

Realtime dropped the case in 2019 after a magistrate judge recommended that four of Realtime’s patents should be declared invalid. U.S. District Judge Colm Connolly had also invalidated related Realtime patents in other cases, but had not ruled on the magistrate’s report.

Realtime sued Netflix the next day in Los Angeles for infringing the same patents, choosing a court that had already handed down more favorable decisions for Realtime.

Realtime had previously argued against Netflix’s motion to move the case from Delaware to Northern California because it lacked any ties to the state and said moving the case there would be inconvenient for it. Netflix asked the Los Angeles court to move the case back to Delaware, which Realtime then opposed because it said California was more convenient.

The Los Angeles court awarded Netflix $409,000 in attorneys’ fees. It said Realtime’s move to a more favorable jurisdiction when its Delaware case was “undeniably tanking” was “totally unjustified.”

Realtime said on appeal that it had the right to dismiss and refile its case, and that “forum shopping alone is an unprecedented basis for attorney’s fees.”

But the Federal Circuit agreed with the California court. Circuit Judge Raymond Chen wrote for a three-judge panel on Wednesday that Realtime’s conduct was a “misuse of the ability to refile to wipe the slate clean.”

The case is Realtime Adaptive Streaming LLC v. Netflix Inc, U.S. Court of Appeals for the Federal Circuit, No. 21-1484.

For Realtime: Philip Wang of Russ August & Kabat

For Netflix: Todd Gregorian of Fenwick & West

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Blake Brittain

Thomson Reuters

Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets. Reach him at blake.brittain@thomsonreuters.com

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