Monolithic Power Systems, Inc. v. 02 Micro International Ltd.
726 F.3d 1359
| Fed. Cir. | 2013Background
- 02 Micro and MPS are competitors in LCD/LED driver ICs with overlapping patent portfolios.
- This is the fifth Northern District of California patent suit between them; ITC parallel proceedings were involved.
- In the current case, ITC and district court discovery were coordinated for dual-use discovery.
- 02 Micro alleged invalidity and noninfringement on four MPS patents in the district court; ITC asserted additional patents.
- 02 Micro engaged in a sequence of covenants not to sue after substantial litigation, and faced alleged litigation misconduct.
- The district court ultimately awarded substantial attorney fees and ITC-related discovery costs due to 02 Micro’s misconduct, affirmed on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper §285 standard applied? | 02 Micro argues bad-faith + baseless lit in addition to misconduct. | MPS/ASUSTeK contend misconduct alone suffices. | Yes, misconduct can title case exceptional without explicit bad-faith + baseless duress. |
| Sufficiency of exceptional finding? | 02 Micro claims findings lack factual support for vexatious strategy and misconduct. | District court appropriately found pervasive misconduct and vexatious strategy based on record. | Findings supported; not clearly erroneous. |
| Attorney fees for dual-use ITC discovery allowed? | Fees should be limited to conduct causally tied to misconduct; ITC discovery not exclusively tied to misconduct. | Discovery had dual-use and was integrated; full award appropriate given pervasiveness. | Full award upheld under exceptional-case framework; ITC costs recoverable. |
| Nexus/amount reduction and discretion? | Discretion to award limited fees if not tied to misconduct. | Court properly exercised discretion; reduction and dual-use costs properly applied. | Discretion preserved; award not an abuse. |
Key Cases Cited
- Beckman Instruments, Inc. v. LKB Produkter AB, 892 F.2d 1547 (Fed. Cir. 1989) (amount to award may reflect misconduct impact on litigation)
- MarcTec, LLC v. Johnson & Johnson, 664 F.3d 907 (Fed. Cir. 2012) (litigation misconduct can alone suffice for exceptional case)
- Rambus Inc. v. Infineon Technologies AG, 318 F.3d 1081 (Fed. Cir. 2003) (mitigation misconduct and unprofessional behavior may support §285 finding)
- Brooks Furniture Manufacturing, Inc. v. Dutailier International, Inc., 393 F.3d 1378 (Fed. Cir. 2005) (misconduct or vexatious litigation can justify exception)
- Taltech Ltd. v. Esquel Enterprises Ltd., 604 F.3d 1324 (Fed. Cir. 2010) (mitigation misconduct and unprofessional behavior relevant to fees)
- Yamanouchi Pharmaceutical Co. v. Danbury Pharmacal, Inc., 231 F.3d 1339 (Fed. Cir. 2000) (totality of circumstances when determining exceptional case)
- Highmark, Inc. v. Allcare Health Management Systems, 687 F.3d 1300 (Fed. Cir. 2012) (fee award must relate to misconduct and counteract effects)
- Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49 (Supreme Court 1993) (bad-faith baselessness standard discussed in exceptional case context)
- Brooks Furniture Manufacturing, Inc. v. Dutailier International, Inc., 393 F.3d 1378 (Fed. Cir. 2005) (sanctions may be based on litigation misconduct)