Gaymar Industries, Inc. v. Cincinnati Sub-Zero Products, Inc.
790 F.3d 1369
| Fed. Cir. | 2015Background
- Gaymar owned U.S. Patent No. 6,517,510 covering a patient temperature-control system and sued Cincinnati Sub‑Zero Products, Inc. (CSZ) for infringement and sought a preliminary injunction in 2008.
- CSZ filed an inter partes reexamination request asserting invalidity based on prior art (MT‑II description and the SARNS manual); the PTO rejected all claims and ultimately cancelled the patent after Gaymar abandoned appeal.
- The district court denied Gaymar’s preliminary injunction, stayed the action pending the PTO reexamination, and later lifted the stay after the PTO cancelled the claims; CSZ then moved for attorney’s fees under 35 U.S.C. § 285.
- The magistrate judge and district court found Gaymar’s position not objectively baseless and denied fees, partly because they concluded CSZ engaged in litigation misconduct; CSZ sought reconsideration after Octane Fitness.
- On appeal, the Federal Circuit affirmed the district court’s finding that Gaymar’s position was not objectively baseless, but held the district court clearly erred in characterizing CSZ’s filings as misconduct (they amounted to sloppy overstatements, not misrepresentations).
- The Federal Circuit reversed the denial of fees to the extent it relied on CSZ’s alleged misconduct, and remanded for reconsideration under Octane’s totality‑of‑the‑circumstances standard (the district court may still deny fees on other grounds).
Issues
| Issue | Plaintiff's Argument (Gaymar) | Defendant's Argument (CSZ) | Held |
|---|---|---|---|
| Whether Gaymar’s litigation position was objectively baseless such that the case is "exceptional" under § 285 | Gaymar contended its position had arguable legal and factual support and was not frivolous despite PTO cancellation | CSZ argued Gaymar knew of the key prior art and pursued meritless claims, so fees should be awarded | Court: Affirmed district court — Gaymar’s position was not shown objectively baseless; fee award not automatic from losing at PTO |
| Proper legal standard for § 285 after Octane | Gaymar urged application of Octane’s totality‑of‑circumstances and that objective baselessness was lacking | CSZ urged reconsideration under Octane to obtain fees | Court: Octane controls; district court applied totality test but may consider objective reasonableness among other factors |
| Whether CSZ engaged in litigation misconduct that should bar its fee request (unclean hands) | Gaymar relied on district court’s findings that CSZ misrepresented positions and shifted theories | CSZ argued its statements were at most overstatements or clarifications, not misconduct | Court: District court clearly erred — examples were sloppy advocacy, not misrepresentation; misconduct finding reversed |
| Remedy and remand scope | Gaymar argued denial of fees should be upheld | CSZ sought reversal to obtain fees | Court: Reverse portion of denial premised on CSZ misconduct and remand for district court to reconsider fee request under Octane; district court may still deny fees based on totality, including Gaymar’s non‑baseless position |
Key Cases Cited
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014) (abandoning rigid Brooks Furniture test and directing district courts to apply a totality‑of‑the‑circumstances standard for § 285 fee awards)
- Monolithic Power Sys. v. O2 Micro Int’l Ltd., 726 F.3d 1359 (Fed. Cir. 2013) (standards of review for exceptional‑case determinations)
- Highmark, Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S. Ct. 1744 (2014) (appellate review of exceptional‑case determination is for abuse of discretion)
- Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378 (Fed. Cir. 2005) (prior two‑prong test for exceptional cases, disapproved by Octane)
- Nutrition 21 v. United States, 930 F.2d 867 (Fed. Cir. 1991) (patentee’s burden at preliminary injunction stage when alleged infringer raises substantive validity issues)
- Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372 (Fed. Cir. 2009) (allocation of burdens on validity at preliminary injunction stage)
- Abbott Labs. v. Andrx Pharms., Inc., 473 F.3d 1196 (Fed. Cir. 2007) (defendant bears burden to raise substantial question of invalidity to defeat preliminary injunction)
- PHG Techs., LLC v. St. John Cos., 469 F.3d 1361 (Fed. Cir. 2006) (same principle regarding preliminary injunction validity showing)
- Sundance, Inc. v. DeMonte Fabricating Ltd., 550 F.3d 1356 (Fed. Cir. 2008) (limitations on appropriate use of certain types of experts in patent cases)