“Put simply, Mr. Pirri’s merits briefing far exceeds the bounds of proper decorum.” – CAFC
In 2019, IPWatchdog reported on Lori Cheek, an independent inventor and founder of the dating service, Cheekd, who has spent the last several years defending herself against accusations brought by Alfred Pirri, Jr. of fraud and misappropriation of trade secrets, among other claims. Cheek told us then that she felt like the U.S. patent and legal systems had done her few favors and that she wished she’d never filed for a patent in the first place. This week, however, the U.S. Court of Appeals for the Federal Circuit (CAFC) delivered Cheek a win, affirming a district court’s finding that she is entitled to attorneys’ fees, and additionally ruling that Pirri, through his lawyer, Steven Fairchild, acted egregiously and that “exceptional sanctions” were warranted.
The Cheekd Story
As reported in 2019, Lori Cheek had an idea in 2006 for a unique dating service that she dubbed Cheekd. In 2010, she applied for a patent, which was granted as U.S. Patent No. 8543465 on September 24, 2013. Soon after, out of money and struggling to get her business off the ground, a friend suggested she apply to be a contestant on Shark Tank. She was accepted, and her episode aired in 2014. Though her appearance fell short of success, the show brought much-needed attention to the brand; unfortunately, that included unwanted attention in the form of a lawsuit brought by Pirri in 2017, which was dismissed in pre-trial conference. But then, in 2019, Pirri sued again, this time using new counsel and seeking $5 million.
Essentially, in his first suit, Pirri claimed he had the idea for Cheek’s business in 2006, told his therapist, Joanne Richards, about it in late 2008, and that Richards had then told Cheek—even though both Cheek and Richards had sworn via affidavit that they’d never met each other. He was requesting that the patent be invalidated and that he be awarded punitive and compensatory damages of at least $1 million. “It took more than $50,000 and ten months to get [the case] thrown out in pre-trial conference, but it didn’t go far enough to get thrown out with prejudice,” Cheek told IPWatchdog in 2019.
In the second lawsuit, now represented by Fairchild, Pirri sought to be added to the patent as an inventor and demanded more than $5 million. The district court ultimately granted Cheek’s motions for summary judgment and attorneys’ fees after determining the case was exceptional:
Indeed, in the [district court]’s more than eight-and-one-half years on the bench, Mr. Pirri’s filings stand apart from those of other failed civil plaintiffs for the sheer lack of colorable factual (or legal) support; for their tendentious, bizarre, non-responsive and caustically accusatory arguments; and for their disregard for, and selective presentation of, evidence.
District Court Op. at *11.
Furthermore, because Fairchild, as Pirri’s counsel, “prepared, signed, and filed all the relevant submissions, the district court held that it was appropriate for him to bear the liability for the fees.” Pirri then appealed to the Federal Circuit and Cheek moved for appellate attorneys’ fees and double costs under Federal Rule of Appellate Procedure 38.
‘Egregious’ and ‘Vexatious’ Conduct
The CAFC’s March 22 opinion found that the district court did not abuse its discretion in awarding these fees, recounting the many “outlandish accusations” the court cited to support such a finding, and said that: “Having dealt with Mr. Pirri at every stage, the district court was in the best position to evaluate whether fees were warranted. And we see no reason to set aside the district court’s exercise of its discretion on that point.”
As to Cheek’s request for appellate fees and double costs relating to the Federal Circuit appeal, the CAFC agreed with Cheek that Pirri’s appeal was “frivolously argued” and held Fairchild jointly and severally liable for those fees. The CAFC explained:
Through his counsel, Mr. Pirri distorts the factual and legal bases for the district court’s fee award. He characterizes the district court as ruling on issues never raised or addressed below. And he leverages inapposite legal doctrines to make arguments that can only be described as baffling. Put simply, Mr. Pirri’s merits briefing far exceeds the bounds of proper decorum.
The CAFC went on to cite several examples of Pirri’s mischaracterizations and distortions of fact and law, including, for instance, Pirri’s contention that “the [l]ower [c]ourt violated Second Circuit case law on sanctions against attorneys” because it didn’t provide notice that it may sanction Fairchild, despite Cheek’s motion for fees clearly stating that it sought fees from Fairchild personally.
Ultimately, the CAFC said:
We do not award sanctions lightly, but Mr. Pirri’s conduct, effected through his counsel, is egregious. And it justifies such exceptional sanctions. Because Mr. Pirri’s vexatious conduct flowed through his counsel, we hold Mr. Pirri and Mr. Fairchild jointly and severally liable.
Following the decision, Cheek told IPWatchdog, “Although it’s come to an end and I ‘won,’ I still feel such a huge loss. It’s been such an unfathomable ride.”
In a March 22 letter to the court, Fairchild indicated that he will need a payment plan to send the balance of the double costs award to Cheek.