Posts Tagged: "35 USC 285"

Avid sought fees as a prevailing party under § 285, and therefore the attorney’s fees in this action were properly characterized as an equitable remedy, properly decided by a judge. AIA argued that when an award of attorney’s fees is based in part or in whole on a party’s state of mind, intent, or culpability, only a jury may decide those issues. The Court rejected this argument because AIA provided no cases holding that once an issue is deemed equitable, a Seventh Amendment right to a jury trial may still attach to certain underlying determinations.

The district court made clearly erroneous factual findings that independently supported reversal. Particularly, the record supported a finding that this case was exceptional given the weakness of AdjustaCam’s litigating position. The evidence offered by AdjustaCam showed that its lawsuit was baseless. However, the district court instead found that AdjustaCam’s litigation position was not exceptional because Newegg’s ball-and-socket products were constrained in such a way that AdjustaCam could reasonably argue that it rotated on a single axis, consistent with the original district judge’s Markman order. But the Court pointed out that AdjustaCam never advanced this argument.

In the Federal Circuit case of Checkpoint Systems v. All-Tag Sec, The Federal Circuit held that the district court erred in finding this case exceptional under 35 U.S.C. § 285, and it reversed its award of attorney fees to the defendants. The record showed that the plaintiff’s charge of infringement was reasonable and the litigation was not abusive or brought in bad faith.

In conclusion, the Court held the district court did not abuse its discretion in determining that, under the totality of circumstances, this was an exceptional case, and affirmed the district court’s grant of § 285 fees… The Supreme Court’s totality of the circumstances analysis for fees under § 285 is a “holistic and equitable approach in which a district court may base its discretionary decision on other factors, including the litigant’s unreasonableness in litigating the case, subjective bad faith, frivolousness, motivation, and ‘the need in particular circumstances to advance considerations of compensation and deterrence.’”

The Federal Circuit recently issued a non-precedential decision in a patent infringement action involving American pop music stars Justin Timberlake and Britney Spears and their production companies. The Federal Circuit’s decision vacated an earlier award of attorneys’ fees to Timberlake, Spears and the other defendants based on a finding that the case was exceptional within the meaning of 35 U.S.C. 285. The per curiam decision from the panel made up of Judges Moore, Linn and O’Malley explained that certain of the factors relied upon by the district court to find this case to be exceptional were entitled to no weight under § 285. Thus, the attorneys’ fee order of the district court was vacated and the case remanded for further proceedings.

In rejecting the objective prong of Seagate, the Court rejected the notion that a defendant may escape the specter of enhanced damages by asserting a defense that the defendant was unaware of at the time the infringement occurred. For example, the Court pointed out that under the Seagate test, “[t]he existence of . . . a defense insulates the infringer from enhanced damages, even if he did not act on the basis of the defense or was even aware of it.” Halo at 10. But, as the Court stated, “culpability is generally measured against the knowledge of the actor at the time of the challenged conduct.” Id. Moreover, in response to an argument by Pulse based on the Court’s earlier Safeco decision, the Court held that “[n]othing in Safeco suggests that we should look to facts that the defendant neither knew nor had reason to know at the time he acted.” Id. at 11.

Essentially, the Supreme Court told the Federal Circuit that they needed remedial reading lessons. The statute is clear: “may” means district courts have discretion. The Supreme Court also seemed instruct the Federal Circuit to stop making stuff up that clearly isn’t found within the statute. It is truly ironic, even downright funny, how the Supreme Court can so clearly see that the Federal Circuit is not being true to the simple, easy to understand, straight-forward terms of a statute but at the same time lack the capacity to similarly see that they are themselves doing the very same thing. If intellectual honesty means anything the Supreme Court would hold themselves to the same standard and stop applying judicial exceptions to patent eligibility that enjoy no textual support in the statute.