IP Newsflash

The Federal Circuit recently ruled that a petitioner in an inter partes review (IPR) proceeding with related district court litigation cannot recover attorneys’ fees under 35 U.S.C. § 285. The Federal Circuit further held that Section 285 does not extend liability for a fee award to counsel.

A district court recently denied a motion for attorney’s fees under 35 U.S.C. § 285 where the defendant successfully invalidated each claim of the patent at issue during an inter partes review proceeding. The district court explained that, because the IPR was voluntarily initiated by the accused infringer, work completed during an IPR is not a patent infringement “case” for § 285 purposes.

The Central District of California recently granted a defendant’s motion for an exceptional case finding and attorney’s fees under 35 U.S.C. § 285. The court held that it could award fees for conduct taking place not only in the district court, but also in a related inter partes review before the Patent Trial and Appeal Board and subsequent appeal before the Federal Circuit. The court found that the plaintiff’s improper and unreasonable conduct in all three venues justified an award of fees.

A federal judge in the Eastern District of Virginia granted defendant Amazon.com, Inc.’s motion for attorneys’ fees under 35 U.S.C. § 285, ordering plaintiff Innovation Sciences, LLC to pay over $700,000 in fees that accrued after the court’s Markman order.

A magistrate judge determined that a prevailing party in a district court litigation could be entitled to an award of attorneys’ fees based solely on conduct during an inter partes review (IPR) proceeding.

Needless to say, a finding of exceptionality under 35 U.S.C. § 285 can have crippling consequences. Just ask Rembrandt Technologies, LP, which recently was slapped with an order to pay the prevailing defendants in a consolidated infringement action roughly $46 million in attorney fees and nearly $5 million in costs.

A district court in Delaware granted defendant Jack Henry & Associates’ motion for attorneys’ fees and ordered plaintiff Joao Bock Transaction Systems to pay $1 million in attorney’s fees under 35 U.S.C. § 285. The order came following the Federal Circuit’s affirmance of the district court’s order invalidating plaintiff’s online-transaction security patent as claiming only an abstract idea. In awarding the fees to Defendant, Judge Robinson stated that “[t]aking into account that patent cases are complex and patent litigation is an expensive proposition, nevertheless, the court will award attorney fees of $1,000,000 to account for the fact that plaintiff's ever changing litigation strategies (including its claim construction positions) created a tortuous path to resolution.”

After the jury returned a defense verdict of non­infringement and invalidity, defendant Cerner Corporation moved for attorneys’ fees under 35 U.S.C. § 285. Cerner argued that the case was exceptional because plaintiff litigated the case in an unreasonable manner and pursued substantively meritless claims. Specifically, Cerner argued that, (1) plaintiff’s indirect infringement theories and validity arguments were completely lacking in substantive strength; and (2) plaintiff litigated this case in an unreasonable manner by (i) dropping all asserted claims of one patent and several of another on the eve of trial; (ii) dropping its willfulness allegations after the Court relied on those allegations to admit a key piece of evidence that painted Cerner in a bad light; and (iii) seeking to change its infringement theory prior to and during trial.