In Intellectual Ventures v. Trend Micro, the Federal Circuit remanded a case to the district court to reconsider Trend Micro's attorney fees award under the proper legal standard.
Under 35 USC § 285, a court may award attorney fees to the prevailing party in "an exceptional case." An exceptional case stands out from others with respect to the (1) strength of a party’s litigating position (considering the law and facts) or (2) unreasonable manner in which the case was litigated.
Intellectual Ventures (IV) sued Trend Micro and Symantec for infringement of US patents, including US Patent No. 6,460,050, related to filtering data files (e.g., email messages).
The Symantec action proceeded first. During the claim construction and throughout pretrial IV's expert opined the "characteristic" of documents in claims should be interpreted as including "bulk email." After the court adopted the expert's opinion, the expert changed his opinion after he talked to IV's attorneys.
After the Symantec trial was complete, Trend Micro moved for clarification on claim construction and the IV attorney argued the expert's opinion had not changed. Trend Micro then moved for attorney fees due to the expert's changed opinion. The district court granted attorney fees of $444,051. It didn't appreciate the expert's last minute change and the attorney arguing nothing had changed.
The Federal Circuit vacated the attorney award stating the court must determine whether the case overall is exceptional not whether an isolated action is exceptional. Notably, the district court granted attorney fees, but conceded IV's case was not overall unreasonable. The district court relied on the circumstances surrounding the changed expert's opinion alone.
I agree that isolated mistakes must be viewed within the totality of the circumstances. Experts may change opinions and attorneys misstate their position, but the court must consider whether the overall case and manner of litigation is reasonable before granting attorney fees. Otherwise, it encourages parties to seek attorney fees for isolated acts that are "exceptional" with respect to the overall case.
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