Last year, we posted about a declaratory action brought by Microsoft against WebXchange, which Judge Farnan dismissed for lack of subject matter jurisdiction. There was no case or controversy, because WebXchange had not accused Microsoft of infringement, even though WebXchange has a pending infringement action against several Microsoft customers involving the same patents.
WebXchange then sought fees, based on the fact that Microsoft had brought an earlier declaratory judgment action in the Northern District of California regarding the same patents, which was dismissed for the same reason. WebXchange alleged that, by bringing the Delaware action, Microsoft had acted in bad faith to multiply the proceedings, and that WebXchange is therefore entitled to attorney’s fees under 28 U.S.C. § 1927, FRCP 41(d), and 35 U.S.C. § 285. Last week, Judge Farnan issued a memorandum opinion denying WebXchange’s motion. Microsoft Corp. v. WebXchange, Inc., C.A. No. 09-484-JJF (D. Del. May 31, 2010). Judge Farnan held that Microsoft’s second case was not frivolous, because it was based on different products, and the products in the second case are related to products that WebXchange has accused Microsoft’s customers of infringing in the related case.