by Dennis Crouch
Attorney fee awards have been on a hot-streak since the Supreme Court’s 2014 Octane Fitness decision lowering the standard for proving an “exceptional case” under 35 U.S.C. Section 285.
Under the statute, a district court judge is empowered to award “reasonable attorney fees to the prevailing party” to a patent infringement lawsuit, but only in “exceptional cases.” Id. In Octane Fitness, the Supreme Court gave the lower court fairly wide latitude in deciding exceptional case judgment and the award of fees. In particular, courts are given authority to consider the totality-of-the-circumstances when determining whether a fee award is appropriate. In the parallel case of Highmark, the court held that those lower-court determinations should be given deference on appeal.
The current patent litigation between Gaymar Indus and Cincinnati Sub-Zero began when the patentee (Gaymar) filed its lawsuit alleging infringement of its Patent No. 6,517,510. CSZ’s response was to file an inter partes reexamination petition that eventually led to a judgment that the asserted claims were not patentable and thus cancelled. That outcome effectively ended the (stayed) litigation as well.
However, when the triumphant defendant asked for attorney fees, the district court (through its magistrate judge) refused. Supporting its no-fee judgment, the lower court first noted that the case was not objectively baseless and thus would have failed under the old standard. In addition, the court found that the defendant also had unclean-hands based upon its own litigation misconduct.
On appeal, the Federal Circuit has vacated that no-fee determination — finding that the district court abused its discretion and committed clear error by finding litigation misconduct by the defendant CSZ. To reach its conclusion, the appellate panel walked through the four examples of litigation misconduct cited by the district court and showed how they were either not misconduct or else not-that-bad. The court concludes as follows:
Without question, CSZ’s arguments . . . could be properly characterized as overstatements. But none of the cited examples amounts to misrepresentation or litigation misconduct. In addressing potential litigation misconduct in analogous contexts, other circuits have concluded that isolated overstatements do not rise to the level of sanctionable litigation misconduct under Federal Rule of Civil Procedure 11. . . .
[The examples cited by the district court—whether considered in isolation or in the aggregate—amount to sloppy argument, at worst. While such sloppiness on the part of litigants is unfortunately all too common, it does not amount to misrepresentation or misconduct. In view of the serious consequences of a finding of misconduct, it is important that the district court be particularly careful not to characterize bad lawyering as misconduct.
With this new guidance, the district court will likely again be asked to consider whether the facts justify an award of fees.
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The opinion here was authored by Judge Dyk and joined by Chief Judge Prost and Judge Bryson.(Read the decision: Gaymar v. CSZ)
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Although the opinion here favors the accused infringer, its precedential value is more generally party neutral. Rather than favoring one side over the other, the decision here basically acts to keep a high threshold for what counts as litigation misconduct. The decision here is also somewhat parallel to that in Biax v. Nvidia where Judge Dyk vacated an attorney-fee award after finding that the defendant did have a reasonable basis for its infringement content and that the district court misinterpreted an expert’s deposition.
When CSZ filed its motion for attorney’s fees, CSZ’s attorneys probably did not expect that the Fed. Cir. would publish an opinion stating that they engaged in “bad lawyering.” Be careful what you ask for …
Just to put this in context, the criticism of “lawyering” in this opinion is nothing compared to the criticism that the judges occasionally dish out during the oral arguments that lead to the many content-free Rule 36 affirmances.
Good point. Unwarranted criticism of lawyers during oral argument is part of the public record although not quite as public as a published opinion.
OT, but I think the claims may not pass the Alice patent-eligibility test. I’m not sure what happened in the IPR, but I’m guessing claim 1 must have been shot down for being obvious (which it is).
Claim 1 seems like an obvious implementation of the following abstract idea or method of organizing mammalian activity: increase the ambient temperature (e.g., by moving closer to the fire or into the sunlight) if you are feeling cold and decrease the ambient temperature (e.g., by moving farther from the fire or into the shade) if you are feeling hot.
Here’s the claim –
1. A device for delivering a desired medium at certain temperature ranges for temperature management of a mammal, comprising:
an inlet source receives the desired medium and directs the desired medium to a temperature-control device;
a bio-feedback device measures the mammal’s actual temperature, and transmits the measurement to the temperature-control device;
depending on the measurement, the temperature-control device alters the temperature of the desired medium; and
an outlet source directs the desired medium to manage the temperature of the mammal;
wherein the mammal is to have its temperature set to a predetermined-desired temperature which is entered into the temperature-control device;
wherein when the actual temperature is above the predetermined-desired temperature, the temperature-control device alters the temperature of the desired medium to a predetermined differential from the actual temperature; and
wherein when the actual temperature is below the predetermined-desired temperature, the temperature-control device alters the temperature of the desired medium to a pre-set differential from the actual temperature.
