Highmark, Inc. v. Allcare Health Management Systems, Inc.
701 F.3d 1351
Fed. Cir.
2012

Background

  • This is a concurrence/dissent addressing denial of rehearing en banc in Highmark, Inc. v. Allcare Health Mgmt. Sys. (patent case).
  • Disagreement centers on the proper standard of review for §285 exceptional-case determinations and the related objective baselessness inquiry.
  • The majority adopts de novo review for objective baselessness in §285; the dissent argues for deferential, clear-error review.
  • Key authorities discussed include PRE (Professional Real Estate Investors v. Columbia Pictures), Seagate, Bard, and Bard’s relation to Highmark.
  • The discussion emphasizes that claim construction and other factual/legal questions should not be recharacterized as pure legal questions for de novo review.
  • The issues often involve large potential sanctions, so deference to the district court’s factual findings is argued as appropriate by the dissent.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Standard of review for objective baselessness under §285 Highmark argues de novo review for objective baselessness Moore argues deference; clear-error review Deferential (clear-error) review urged by dissent
Relation to PRE, Bard, and Seagate standards Highmark relies on de novo approach post-Bard/Highmark Moore contends PRE/Seagate require mixed approach; not universal de novo Dissent favors adherence to established precedent; not a broad de novo rule
Role of the trial court vs. appellate review Trial court findings should control; deference warranted Appellate court can review de novo on law questions; not pure fact-finding Deference to trial court maintained; mixed questions remain factual in nature

Key Cases Cited

  • Professional Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49 (U.S. 1993) (decision on objective baselessness and probable cause in sanctions context)
  • Seagate Tech., LLC, 497 F.3d 1360 (Fed.Cir. 2007) (en banc; objective baselessness in willful infringement context)
  • Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 682 F.3d 1003 (Fed.Cir. 2012) (de novo review for objective recklessness in willfulness")
  • Highmark, Inc. v. Allcare Health Mgmt. Sys., Inc., 687 F.3d 1300 (Fed.Cir. 2012) (discusses de novo vs clear-error standard for §285)
  • Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed.Cir. 1998) (claim construction as a merits-based legal question)
  • Scott v. Harris, 550 U.S. 372 (U.S. 2007) (pure question of law after facts found in record)
  • Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (U.S. 1990) ( Rule 11 and abuse of discretion review; district court better positioned to apply fact-dependent standards)
  • Meyer Intellectual Props., Ltd. v. Bodum, Inc., 690 F.3d 1354 (Fed.Cir. 2012) (precedent on §285 practices)
  • i4i Ltd. P'ship v. Microsoft Corp., 598 F.3d 831 (Fed.Cir. 2010) (enhanced damages precedents)
  • Krippelz v. Ford Motor Co., 667 F.3d 1261 (Fed.Cir. 2012) (examples of enhanced damages)
  • Brooks Furniture Mfg., Inc. v. Dutailier Int'l, Inc., 393 F.3d 1378 (Fed.Cir. 2005) (two-prong §285 exceptional-case test)
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