BLACKBIRD TECH LLC, DBA BLACKBIRD TECHNOLOGIES, Plaintiff-Appellant
HEALTH IN MOTION LLC, DBA INSPIRE FITNESS, LEISURE FITNESS EQUIPMENT LLC, Defendants-Appellees
from the United States District Court for the Central
District of California in No. 2:17-cv-03488-R-GJS, Senior
Judge Manuel L. Real.
Jeffrey Ahdoot, Blackbird Tech LLC, Boston, MA, argued for
plaintiff-appellant. Also represented by Wendy Verlander;
Stamatios Stamoulis, Stamoulis & Weinblatt LLC,
Willmore F. Holbrow, III, Buchalter, A Professional
Corporation, Los Angeles, CA, argued for all
defendants-appellees. Defendant-Appellee Health In Motion LLC
also represented by Christina Le Trinh, Irvine, CA.
Prost, Chief Judge, Wallach and Hughes, Circuit Judges.
Wallach, Circuit Judge.
Blackbird Tech LLC ("Blackbird") sued Appellees
Health In Motion LLC ("HIM") and Leisure Fitness
Equipment LLC ("Leisure") (together,
"Appellees") in the U.S. District Court for the
District of Delaware, and later transferred to the U.S.
District Court for the Central District of California, for
infringement of U.S. Patent No. 6, 705, 976 ("the
'976 patent") owned by Blackbird. After more than
nineteen months of litigation, Blackbird voluntarily
dismissed its suit with prejudice and executed a covenant not
to sue, after which Appellees were granted attorney fees and
expenses in the amount of $363, 243.80. Blackbird Tech
LLC v. Health In Motion LLC, No. 2:17-cv-03488-R-GJS
(C.D. Cal. Sept. 10, 2018) (Order) (J.A. 17- 20).
appeals. We have jurisdiction pursuant to 28 U.S.C. §
1295(a)(1) (2012). We affirm.
October 2016, Blackbird sued Appellees in the U.S. District
Court for the District of Delaware ("Delaware District
Court") for infringement of the '976 patent. J.A.
418- 28 (Original Complaint). The '976 patent relates to
"exercise equipment," '976 patent col. 1 l. 11,
and more particularly to "[e]xercise equipment including
a housing having a structural surface defining an arcuate
path" and "multiple pairs of pulleys positioned
along the arcuate path, each pair of pulleys having passed
between them a cable the proximal end of which is located
outside the curved path, the distal end of the cable being
coupled to a source of resistance within the housing,"
March 2017, Appellees filed a motion to transfer to the U.S.
District Court for the Central District of California
("District Court"). J.A. 28. The Delaware District
Court granted Appellees' motion to transfer in April
2017. Blackbird Tech LLC v. TuffStuff Fitness, Int'l,
Inc., No. 1:16-cv-00733-GMS, 2017 WL 1536394, at *1 (D.
Del. Apr. 27, 2017) (J.A. 536, 547); see id. at *1
n.2 (explaining that "HIM has incorporated by reference
TuffStuff's arguments in its motion to transfer . . .,
therefore the court's memorandum and order will apply to
2017, Blackbird offered to settle its case against Appellees
for $80, 000. J.A. 2069. Appellees declined Blackbird's
offer, explaining that Blackbird's "infringement
allegations lack[ed] merit" "[i]n view of the
substantial differences between what is claimed in the
[']976 [p]atent and the accused device," viz.,
HIM's M1 Multi-Gym. J.A. 2070; see J.A. 1176,
1185-86 (User Manual for the M1 Multi-Gym). Appellees also
explained that they "believe[d] there [was] a strong
likelihood" that Blackbird would be ordered to pay
Appellees' attorney fees, and countered with a settlement
offer that included, inter alia, Blackbird "mak[ing] a
payment of $120, 000" to Appellees. J.A. 2070. In
October 2017, Blackbird made another settlement offer, this
time for $50, 000. J.A. 2241; see J.A. 1440
("Blackbird's counsel . . . made an oral offer to
settle the case if [Appellees] paid Blackbird $50,
000."). Again, Appellees declined. J.A. 1140, 2241. In
April 2018, Blackbird offered to settle yet again, this time
for $15, 000. J.A. 1440. Appellees once again declined,
"maintain[ing] their request that Blackbird pay a
portion of [Appellees'] expenses[.]" J.A. 1440.
Later that same month, and again the following month (May
2018), Blackbird offered "a 'walk-away'
settlement whereby [Appellees] would receive a license to the
['976] patent for zero dollars, and the case would be
dismissed." J.A. 2239 (describing the April 2018 offer),
2539 (describing the May 2018 offer). Once again, Appellees
declined. J.A. 2239; see J.A. 2239-40
(Blackbird's Vice President and Head of Litigation
stating that "[Appellees], through counsel, have
rejected all settlement offers by Blackbird . . ., including
the zero-dollar 'walkaway' offer. . . . I understand
the reasoning for this to be that [Appellees] have a belief
that they will ultimate[ly] be awarded their legal fees after
judgment in this matter").
2018, shortly before discovery was scheduled to end,
Appellees filed a motion for summary judgment. J.A. 555-75
(Motion for Summary Judgement). Blackbird opposed, J.A.
1215-45, but, after Appellees' motion was fully briefed,
and without notifying Appellees in advance, Blackbird filed a
notice of voluntary dismissal with prejudice, J.A. 1338-39
(Notice of Voluntary Dismissal), executed a covenant not to
sue, J.A. 1334-35 (Covenant Not to Sue), and filed a motion
to dismiss for lack of subject matter jurisdiction, J.A.
1323-28 (Motion to Dismiss). See J.A. 1441
(Appellees' lead counsel explaining that
"Blackbird's counsel never mentioned that he
intended to file a covenant not to sue. . . . Blackbird
surprisingly filed a Notice of Dismissal, Covenant Not to
Sue[, ] and Motion to Dismiss"); Oral Arg. at
20:19-20:38 (Appellees' counsel stating that Appellees
"didn't even get a call from Blackbird, [Appellees]
just saw . . . on the [CM/]ECF [system] that [Blackbird] had
filed these documents dismissing the case").
2018, the District Court dismissed Blackbird's claims
with prejudice and denied Blackbird's Motion to Dismiss,
while authorizing Appellees to "seek to recover their
costs, expenses, and/or attorney fees." J.A. 1383- 85.
That same month, Appellees filed a motion for attorney fees
and expenses, J.A. 1386-87 (Motion for Attorney Fees and
Expenses), 1390-1417 (Memorandum in Support of Motion for
Attorney Fees and Expenses), requesting $357, 768.50 in
attorney fees and $5, 475.30 in expenses, J.A. 1417. In
September 2018, the District Court issued its Order granting
Appellees' Motion for Attorney Fees and Expenses for the
total requested amount of $363, 243.80. J.A. 17-20.
Standard of Review ...