February 19, 2025
DMF vs. ELCO: The High Cost of Enforcing Patents
DMF wins injunction and a mere $16K, but could swallow millions in legal fees
A long-running patent dispute between DMF, Inc. and ELCO Lighting has reached a conclusion — at least for now. DMF secured a permanent injunction against ELCO and was awarded $15,941 in damages. However, the financial toll of this six-and-a-half-year legal battle likely far exceeds that amount, and DMF has indicated that it will seek attorneys’ fees totaling in the millions. Whether those fees will be awarded remains uncertain, as the court has yet to rule on the matter.
ELCO has argued that the judge previously indicated skepticism about awarding attorneys’ fees to DMF. In its filings, ELCO pointed to prior court statements suggesting neither side had a particularly strong case and that both engaged in aggressive litigation tactics. However, the court has not issued a final ruling on whether this qualifies as an “exceptional case” under 35 U.S.C. § 285. DMF, maintaining that its enforcement efforts justify recovering legal costs, continues to push forward with its motion.
What Was at Stake?
At the core of the case was U.S. Patent No. 9,964,266, covering DMF’s LED module technology. The court ruled that ELCO infringed multiple claims of the patent by selling certain versions of its Residential ELL LED Module products. However, ELCO was not found to have willfully infringed, which weakens DMF’s argument for attorneys’ fees. Additionally, ELCO’s second corporate entity, ELI, was found not to infringe at all.
Above: Excerpts from original 2018 complaint
The court’s ruling bars ELCO from selling infringing products going forward, effectively removing them from the market. That injunction may prove far more valuable to DMF than the modest damages awarded.
The Fight for Legal Fees
DMF is now seeking to recoup millions in attorneys’ fees, arguing that this case qualifies as “exceptional” under 35 U.S.C. § 285, which allows courts to shift legal costs in rare circumstances. ELCO contends that the judge previously indicated skepticism about granting fees, pointing to statements that both parties engaged in unreasonable litigation conduct and that the case was not particularly one-sided. However, the court has not made a final ruling on DMF’s motion, and the outcome remains uncertain.
ELCO is actively opposing DMF’s motion for attorneys’ fees, arguing that DMF has had more than seven months to prepare its request and that both sides engaged in unreasonable litigation behavior. ELCO also claims that if attorneys’ fees were not at issue, it may not have pursued further legal action, and it is pushing for a swift resolution to inform its decision on a potential appeal. The court has yet to formally weigh in on whether the case meets the "exceptional" standard required to justify fee shifting.
Prevailing in the case alone doesn't automatically make it "exceptional." DMF would need to show something more, perhaps that the defendant's positions were particularly weak, that they engaged in litigation misconduct, or that the case stands out in some other way from typical patent cases.
Why Enforce a Patent at This Cost?
With such limited financial damages and an uncertain shot at legal fees, why would DMF pursue a lawsuit that has stretched nearly seven years? The answer seems to lie in long-term strategy rather than short-term financial gain.
- Protecting Market Share – The injunction prevents ELCO from selling the disputed products, preserving DMF’s competitive advantage.
- Sending a Message – Enforcing patents, even at high cost, discourages future infringement from competitors.
- Strengthening IP Valuation – Patent enforcement reassures investors or future buyers that the company’s intellectual property is actively defended.
- Legal Precedent – A court ruling affirming DMF’s patent strengthens its position in future licensing or infringement disputes.
In some cases, the real win in patent litigation isn’t the damages — it’s a market statement. For DMF, keeping its technology exclusive and protected may provide future value that is hard to quantify.
Lessons for the Lighting Industry
The DMF vs. ELCO case highlights the realities of patent enforcement:
- Legal battles are costly – Even with a favorable ruling, recovering fees is far from guaranteed.
- Injunctions can be more valuable than damages – Stopping a competitor may be the real prize in a lawsuit.
- Recovering legal costs is difficult – Courts rarely award attorneys’ fees unless the case meets a high threshold of exceptionality.
DMF has won a key legal battle, but the financial impact remains to be seen. Whether the court ultimately grants legal fees — or leaves DMF to swallow the costs of a long and costly fight — may influence how other lighting companies approach patent enforcement in the future.
