ADS Defeats Patent Troll in Court, Reimbursed Attorneys’ Fees

After initially having its cross-motion denied by a Texas court, the Federal Circuit reversed the decision citing an abuse of discretion.

TYLER, Texas – The U.S. Court of Appeals for the Federal Circuit has ruled in favor of ADS Security after the Eastern District Court of Texas denied an appeal to award Rothschild Connected Devices Innovations ADS’s attorneys’ fees.

Rothschild sued ADS for infringement of its U.S. Patent No. 8,788,090. The broadly worded patent is for “a system and method for creating a personalized consumer product,” according to Rothschild Connected Devices Innovations, LLC v. Guardian Protection Services, Inc.

ADS offered to settle the case if Rothschild covered the $43,330 in ADS’s attorneys’ fees and costs, however Rothschild rejected the offer.

The security company then sent Rothschild a notice pursuant to Federal Rule of Civil Procedure 11(c)(2) (“Safe Harbor Notice”). Rothschild then voluntarily moved to dismiss its action. However, ADS opposed and filed a cross-motion for attorney fees.

The District Court granted Rothschild’s motion to dismiss but denied ADS’s cross-motion for attorneys’ fees. The Federal Circuit then reversed the lower courts decision, citing that the denial of attorneys’ fees was an abuse of discretion.

“It is a shame that companies are forced to have to decide whether to cave to demands by holders of illegitimate patents or face protracted and expensive litigation to fight,” John Cerasuolo, president of ADS Security told SSI. “We are proud of the role we played in exposing this charade and are pleased with the vindication of the Federal District Court ruling.”

Rothschild has gone after multiple companies for infringing its broad patent, including ADT, LG and Cisco.

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