Romag Fasteners, Inc. v. Fossil, Inc.
866 F.3d 1330
| Fed. Cir. | 2017Background
- Romag Fasteners owns U.S. Patent No. 5,722,126 and the registered trademark ROMAG; it sued Fossil for patent and trademark infringement and CUTPA violations based on alleged counterfeit magnetic snaps in Fossil handbags.
- A jury found Fossil liable for patent and trademark infringement and CUTPA violations; this court previously affirmed liability aspects in Romag I/II.
- After judgment, Romag sought attorney’s fees under 35 U.S.C. § 285 (Patent Act), 15 U.S.C. § 1117(a) (Lanham Act), and CUTPA; the district court awarded fees under the Patent Act and CUTPA but denied Lanham Act fees.
- The district court applied the Supreme Court’s Octane Fitness standard to § 285 and Second Circuit (pre-Octane) Louis Vuitton standard (bad faith/fraud) to § 1117(a); it found Fossil’s indefiniteness defense bordered on frivolous and faulted Fossil for not formally withdrawing invalidity defenses until after trial.
- On appeal, the Federal Circuit held the Octane standard applies to Lanham Act fee awards, found multiple legal errors in the district court’s § 285 analysis (including factual errors about withdrawal timing and misreading of prior summary judgment rulings), and remanded for reconsideration under the correct standards.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Octane Fitness standard applies to Lanham Act § 1117(a) fee awards | Octane’s definition of “exceptional” should govern identical fee-shifting language in the Lanham Act | Second Circuit precedent requires showing fraud, bad faith, or willfulness | Octane standard applies to Lanham Act; remanded to district court to apply it |
| Whether district court abused discretion in awarding fees under § 285 (Patent Act) | Romag urged fees because Fossil pursued invalidity defenses (anticipation/obviousness/indefiniteness) and delayed withdrawing them, making the case exceptional | Fossil argued defenses were pursued in good faith and were withdrawn or not frivolous | Reversed/ vacated district court fee award; several findings were erroneous (e.g., invalidity defenses were withdrawn before trial; indefiniteness was not shown to be frivolous); remand for re-evaluation under Octane totality review |
| Whether the district court properly declined to consider Romag’s earlier sanctionable conduct in § 285 totality-of-circumstances | Romag argued its misconduct had already been sanctioned and should not preclude fee recovery | Fossil urged the court to consider Romag’s misconduct as a factor against awarding fees | Federal Circuit held the district court erred by excluding Romag’s misconduct from the Octane analysis; conduct of prevailing party must be considered |
| Whether denial of Rule 50(a) precludes finding non-infringement defense frivolous for fee purposes | Romag argued denial does not preclude a finding of objective unreasonableness | Fossil argued denial shows the non-infringement defense was not frivolous | Court: denial of Rule 50(a) does not bar finding a litigating position unreasonable; but here district court’s other findings supported its conclusion and that aspect was not reversible error |
Key Cases Cited
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014) (defines "exceptional" patent case and standard for § 285 fee awards)
- Highmark Inc. v. Allcare Health Mgmt. Sys., 572 U.S. 559 (2014) (abuse-of-discretion standard for appellate review of fee awards)
- Louis Vuitton Malletier S.A. v. LY USA Inc., 676 F.3d 83 (2d Cir. 2012) (pre-Octane Second Circuit standard for Lanham Act fees requiring bad faith or fraud)
- Noxell Corp. v. Firehouse No. 1 Bar-B-Que Rest., 771 F.2d 521 (D.C. Cir. 1985) (Lanham Act fee-use discussion referenced by Octane)
- Romag Fasteners, Inc. v. Fossil, Inc., 817 F.3d 782 (Fed. Cir. 2016) (prior Federal Circuit opinion on liability and damages issues in this litigation)
- Gaymar Indus. v. Cincinnati Sub-Zero Prods., 790 F.3d 1369 (Fed. Cir. 2015) (party conduct is relevant in Octane totality analysis)
- Power Mosfet Techs., LLC v. Siemens AG, 378 F.3d 1396 (Fed. Cir. 2004) (consideration of misconduct of all parties in fee determinations)
- Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 546 U.S. 394 (2006) (Rule 50(a) denial does not require judgment as a matter of law)
- SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 137 S. Ct. 954 (2017) (addresses laches in patent cases; relevant to remedial issues in this litigation)