MGA Pays $2 Million in Legal Fees in Board Game Patent Infringement Case

Posted on May 28th, 2014 by Legal Fee Advisors

In a Law360 article dated May 6, 2014, by Allissa Wickham, it was reported that Innovention Toys LLC was awarded an increase of approximately $260,000 in attorneys’ fees in its patent infringement case against MGA Entertainment Inc. The subject of the case is a patent held by Innovention’s for a “light reflecting board game” called “Khet” which MGA knowingly copied to create its own competing game called Laser Battle. MGA sold the game through its co-defendants Wal-Mart Stores Inc. and Toys ‘R’ Us Inc., until an injunction barred sales of Laser Battle.[1]

Innovention requested the additional attorneys’ fees, arguing that it had incurred further costs since U.S. District Judge Susie Morgan found that MGA had wilfully infringed on Innovention’s patent in 2012. While Innovention argued that their request was routine, MGA challenged by claiming that the additional fees went “far beyond” the scope of winding down the case, and were much higher than rates usually awarded to patent litigators in the Eastern District Court of Louisiana. [2]

Although the additional fees were found to be reasonable and permissible by Judge Morgan, they were reduced by 10 percent because attorneys for Innovention did not provide sufficient evidence in support of their bills, according to the order. These fees are in addition to the $1.6 million attorneys’ fees previously awarded by the court to Innovention because MGA engaged in so-called misconduct during the case.

According to Judge Morgan, “MGA engaged in misconduct throughout this litigation and employed particularly aggressive tactics immediately prior to and during trial.”[3] Consequently, since 35 U.S. Code § 285 is intended to discourage parties from wasting the court’s resources with superfluous litigation tactics, the court exercised its discretion, and deemed that an award of attorneys’ fees was appropriate in this case.

What can be learned from this case? First off, this is a perfect case to warn litigants from engaging in purported misconduct or run the risk of paying for it, literally. Secondly, we now know that legal fees may be awarded under 35 U.S. Code § 285 in patent litigation cases not only for bringing frivolous lawsuits but for engaging in misconduct such as filing untimely objections, withholding pertinent documents until ordered to produce them and unnecessarily delaying the proceedings with similar tactics. Lastly, this case emphasizes the importance of keeping accurate billing records that can be justified and commensurate with actual time spent working on the case.

A. Vays

Legal Fee Advisors © 2014

[1] Davis, Ryan (February 26, 2014) “MGA Told To Pay $2M In Legal Fees In Board Game IP Case”. Law 360 Retrieved May 14, 2014

[2] Wichham, Allissa (May 6, 2014) “MGA Hit With More Legal Fees In Board Game Patent Suit”. Law360 Retrieved May 14, 2014

[3] Innovention Toys, LLC v. MGA Entertainment, Inc., 637 F.3d 1314 (Fed. Cir. 2011)

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