CAFC Affirms District Court Denial of Attorney Fees Where There Was No Final Court Decision

In O.F. Mossberg & Sons, Inc. v. Timney Triggers, LLC, the U.S. Court of Appeals for the Federal Circuit (CAFC) affirmed a district court decision that held Timney Triggers, LLC was not a “prevailing party” for purposes of collecting attorney fees under Section 285. In particular, the CAFC concluded that there was no final court decision capable of establishing the required judicial imprimatur, so there was no prevailing party.

District Court and Patent Office Proceedings

In February 2012, Mossberg sued Timney for infringement of its patent U.S. Patent No. 7,293,385 (the ‘385 patent). In response, Timney filed for inter partes reexamination of the ’385 patent with the U.S. Patent and Trademark Office (USPTO) and requested a stay of the district court proceedings. The USPTO vacated the institution of the inter partes reexamination because Timney had not identified a real party in interest. Over the next year and a half, Timney filed three ex parte reexamination requests, wherein the examiner in the third request rejected all pending claims over the cited prior art. The Patent Trial and Appeal Board (PTAB) affirmed the invalidity of all the claims. Throughout the reexamination proceedings, Mossberg filed several motions to lift the stay, but the district court maintained it.

Mossberg filed a notice of voluntary dismissal under Rule 41(a)(1)(A)(i), which provides for voluntary dismissal by the plaintiff without a court order, and the district court dismissed the case without prejudice. Following dismissal, Timney filed a motion to declare the case exceptional under 35 U.S.C. § 285, which states that the “court in exceptional cases may award reasonable attorney fees to the prevailing party.” The district court denied the motion, stating that Timney was not a “prevailing party” because a “Rule 41 dismissal without prejudice is not a decision on the merits and thus cannot be a judicial declaration altering the legal relationship between the parties.” Timney appealed to the CAFC.

Federal Circuit: There Was No Final Decision

Reviewing the term “prevailing party” de novo, the CAFC explained that a decision on the merits is not necessary to qualify as a prevailing party. Citing Raniere v. Microsoft Corp. and B.E. Tech. L.L.C. v. Facebook, Inc., the CAFC noted that prevailing parties have been found in cases where “the district court dismissed a plaintiff’s claims for lack of standing” and where there was “dismissal for mootness.” However, the CAFC reasoned that the issue in the present case was not whether there was a final decision on the merits, but rather whether there was a final decision at all.

The CAFC concluded that there was no such final decision in this case because a Rule 41(a)(1)(A)(i) voluntary dismissal becomes effective immediately upon plaintiff’s filing of the notice of dismissal “without a court order.” Further, the stay that was maintained by the district court did not qualify as a final decision because it cannot and did not change the legal relationship of the parties. Thus, since there was no final court decision and Timney was not a prevailing party for purposes of attorney’s fees, the CAFC affirmed the district court’s decision.