“Exceptional Case”: Factors For And Against

  • Inequitable Conduct Finding Supports Exceptional Case Finding: “Prevailing on a claim of inequitable conduct often makes a case ‘exceptional,’ leading potentially to an award of attorneys’ fees.” Therasense (Fed. Cir. 05/25/11) (en banc); Brasseler (Fed. Cir. 10/09/01) (aff’g award of attorney fees to defendant (who had already won case on “on sale bar”) based primarily on patent owner’s inequitable conduct in failing to disclose “on sale bar” evidence to PTO); Energy Heating (Fed. Cir. 05/04/18) (remanding denial of fees motion; requiring explanation why fees not awarded where inequitable conduct was found). Whether challenger must show materiality and intent by “clear and convincing” or “preponderance” standard when seeking fees based on inequitable conduct, is a “thorny issue.” In re Rembrandt Tech. (Fed. Cir. 08/15/18) (aff’g exceptional case finding under either standard and not deciding this issue).
  • Patent Owner Failure To Consider Allegedly Anticipatory Prior Art Supports Exceptional Case Finding: Patent owner’s failure to assess prior art presented by defendant as allegedly anticipating the claims, supports an exceptional case finding. Rothchild (Fed. Cir. 06/05/17) (rev’g refusal to award fees, based on vexatious litigation against others and lack of supporting evidence for patent owner’s allegations of good faith).
  • May Base Fees Award On Vexatious Litigation Conduct: Ct. did not overturn Fed. Cir.’s precedents (including Monolithic (Fed. Cir. 08/13/13) (patentee misrepresented date of key evidence, and tried to mask false testimony); MarcTec (Fed. Cir. 01/03/12) (patentee misrepresented law of claim construction and the court’s constructions); Eon-Net (Fed. Cir. 07/29/11) (patentee lodged incomplete and misleading extrinsic evidence)) for basing exceptional-case determination on unreasonable and vexatious litigation tactics. SFA Sys. (Fed. Cir. 07/10/15) (aff’g denial of attorney fees).
  • Surviving Summ. J., Or Absence Of Sum. Jud. Motion, Is Factor Against Exceptional Case Finding: “‘Absent misrepresentation to the court, a party is entitled to rely on a court’s denial of summary judgment and JMOL . . . as an indication that the party’s claims were objectively reasonable and suitable for resolution at trial.’” Checkpoint Sys. (Fed. Cir. 06/05/17) (rev’g award of fees against patent owner who lost on all issues at jury trial). See Prism Tech. (Fed. Cir. 06/23/17) (non-precedential) (challenger’s failure to move for Summ. J. of non-infringement belies contention that infringement allegation was exceptional).