In all seriousness, what does this mean,
–an outlet source directs the desired medium to manage the temperature of the mammal–?
Does this call for the use of a fire hose to spray down hot animals? How does the desired medium manage anything? What does that mean? Or is it the outlet source managing. Is the claim clear and definite?
I don’t have a clue as to what is going on here after reading the claim.
Another problem I had with this claim was that I couldn’t figure out why a device claim was reciting active steps, e.g., “an outlet source directs …”? Was that an attempt to side step means-plus-function interpretation?
Does this call for the use of a fire hose to spray down hot animals?
Good one Ned. This may be the single funniest thing that anyone has written here.
Ned: Does this call for the use of a fire hose to spray down hot animals?
It would appear to cover the automation of such a method.
How does the desired medium manage anything?
Cooler medium cools down the mammal. Warmer medium warms up the mammal. That’s the “management.”
Is the claim clear and definite?
It’s clearly incredibly broad.
But what other kind of claim would suffice to protect a revolutionary idea such as this one? My gosh if it was limited to some sort of novel apparatus structurally described then some Chinese company might be able to design around it easily, which is the worst thing ever.
Without reading beyond claim 1, I would hazard a guess that “directing” could mean “channeling”, in a point-the-medium-at-the-mammal kind of way. “Medium” would be whatever carrier is being used to effect a change in temperature, I’d imagine. Air, water, mist, steam, ice, infrared radiation, a heated piece of stone or metal, a burning stick, whatever. Be creative, this thing is wide open.
Congrats, Genghis.
This:
Claim 1 seems like an obvious implementation of the following abstract idea or method of organizing mammalian activity: increase the ambient temperature (e.g., by moving closer to the fire or into the sunlight) if you are feeling cold and decrease the ambient temperature (e.g., by moving farther from the fire or into the shade) if you are feeling hot.
…may be the single silliest thing that anyone has written here. Is he serious? Or is this a parody of the “everything is abstract!” sand pounders? Decide for yourselves, folks.
That said, it’s certainly an invalid claim. It should never have been filed, it should never have been prosecuted, it should never have been granted and it certainly should never have been asserted because nobody is so lacking in clues that they are unaware of (1) the use of “mediums” to regulate the temperature of mammals or (2) the use of “devices” to automate temperature and delivery of “mediums” for any purpose on earth.
Heckuva job, PTO. At least they were able to clean up the mess after the IPR was filed. Tell everyone again why IPR’s are so awful, Ned.
Hose down a body (for example, a child in the garden on a hot day, an elephant in a circus, a cow in a milking parlour) with water all you like. Mind, not too hot and not too cold. But be warned, if you automate the process, you infringe. What skill, from that claim drafter.
The English courts realised that “mere automation” is not patentable nearly a century ago. Seems the USPTO still hasn’t realised.
The problem (and a substantial one at that) is that “mere” automation is not so.
Take for example, “mere” automation of flight.
(Yes, this is a cue for Les to advance one of his more tenable views).
Rather, MaxDrei, a more deliberate examination of that “mere” automation must be engaged.
At least that is how our sovereign has set the matter. And thank you in advance for respecting our sovereign.
I like anons point. This claim sounds a lot like Diehr: physical process, temperature control, automation and an algorithm. Why is Diehr so much better?
Why is Diehr so much better?
Diehr was obvious junk.
It wasn’t any better than this. Maybe worse.
Please keep trying to defend this claim, though!
The ‘abstract idea’ in Diehr is ‘use a computer to open a rubber mold when the rubber is cured’ ( which is both abstract and obvious).
The invention/flash of insight/something more is that:
a) Computer can perform calculations on a rubber temperature.
b) Computer can store a rubber temperature and the results of calculations on a rubber temperature.
c) Computer can perform calculations on a rubber temperature combined with previously stored rubber temperatures and calculations.
d) Combining a), b) and c) enable us to build a machine which can use the Arrhenius equation to open a rubber mold at the right time.
After PHOSITA’ization, would c) and d) really have been obvious?
After PHOSITA’ization, would c) and d) really have been obvious?
