Vidal Awards VLSI Attorney Fees for OpenSky Abuse

U.S. Patent and Trademark Office (USPTO) Director Kathi Vidal on Monday made public an order from December awarding VLSI Technology LLC $413,264.15 for “time spent addressing OpenSky’s abusive behavior” in a years-long and circuitous case between the two companies.

Vidal first issued her precedential Director review ruling in October 2022, holding that inter partes review (IPR) petitioner OpenSky Industries, LLC abused the IPR process in its conduct with patent owner, VLSI Technology LLC, and sanctioning OpenSky by excluding it from the IPR proceedings by relegating it to be a “silent understudy” in the proceedings and “temporarily elevating Intel to the lead petitioner.”

Then, in December 2022, Vidal affirmed the Patent Trial and Appeal Board’s decision on remand from that order, which found that OpenSky’s case, now with Intel in the role of lead petitioner, was compelling and meritorious and also dismissed OpenSky from the case “to ensure that OpenSky does not benefit from its abuse of the IPR process.”

But in February 2023, Vidal issued an order restoring OpenSky as a party to the IPR and awarding reasonable attorney fees to VLSI as sanctions against OpenSky.

Both OpenSky and VLSI appealed to the CAFC, and the court remanded the proceedings back to the USPTO in December 2023.

OpenSky objected to VLSI’s requested fee award, arguing that its submitted evidence did not comply with the applicable Federal Rules of Evidence, statute and the Code of Federal Regulations. But Vidal rejected OpenSky’s arguments as to most of the evidence and dismissed as moot the rest.

OpenSky also argued that some of the Exhibits submitted by VLSI to support prevailing market rates for comparably experienced attorneys handling PTAB proceedings exceeded the scope of the permissions permitted by Vidal’s May Order. But Vidal said she did not rely on those Exhibits in reaching her decision and that OpenSky’s arguments were “not well-taken,” ultimately dismissing the request to expunge those exhibits as moot.

Finally, OpenSky maintained that VLSI had “unclean hands” due to its misconduct in another proceeding, but Vidal was not persuaded. She alluded to a separate paper from December 2022 addressing VLSI’s alleged misconduct but said “I do not agree that VLSI’s alleged misconduct excuses OpenSky’s abusive behavior.”

In that decision, Vidal ordered VLSI “to show cause as to why it should not be ordered to pay Intel the reasonable attorney fees they incurred responding to VLSI’s Rehearing Request.”

VLSI had attempted to argue that the PTAB’s ruling was inconsistent, ignored facts, and relied on inadmissible hearsay. However, Director Vidal was “not persuaded by these arguments,” and she “admonish[ed] VLSI and its counsel for supporting their arguments with misleading statements of law and fact.”

VLSI had requested a total of $489,511.15. in attorney’s fees, but Vidal ultimately excluded any fees for “’Pre-Institution Activities’ (amounting to $66,117.65) and any activities outside the IPR and Director Review proceedings (amounting to $10,129.35).”

Image Source: Deposit Photos
Author: iqoncept
Image ID: 59573067