Bayer Cropscience Ag v. Dow Agrosciences LLC, 851 F.3d 1302

Bayer sued Dow for patent infringement over soybeans engineered with Bayer’s dmmg gene; dispute centered on scope of a license Bayer granted to MS Tech and whether MS Tech (and thus Dow via sublicense) had commercialization rights.
The parties agreed English law governed the license; under English law extrinsic "factual matrix" is relevant to contract interpretation.
The district court granted summary judgment to Dow, a decision affirmed on appeal (Bayer I), holding the MS Tech license conveyed commercialization rights.
After judgment, the district court (adopting a magistrate judge’s report) awarded Dow attorney fees under 35 U.S.C. § 285, finding the case "exceptional" based on the merits positions and Bayer’s litigation conduct.
The district court cited Bayer’s internal testimony and contemporaneous documents undermining Bayer’s contract interpretation, Bayer’s lack of pre‑suit diligence, filing a preliminary injunction during discovery that contradicted its witnesses, and inconsistent positions across related proceedings.
Bayer appealed the § 285 fee award; the Federal Circuit reviewed for abuse of discretion and affirmed the fee award.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the case was "exceptional" under 35 U.S.C. § 285	Bayer: its contract interpretation was objectively reasonable and not exceptional	Dow: Bayer’s position was contradicted by record evidence and its conduct was unreasonable, supporting fees	Court: Affirmed; totality of circumstances made the case exceptional under Octane Fitness and Highmark (no abuse of discretion)
Whether Bayer’s merits position was objectively reasonable	Bayer: expert and textual arguments supported its reading of the license	Dow: contemporaneous testimony and documents (factual matrix) showed Bayer’s reading was implausible	Court: Bayer’s merits position was undermined by its own witnesses and evidence; merits reasonableness not dispositive under Octane Fitness
Whether Bayer conducted adequate pre‑suit investigation	Bayer: implied its case was proper to file	Dow: Bayer failed to investigate its own easily obtainable evidence that contradicted its claims	Court: Bayer’s lack of pre‑suit diligence was a permissible factor supporting exceptional finding
Whether seeking a preliminary injunction was proper	Bayer: sought injunction to prevent commercialization; timing was defensible	Dow: motion was filed amid discovery that would rebut Bayer and thus was frivolous and increased costs	Court: Motion was frivolous in context and supported fee award; district court did not abuse discretion

Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014) (defines "exceptional" and directs totality‑of‑circumstances test for § 285)
Highmark Inc. v. Allcare Health Management System, Inc., 134 S. Ct. 1744 (2014) (authorizes abuse‑of‑discretion review of district courts’ § 285 determinations)
Gen. Elec. Co. v. Joiner, 522 U.S. 136 (1997) (explains deference inherent in abuse‑of‑discretion review)
Lumen View Tech. LLC v. Findthebest.com, Inc., 811 F.3d 479 (Fed. Cir. 2016) (approves consideration of pre‑suit diligence in § 285 analysis)
Murata Machinery USA, Inc. v. Daifuku Co., 830 F.3d 1357 (Fed. Cir. 2016) (characterizes preliminary injunction as an extraordinary remedy requiring likelihood of success)
Mentor Graphics Corp. v. Quickturn Design Sys., Inc., 150 F.3d 1374 (Fed. Cir. 1998) (describes abuse‑of‑discretion standard and review limits)