Highway Equipment v. Feco (Fed. Cir. 2006).
The district court dismissed the case with prejudice after the plaintiff gave the defendant a covenant not to sue. Just before trial, the plaintiff gave up and granted a covenant not to sue. The district court dismissed the case, but retained jurisdiction to decide the issue of attorney fees (fees denied).
On appeal, the CAFC first decided the issue of Article III jurisdiction — holding that even after dismissing the case major, the lower court properly retained jurisdiction over the attorney fee issue. The appellate panel then agreed that attorney fees were not justified in this case.
In my opinion, the more interesting facet of this opinion is the casual manner in which the court decides to apply Federal Circuit law, as opposed to regional circuit law, to the question of jurisdiction over attorney fees.
While I agree that 35 USC section 295 is within the Federal Circuit’s exclusive domain, courts always have the power to award attorney fees, in all cases, indepedent of section 295. Therefore jurisdiction over awarding attorney fees after a covenant not to sue is an issue unquestionably not unique to patent law.
Why the Federal Circuit feels the need to pile on one more answer to this question is beyond me.
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