In a non-prec opinion in Biax Corp. v. Nvidia Corp., the panel (Dyk-auth; Lourie; Taranto) reversed the district court’s award of section 285 fees and affirmed its denial of sanctions under section 1927. The case was decided before Octane and so had a fun procedural path to get to this point.
The district court had found that the patentee had asserted objectively baseless infringement claims after the district court had construed the claims. Thus, under Brooktree, it awarded fees under Section 285.
There are many cases where courts have awarded fees when, after claim construction, a party has no reasonable basis to contest, or assert, infringement, yet continues to do so. Here, however, the Federal Circuit found there was such a basis, and it reversed the fee award.
What is odd, however, is the panel’s decision not to remand. In its concluding paragraph the court wrote:
Because neither the expert testimony nor the claim construction orders foreclosed Biax’s position and there was nothing unreasonable about Biax’s infringement position, the basis for the district court’s award of fees no longer exists. Thus, even applying the deferential standard of review under Highmark, the district court’s fee award must be set aside. In some cases decided under the old Brooks Furniture standard, we have remanded for the district court to consider whether the case is “exceptional” in light of the new Octane Fitness standard. See, e.g., Checkpoint Sys., Inc. v. All-Tag Sec. S.A., 572 F. App’x 988 (Fed. Cir. 2014). A remand is not necessary here because neither the defendants nor the district court has suggested any basis for awarding fees other than the lack of objective reasonableness, and the resulting bad faith from continuing to litigate an objectively baseless position. Therefore, we reverse rather than vacate the fee award.
This strikes me as odd, since from the case, it appears that the only basis, pre-Octane to seek fee shifting was objective baseless. To not give the defendant the right to assert that, regardless of objective reasonableness, the case was not “ordinary” under Octane seems odd.
David is essentially correct. The panel raised the issue in oral argument, and neither side requested remand. The only basis for the 285 award was whether BIAX’s argument had been objectively baseless; no other grounds for a fee award were raised below (because there weren’t any). The appeal was stayed after BIAX’s opening brief pending the decisions in Octane and Highmark. As a result, for all practical purposes, when the case was re-briefed, Sony and Nvidia were tasked with showing that BIAX’s argument was “exceptionally weak” under the new standard, or at least that the District Court might make that conclusion on remand. The court concluded that BIAX’s argument was reasonable without qualification, i.e. the panel did not make any comment that would indicate doubt about the relative strength of BIAX’s argument, e.g. that the argument was close to the line but not over it. Thus, the court could safely conclude that the District Court could not under any circumstances determine that BIAX’s argument was exceptionally weak, making remand unnecessary. At least, that’s how I view the result.
The easy to understand reason why no remand was order was because both parties asked the Federal Circuit not to remand.
But also, wouldn’t avoiding remand to address the Octane issue follow directly from the fact that the defendant did not raise that issue in the district court or in the appeal court? Octane raised it, showing that later Octane decision was not necessary to raise it.
Good point.
I thought this case would decide a larger issue of whether a party/lawfirm that continues to litigate a lost cause unreasonably would have attorneys fees taxed against alternatively the party or its law firm.
Instead we find is that the claim construction was ambiguous and was only clarified a year and half later at the motion for summary judgment. In a way, the District Court was saying that its original claim construction was not ambiguous, when in fact it was ambiguous.
We all know what the District Court was doing.
I thought it might, too.
There’s another in the pipeline on that issue, though.
Ned,
Can you be explicit as to what the District Court was doing?
Are you saying that they knew they were wrong and were propogating their error to achieve some other desired end?
anon, apparently there was an ambiguity in the order that the parties sought to clarify. The court declined clarification, and then held on SJ that there was no infringement, providing clarification. The Feds affirmed, Rule 36, and the Judge held the case exceptional from the time the patent owner’s expert allegedly said here was no infringement in view of the order.
But on appeal, it was made clear that the order was open to interpretation, and that the patent owner, in good faith, believed it could prove infringement regardless. Furthermore, the so-called concession of the expert was ambiguous and taken out of context.
To me, it appeared that the district court believed that its claim construction order was clear and did not understand how anyone could misinterpret his order. Apparently, the Federal Circuit has now set him straight.
Ned,
But would not a remand with a “follow our directions” be the normal path of setting the lower court judge “straight”…?
As Prof. Hricik notes, the direct decision seems to not be geared to making sure the lower court judge recognizes his deficiency.
Also, and on its face, the fact that a lengthy explanation is needed to sort this out seems like a more direct and forceful opinion would have been better, but for some mysterious reason is not put in play.
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