944 F.3d 1380
Fed. Cir.2019Background:
- Intellectual Ventures I LLC sued Trend Micro and Symantec for patent infringement of multiple patents including U.S. Patent No. 6,460,050 (the ’050 patent), which uses the term “characteristic” in asserted claims.
- The district court severed Trend Micro and Symantec claims and adopted claim constructions (including for “characteristic”) in both actions based on Intellectual Ventures’s proposed constructions.
- At the Symantec trial, Intellectual Ventures’s expert testified at trial that his prior position had changed—specifically that “bulk email” was not a characteristic under claim 9—and said he changed his opinion after preparing with counsel.
- After that trial, the district court revised its constructions to explicitly include “bulk email” as an example of a characteristic, finding that Intellectual Ventures’s earlier representations were inconsistent with the expert’s trial testimony.
- Trend Micro moved for fees under 35 U.S.C. § 285; the district court found the circumstances surrounding the expert’s changed testimony “exceptional” (though it said the case overall was not exceptional and it was not objectively unreasonable) and awarded $444,051.14 in fees.
- The Federal Circuit vacated and remanded, concluding it was unclear whether the district court applied the proper § 285 legal standard (i.e., whether the court evaluated exceptionality under the totality of circumstances) and instructed the district court to analyze the matter under the correct legal standard.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court applied the proper § 285 standard when awarding fees based on the expert’s changed testimony | District court erred; cannot base exceptional-case finding on a single isolated act and failed to evaluate totality of circumstances | District court acted within discretion; the expert’s conduct stood out and justified fees | Vacated and remanded: district court did not make a clear totality-of-circumstances finding; must reassess under proper standard |
| Whether a single, isolated act can support finding a case exceptional under § 285 | A pattern of repeated bad faith or tactics is required; a single act is insufficient | A single isolated act can support exceptionality in an appropriate case | A single isolated act may support an exceptional-case finding, but only if the district court, considering the totality of circumstances, concludes the case stands out |
| Whether the fee award should be sustained | Fees improper because analysis was legally flawed | Fees justified by the standout misconduct | Fee award vacated and remanded for reconsideration under the correct legal standard |
Key Cases Cited
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014) (§ 285 requires district courts to apply a totality-of-the-circumstances, discretionary standard for ‘‘exceptional’’ cases)
- Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 572 U.S. 559 (2014) (appellate review of § 285 determinations is for abuse of discretion but appellate courts may correct legal errors)
- In re Rembrandt Techs. LP Patent Litig., 899 F.3d 1254 (Fed. Cir. 2018) (fee awards should bear a relation to the extent of the misconduct)
- Rambus Inc. v. Infineon Techs. AG, 318 F.3d 1081 (Fed. Cir. 2003) (addressing fee awards and relation to misconduct)
- Beckman Instruments, Inc. v. LKB Produkter AB, 892 F.2d 1547 (Fed. Cir. 1989) (must find the case exceptional before awarding partial fees)
- Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307 (Fed. Cir. 2016) (prior Federal Circuit decision addressing validity of asserted patents)