Lawsuits brought by "patent trolls," companies that have no product but file barrages of patent lawsuits, have become commonplace across the tech sector. For the few companies that choose to fight these cases until the end, it's an expensive endeavor, since defending a patent suit can cost anywhere from $1 million to several times that amount.

Television maker Vizio is one of the companies that fights back. It's beaten no less than 16 "non-practicing entities," and last week, the company released a statement showcasing its list of patent troll cases that ended in a key statistic: "$0 to plaintiff." The list includes the usual bizarrely named shells, like "E-Contact Techs" and "Man Machine Interface," as well as well-known patent holding companies like Walker Digital and Intellectual Ventures (whose patents were used by Pragmatus Telecom, one of the shells Vizio sent packing.)

Now, the company is trying to collect fees from one of its opponents, a company called Oplus Technologies. For the first time, it stands a real chance, in a case where it spent more than $1 million to win. Two recent Supreme Court decisions make it easier for victorious defendants to collect fees in patent cases. The TV maker is up against a storied patent plaintiffs' firm, Chicago-based Niro, Haller & Niro, that has fought for Oplus tooth and nail.

Vizio won its patent case against Oplus last year. After a skirmish over legal fees, US District Judge Mariana Pfaelzer published an opinion (PDF) detailing Oplus' "overly aggressive" and "uncooperative" style of litigation that was "outside the bounds of professional behavior."

"At each step of the case, Vizio's credibility increased while Oplus gathered rope to hang itself," she wrote. Yet Pfaelzer denied Vizio legal fees. Now, the Federal Circuit has ruled (PDF) that Pfaelzer needs to reconsider that decision.

"The course of this litigation was anything but ordinary," wrote a panel of three appeals judges. "The court issued an opinion with numerous findings regarding Oplus’s litigation misconduct," and the "egregious conduct" warranted giving Vizio a second shot at fees.

For Vizio, the company feels that it's on the verge of getting vindication for a long-standing policy of not backing down to patent trolls.

"Vizio stands by doing the right thing, and that's a mandate from management on down," said the company's general counsel Jerry Huang in an interview with Ars. "This is the first case we're inching closer to having fees awarded. The prospect of recovery, could be murky, since one of the typical games patent trolls like to do is different complicated structures [to hide assets]."

Oplus' attorney declined to comment.

No “fair playing field”

Huang joined Vizio, a privately held company based in Irvine, California, in 2009. The company pays patent royalties to various standard-setting bodies, competitors, and some non-competitors. But Huang says the company won't pay off "erroneous or meritless" claims.

"Nowadays, they come through 'patent brokers' who peddle a covenant not to sue, for maybe $25,000, or $50,000, or $75,000," said Huang. "They say, hey, we have this great deal for you, a limited opportunity for the next two weeks, that will go up by $20,000 more thereafter."

Huang described one case where a patent troll's lawyer said the filing fee in federal courts was "probably one of the best investments you can make," during a mediation session before a judge. "He was flaunting the fact that you get maximum bang for the buck," Huang said, explaining how he shook his head silently in court. That led to an admonishment by the magistrate judge overseeing the session, who said his reaction was disrespectful to the opposing side.

"When there's such an imbalance in perception and the defensive side can't get a fair playing field, you feel you're being shaken down," said Huang.

Oplus' lawyers have used Huang's strong feelings about patent trolls against him. After Vizio filed a second motion seeking fees, in the Chicago federal court where the Oplus case originated, Niro lawyers filed a motion saying it was they, not Vizio, who deserved to be paid back their legal fees, for defending against motions that were "frivolous" and "legally unreasonable."

"Vizio was apparently seeking to gain publicity for itself as a 'tough guy' and create expense and risk for non-manufacturing entities like Oplus (NPEs or so-called 'patent trolls') as a tactic in every case in which it was sued for patent infringement," wrote Oplus lawyers. Their motion was denied.

Litigation “stunts” don't result in fees

The two patents at issue in the case, numbered 6,239,842 and 7,271,840, were filed by Israel-based Oplus in 1998 and 2002, respectively. The earlier '842 patent covers a method of converting "an interlaced video signal into a deinterlaced signal for display on progressive scan displays," while the '840 patent describes an error correction method for digital video based on "analyzing pixel entropy."

Oplus was an Israeli startup that produced video processing chips and was bought by Intel for $100 million in 2005, but the Israeli company kept its patents. In 2011, Oplus filed lawsuits against JVC, Denon, Funai, and Vizio, as well as Sears, which sold projects and televisions made by those brands.

Vizio transferred its case to California and ultimately won it. Oplus' patents described one way of doing de-interlacing and error correction, but Pfaelzer castigated the company for never having verified whether Vizio used one of "admittedly numerous other noninfringing methods" for those two tasks.

"Oplus... utterly failed to provide any evidence or factual support" for its infringement allegations, the judge wrote.

Oplus lawyers focused on getting Vizio's financial information while spending an "inversely proportionate amount of time" looking into "the fundamental infringement issues." They knew there were other ways to do deinterlacing and error correction but instead filed discovery motions that were "ill-timed, burdensome, and inappropriate." The judge continued: "Oplus knew it was not entitled to the information it wanted. Instead, Oplus requested everything and falsely represented to the Court the scope of its own request."

The patent-holding company engaged in "other stunts," wrote the judge, like not consulting with Vizio before filing a "joint" status report, that contributed to the "harassing and vexatious nature of the litigation."

Pfaelzer didn't care for the behavior of Oplus' attorneys, either. During one hearing, she gave an Oplus lawyer a "word of caution," telling him, "I don’t want you to be quite as aggressive as you have been in addressing the Court."

"Certainly, the manner and style of Oplus’s counsel was offensive to the Court," she wrote in her February order, "but that alone is insufficient to find litigation misconduct."

The strongly worded opinion has a surprise ending, though—the judge didn't grant Vizio fees.

"There is little reason to believe that significantly more attorney fees or expert fees have been incurred than would have been in the absence of Oplus’s vexatious behavior," she concluded. Oplus lost on summary judgment, "as it would have even without its misconduct."

Now the Federal Circuit wants the judge to consider writing a new ending for the case. The result may not influence Vizio, a determined fighter of patent trolls, either way. But it will send a signal to others that may be considering a similar path.