Federal Circuit Affirms District Court Limiting the Number of Claims a Patentee Can Assert–Stamps.com Inc v. Endicia, Inc.

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

In an interesting nonprecedential opinion issued this week in Stamps.com Inc. v. Endicia, Inc. (No. 10-1328), the Federal Circuit affirmed (among other things) the District Court’s decision to limit the number of claims a patentee could bring against an accused infringer. The Court held that the District Court did not abuse its discretion in arbitrarily limiting Stamps.com to asserting 15 claims against Endicia, as long as the District Court gave the patentee an opportunity to assert additional claims for good cause shown. While not a ground-breaking decision, the case is instructive for parties involved in litigating large numbers of patent claims.

The Case Below

Stamps.com sued Endicia for allegedly infringing 629 claims in 11 patents. Endicia moved the court to limit the number of claims, and the court agreed, limiting Stamps.com to 15 claims. The court did state, however, that it would remain flexible and revisit the limitation if Stamps.com could show good cause for needing to assert additional claims. The court then construed 10 claim terms in 15 claims from 7 patents. After briefing on summary judgment, the court invalidated the 7 claims.

Stamps.com then moved the court to pursue additional claims, which the court denied when it granted judgment for Endicia. Stamps.com appealed to the Federal Circuit, which affirmed and rejected Stamps.com’s challenge to the court’s 15-claim limitation, because of the “good cause” outlet the District Court provided.

Take Aways From This Case

This case confirms that trial courts have great discretion to manage their dockets, including limiting the number of claims that can be adjudicated, as long as the court provides some mechanism for a patentee to show good cause for adding additional claims. Thus, a defendant faced with allegations that it infringes hundreds or thousands of claims should consider moving the court to limit the number to a more manageable amount. At the same time, a patentee that finds itself limited to a subset of claims should take care to both choose the best claims to assert and be ready to show good cause for why additional claims may be necessary. Unfortunately, the Court did not identify what “good cause” would be sufficient to expand the number of claims asserted. Nonetheless, a patentee should begin to develop facts and arguments to be ready to use, if necessary.