Thermolife International LLC v. Gnc Corporation
922 F.3d 1347
Fed. Cir.2019Background
- Stanford owned four patents (ʼ459, ʼ872, ʼ006, ʼ916) concerning L‑arginine/lysine supplements; ThermoLife obtained exclusive license and filed ~81 infringement suits in 2013, later adding Stanford as co‑plaintiff.
- District court consolidated the Southern District of California cases, prioritized validity issues, and bifurcated infringement discovery/trial from validity trial.
- Bench trial on invalidity (Aug 2016) resulted in judgment that all asserted claims of all four patents were invalid for anticipation or obviousness.
- After judgment, Hi‑Tech and Vital moved for attorney’s fees under 35 U.S.C. § 285, arguing the cases were "exceptional" because ThermoLife/Stanford failed to conduct an adequate pre‑suit investigation (particularly regarding claim 1 of the ʼ459 patent) and sued to extract nuisance settlements.
- District court struck a late declaration by plaintiffs, found plaintiffs’ pre‑suit investigation objectively unreasonable (labels/advertising contradicted published science showing <1 g L‑arginine ineffective), found a pattern of filing many suits and many small settlements, and awarded fees; the Federal Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the case was “exceptional” under § 285 based on inadequate pre‑suit investigation | ThermoLife: pre‑suit investigation was adequate; striking of counsel declaration was proper; court should not base fees on unadjudicated infringement | Hi‑Tech/Vital: plaintiffs failed to test publicly available products and ignored labels showing <1 g L‑arginine per serving; advertising was an unreliable substitute; pattern of mass filings suggested nuisance settlement strategy | Affirmed: district court didn’t abuse discretion; inadequate investigation re: ʼ459 claim 1 supported exceptionality |
| Whether district court abused discretion by striking Woods declaration submitted after oral argument | ThermoLife: declaration described pre‑filing investigation and should have been considered | Hi‑Tech/Vital: declaration was untimely and raised new facts and argument denying them discovery opportunity | Affirmed: district court acted within discretion to strike untimely declaration |
| Whether § 285 fee award may rest on an unlitigated/unadjudicated issue (infringement) | ThermoLife: basing fees on infringement (not litigated before final judgment) is improper | Hi‑Tech/Vital: district courts have latitude to base fees on ill‑supported infringement allegations even if not adjudicated | Affirmed: permissible; precedents allow basing fees on inadequately supported infringement allegations with due process respected |
| Whether lack of early, focused notice by defendants (e.g., Rule 11) bars fees | ThermoLife: defendants waited until after merits; lack of early notice should preclude fee award | Hi‑Tech/Vital: lack of Rule 11 notice is not dispositive; context (consolidation, phased discovery) matters | Affirmed: lack of early formal notice not fatal; § 285 is flexible and district court did not abuse discretion |
Key Cases Cited
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014) (§ 285 “exceptional” standard: totality of circumstances; substantive strength or unreasonable litigation conduct)
- Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 572 U.S. 559 (2014) (appellate review of fee awards is for abuse of discretion)
- Lumen View Tech. LLC v. Findthebest.com, Inc., 811 F.3d 479 (Fed. Cir. 2016) (affirming fees where infringement allegations were ill‑supported even though non‑infringement had not been adjudicated)
- Stone Basket Innovations, LLC v. Cook Med. LLC, 892 F.3d 1175 (Fed. Cir. 2018) (early, focused notice by fee‑seeking party is an important consideration in § 285 determinations)
- SFA Sys., LLC v. Newegg Inc., 793 F.3d 1344 (Fed. Cir. 2015) (repeated filings to force settlements can support finding of litigation abuse under § 285)