Federal Circuit Grants Attorneys’ Fees For Frivolous Appeal
On July 14, 2022, the Court of Appeals for the Federal Circuit (CAFC) sanctioned plaintiff-appellant Pop Top Corp. for the filing of a frivolous appeal, granting defendant-appellee Rakuten Kobo Inc. $107,748 in attorney’s fees and doubled costs. Pop Top Corp. v. Rakuten Kobo Inc., No. 21-2174 (Fed. Cir. July 14, 2022).
Under Federal Rule of Appellate Procedure 38, the CAFC may “award just damages and single or double costs to the appellee” when an appeal is frivolous. And according to the CAFC, it “has a longstanding policy of enforcing Rule 38 vigorously.” Walker v. Health Int’l Corp., 845 F.3d 1148, 1157 (Fed. Cir. 2017).
Appeals may either be frivolous as filed or frivolous as argued. An appeal is frivolous as filed when “the judgment by the tribunal below was so plainly correct and the legal authority contrary to appellant’s position so clear that there really is no appealable issue.” State Indus., Inc. v. Mor-Flo Indus., Inc., 948 F.2d 1573, 1578 (Fed. Cir. 1991). An appeal is frivolous as argued when the appellant engages in misconduct in arguing the appeal. Id.
The underlying appeal came from a dispute in the Northern District of California. Pop Top had sued Kobo for infringement of U.S. Patent No. 7,966,623, which has a single claim directed towards the implementation of highlighting on webpages. Accordingly, the claim requires, in part, an “internet document” requested by a web browser that includes “code for invoking a highlighting service.” Pop Top asserted that eBooks distributed by Kobo’s eReader application served as the claimed “internet document,” but failed to identify any particular code in the eBooks that invokes a highlighting service.
Undeterred by warnings from Kobo that its eBooks do not any contain code related to highlighting and that all highlighting functionality is present in the overlying eReader application, Pop Top pressed on. The district court then granted summary judgement of non-infringement in response to a declaration by Kobo’s CTO that its eBooks do not contain any code related to highlighting.
Pop Top appealed, arguing, in part, that the district court erred by not resolving a purported claim construction dispute: whether the limitation “code for invoking a highlighting service” required “all code necessary to highlight the served internet document” or merely “any code that leads to the highlighting of the internet document.” The Federal Circuit affirmed without opinion, and Kobo moved for sanctions, arguing that the appeal was frivolous both as filed and as argued.
The Federal Circuit sided with Kobo. The appeal was frivolous as filed because it presented the district court with “no evidence whatsoever” that the eBooks contained “code for invoking a highlighting service.” And the appeal was frivolous as argued because Pop Top’s purported claim construction dispute “blatantly misconstrued Kobo’s position.” Rather than present a contrary construction, Kobo had argued it does not infringe even under Pop Top’s construction because the eBooks do not contain any code at all that invokes the highlighting service.