Kilopass Technology, Inc. v. Sidense Corporation
738 F.3d 1302
| Fed. Cir. | 2013Background
- Kilopass sued Sidense in the Northern District of California for alleged infringement of Kilopass's patents, with the district court granting summary judgment of noninfringement and the Federal Circuit affirming this on appeal.
- During this process, Sidense moved for attorney fees under 35 U.S.C. § 285, which the district court denied.
- Kilopass had prior communications and analyses from Kilopass and outside counsel suggesting Sidense's design might avoid literal infringement, including discussions about replacing the drain with STI and concerns about cell size.
- Kilopass halted MoFo's infringement analysis after eight days, and Kilopass's own engineers later provided an engineer's view that Sidense could infringe under doctrine of equivalents.
- The district court found Kilopass had engaged in gamesmanship and struck evidence concerning equivalence, then granted Sidense summary judgment of noninfringement, leading to the fee dispute on appeal.
- On appeal, the court vacated and remanded to reconsider § 285, holding that the district court applied an incorrect legal standard and must assess the totality of the circumstances, including objective merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard for exceptionality under § 285 | Kilopass argues Brooks Furniture sets too high a bar by requiring both subjective bad faith and objective baselessness. | Sidense argues the standard should require objective baselessness or a broader view including subjective factors. | Remand to apply correct standard; maintain focus on totality of circumstances. |
| Need for objective baselessness in addition to subjective bad faith | Kilopass contends objective baselessness is not necessary if subjective bad faith is shown. | Sidense contends objective baselessness should be sufficient or the primary basis for exceptionality. | Court holds objective baselessness is an independent respect to consider, with totality of circumstances; vacate/remand. |
| Burden of proof for exceptionality | Kilopass argues for clear and convincing evidence as to exceptionality. | Sidense contends preponderance of evidence could suffice. | Court retains clear and convincing standard for exceptionality on remand. |
| Relation to other circuits and precedent | Kilopass urges adherence to original broader § 285 framework. | Sidense advocates aligning with Brooks Furniture and related precedents. | Court calls for applying the existing frame and remanding for consideration; not overruling Brooks Furniture at this time. |
| Impact of the § 285 framework on district court discretion | Kilopass asserts the district court misapplied law and should reevaluate merits. | Sidense emphasizes flexibility under § 285 and broader grounds for fee shifting. | Remand to allow district court to assess the totality, including objective merits, before deciding on fees. |
Key Cases Cited
- Brooks Furniture Mfg. v. Dutailier, Inc., 393 F.3d 1378 (Fed. Cir. 2005) (two-prong test: objective baselessness and subjective bad faith)
- Highmark, Inc. v. Allcare Health Management Sys., 687 F.3d 1300 (Fed. Cir. 2012) (subjective bad faith requires lack of objective foundation known or should have been known)
- Eltech Sys. Corp. v. PPG Indus., Inc., 903 F.2d 805 (Fed. Cir. 1990) (describes totality of circumstances and should know standard for bad faith)
- Professional Real Estate Investors v. Columbia Pictures Indus., Inc., 508 U.S. 49 (Supreme Court, 1993) (antitrust context; supports objective inquiry in fee-shifting)
- MarcTec, LLC v. Johnson & Johnson, 664 F.3d 907 (Fed. Cir. 2012) (discusses knowledge and grounds for bad faith; caution against overly strict knowledge requirement)
- iLOR, LLC v. Google, Inc., 631 F.3d 1374 (Fed. Cir. 2011) (requires objective baselessness focus; discusses knowledge)
- Reactive Metals & Alloys Corp. v. ESM, Inc., 769 F.2d 1578 (Fed. Cir. 1985) (establishes clear and convincing standard for bad faith in some contexts)
- Monolithic Power Sys., Inc. v. O2 Micro Int’l Ltd., 726 F.3d 1359 (Fed. Cir. 2013) (discusses breadth of bad faith and misconduct grounds)
- Rambus, Inc. v. Infineon Techs. AG, 318 F.3d 1081 (Fed. Cir. 2003) (records of litigation misconduct can support exceptionality)