256 F. Supp. 3d 1123
D. Or.2017Background
- Keith sued former employee Butterfield asserting patent-related claims (declaratory noninfringement and invalidity), breach of contract, trade-secret misappropriation, and correction of inventorship.
- Butterfield sent an unconditional covenant not to sue as to the patent, and the court dismissed Keith’s declaratory patent claims as moot.
- More than eight months after that dismissal the parties filed a stipulation of dismissal with prejudice under Fed. R. Civ. P. 41(a)(1)(A)(ii); no judgment or court order was entered.
- Twelve days after Keith filed the stipulated dismissal, Butterfield moved for attorney’s fees under Fed. R. Civ. P. 54(d)(2) and several statutes (Oregon statutes and 35 U.S.C. § 285); Keith filed a conditional cross-motion.
- The court addressed (1) whether it retained jurisdiction to resolve fee motions after a self-executing stipulated dismissal, (2) whether a stipulated dismissal qualifies as a “judgment”/appealable order for Rule 54 purposes, and (3) whether either party was a "prevailing party" entitling them to fees under the cited statutes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Court jurisdiction to decide fee motions after a Rule 41(a)(1)(A)(ii) stipulation | (Keith) Stipulated dismissal terminates the case and divests the court of jurisdiction to award fees | (Butterfield) Court retains power to decide collateral matters (fees) after case termination | Court retained jurisdiction to decide fee motions as collateral matters (citing Cooter & Gell) |
| Whether a stipulated dismissal with prejudice is a "judgment"/appealable order under Rule 54 | (Butterfield) Stipulated dismissal is appealable and thus a "judgment" for Rule 54 deadlines | (Keith) Voluntary stipulation is not a judgment/appealable order; Rule 54 requires a judgment | Stipulated dismissal is not an appealable order after Microsoft v. Baker; therefore no "judgment" for Rule 54 and Rule 54 fee relief is unavailable |
| Whether Butterfield is a "prevailing party" for Oregon-contract fee-shifting (Or. Rev. Stat. § 20.096) | (Butterfield) Stipulation with prejudice makes defendant prevailing, so contractual/state fees apply | (Keith) No prevailing party or federal rules preclude fees without a judgment | Under Oregon law a defendant is generally the prevailing party after voluntary dismissal; but federal Rule 54’s lack of a "judgment" prevents fee award here |
| Entitlement to fees under Oregon trade-secret statute and federal patent statute (§ 646.467 and § 285) | (Butterfield) Seeks fees under state trade-secret statute and § 285 for patent-inventorship claim | (Keith) Even if prevailing, statutory prerequisites or "exceptional case" standard not met | Fees under ORS § 646.467 not warranted (no bad faith or willfulness); fees under § 285 not warranted (not exceptional) and defendant not prevailing for patent claim absent judicial imprimatur |
Key Cases Cited
- Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (1990) (district courts may consider collateral matters, like fees, after the underlying action ends)
- Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598 (2001) ("prevailing party" requires judicially sanctioned change in legal relationship; rejects catalyst theory)
- Microsoft Corp. v. Baker, 137 S. Ct. 1702 (2017) (a voluntary dismissal with prejudice is not an appealable order for § 1291 purposes)
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014) ("exceptional" patent case standard is a totality-of-the-circumstances, discretionary inquiry)
- RFR Indus., Inc. v. Century Steps, Inc., 477 F.3d 1348 (Fed. Cir. 2007) (applies Buckhannon to patent-fee context; voluntary dismissal without judicial imprimatur does not confer prevailing-party status)
- Berger v. Home Depot USA, Inc., 741 F.3d 1061 (9th Cir. 2014) (Ninth Circuit decision on appealability of stipulated dismissal later abrogated by Microsoft v. Baker)