Raniere v. Microsoft Corp., Nos. 2017-1400, 2017-1401, 2018 U.S. App. LEXIS 9775 (Fed. Cir. Apr. 18, 2018) (Before Lourie, O’Malley, and Wallach, J.) (Opinion for the court, O’Malley, J.).
The Federal Circuit affirmed a district court’s award of attorney’s fees to Appellees Microsoft and AT&T (collectively, “Microsoft”). Raniere sued Microsoft for patent infringement, claiming to be the owner of the asserted patents. However, Raniere previously assigned his rights in the patents to a third party, which dissolved before suit. Raniere argued that the rights had been transferred back to him, but was unable to provide any proof. Microsoft filed a motion to dismiss for lack of standing, and the district court dismissed the case with prejudice.
The district court awarded attorney’s fees to Microsoft pursuant to 35 U.S.C. § 285, which allows fees to be awarded to the prevailing party in “exceptional cases.” The district court found that Microsoft was a prevailing party under § 285 because “[a] dismissal with prejudice alters the relationship between the parties and is sufficient to confer prevailing party status for purposes of considering a claim for fees under section 285.” The district court also found that the case was exceptional because Raniere engaged in a pattern of bad faith conduct that demonstrated the case was litigated in an “unreasonable manner.”
On appeal, the Federal Circuit found that that the district court did not abuse its discretion in its “prevailing party” analysis. Rather, Microsoft “won” when the district court dismissed Raniere’s case with prejudice, which prevented Raniere from “achieving a material alteration of the relationship between [the parties].” When the district court’s dismissed Raniere’s case with prejudice, it gave Microsoft the full relief to which it was legally entitled, and it, therefore, was a prevailing party.
The Federal Circuit also affirmed that the case was exceptional under § 285 because the court properly examined the totality of the circumstances in making its determination that Raniere litigated the case in an unreasonable manner.
If an action is dismissed with prejudice for lack of standing, the defendant will be considered the prevailing party and attorney’s fees can be awarded under 35 U.S.C. § 285.