Taxes Court Awards Volkswagen $207,543 in Legal Fees After Dismissing Meritless Patent Infringement Lawsuit

The U.S. District Court for the Southern District of Texas, Houston Division, has ruled in favour of Volkswagen Group of America, Inc., awarding the company US$207,543.60 in attorney’s fees following a patent infringement lawsuit.

The case was brought by a plaintiff alleging that Volkswagen infringed on a patent, seeking an injunction, future damages, and compensation for past damages. Volkswagen contested the claims and filed a motion to dismiss the case, which the court granted with prejudice. The court deemed the plaintiff’s claims meritless, labelling the case as exceptional and frivolous.

In its ruling, the court rejected the plaintiff’s attempt to limit the fee award to only the exceptional aspects of the case, stating that the entire litigation was tainted by the plaintiff’s misconduct. The court criticized the plaintiff’s allegations as showing “chutzpah” and “some nerve”, emphasizing that the proceeding should never have been initiated.

The court also noted that the requested injunction and future damages were unattainable due to the expiration of the patent in question. Furthermore, the plaintiff was denied past damages due to failure to meet the patent marking requirements outlined in Section 287 of the U.S. Code and dishonesty regarding previous licencing agreements.

Volkswagen’s detailed billing records, which showed a total of 256 hours worked by three lawyers, were deemed reasonable by the court. The court found the hourly rates of the attorneys $979 for lead counsel, $825 for of counsel, and $600 for local counsel justifiable given their experience and the complexity of the patent law issues involved.

District Judge Lee Rosenthal, writing for the court, acknowledged the high fees commanded by patent attorneys, stating, “Attorneys specializing in patent cases, which are often technically as well as legally complicated, are no exception.

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