Absent any evidence that the “art” understood at the time that computers and thermocouplers couldn’t be used to automate a heating device, it’s seems as obvious as the nose on anybody’s face.
This kind of stuff:
Computer can perform calculations on a rubber temperature combined with previously stored rubber temperatures and calculations.
Computers can perform calculations on *anything* that you program them to calculate. There is no “insight” there. It’s as if someone else invents “Device X” and then you claim a method of putting “Device X” in your car and driving to Detroit with it. Nobody ever disclosed that combo before! It enables you to drive to Detroit with “Device X” in your car!
It’s unworthy of a patent and when we fill the system up with junk like — and it’s mostly information processing junk because that’s where the grifters can make the most money by doing the least amount of work — the system ceases to function primarily for its intended purpose and begins to promote more litigation and “monetization” schemes than progress in the useful arts.
Feel free to just not use any of those “unworthy” things and kindly stfu.
“anon” Feel free to just not use any of those “unworthy” things
On the contrary, I feel absolutely free to use methods and compositions and apparati covered by invalid or ineligible patent claims to my heart’s content.
Between the two of us, one of us has advice in accord with the law (and that would be me).
But please, continue to pretend that you are “an attorney” with your great advice colored by your Belieb system.
What a chump.
Take for example, “mere” automation of flight.
(Yes, this is a cue for Les to advance one of his more tenable views).
Oh, I can’t wait!
The English courts realised that “mere automation” is not patentable nearly a century ago. Seems the USPTO still hasn’t realised.
The same rule exists here. And the claim above was tanked in an inter parte proceeding.
Some Examiners — and certainly some of our favorite commenters here — are easily impressed when you use fifty words to describe something you can say in three words. Likewise, there is tendency to confuse claims that seem “complex” with claims that are simply exercises in dust-kicking.
Some patent attorneys love to play games. Worse, they expect to be respected and admired based on what they can get away with “legally.” Most people abhor that kind of behavior but we learned here in the comments that all those people are just “jealous.”
Right, “anon”? I can’t wait to hear more about these wonderful flying machines.
Don’t wait – just don’t use any innovation that you would deny protection to.
All of those non-automated thingies remain in the public forum for you to stfu and enjoy.
just don’t use any innovation that you would deny protection to.
Is that why you don’t use new information?
That would explain a lot.
Bwahahahaha!
Nice goal post moving to “just information.”
Gee, Malcolm is dissembling and avoiding the point provided..
Go figure.
So now you are saying that you would deny protection to patents that protect information?
Let’s have some fun watching “anon” spin his way out of this one. Better call up Kevin to hold your hand.
No spin necessary whatsoever – my position remains unchanged – maybe you missed the “mere aggregation” point (another thing you are blissfully unaware of)…
my position remains unchanged
LOL. Since when?
All that remains unchanged is your unwillingness to describe for everyone in plain English exactly what your position is. I know this will be difficult for you to process but stating “I follow the law and you don’t” isn’t clarifying.
You fought tooth and nail for the zombie myth that Diehr precluded an analysis of the relationship of the claims to the prior art during eligibility. Your bff Kevin is still fighting for that myth and you’re still in his echo chamber screeching up a storm.
I assume your paragraph 3 is referring to what is has been cynically called “passing the hand span test” for at least 50 years?
Dennis, I like the use of “!=” in the title, for does not equal. It’s a good programmer’s reference and shows your nerd cred.
Overall this is an example of a “sloppy” opinion itself, and what some call “panel-grabbing,” the tendency of one appellate panel on a circuit court to reach out and comment on issues not properly before it so as to be the first panel that sets precedent on that issue. The Ninth Circuit used to be the kind of panel-grabbing, but the Federal Circuit has clearly brought this to new levels. Here, the supposed litigation “misconduct” isn’t even about the non-prevailing party against whom fees would be imposed, but the party seeking fees. So all of their longwinded and rambling analysis of the four supposed instances of misconduct is totally off base.
In the end, they’re obviously fine with the denial of fees, as they instruct the district court in the last extraordinary sentence: “On remand, the district court remains free to deny attorney’s fees based on the totality of the circumstances, including the strength of Gaymar’s litigation position and the sustained finding that Gaymar’s litigation position was not objectively baseless.” And that’s exactly what the district court is going to do. What a waste of judicial resources this opinion is.
the strength of Gaymar’s litigation position
Which was what, exactly?
They had a patent that was so plainly invalid that it would cause stomach cramps in any patent lawyer with two micrograms of conscience?
“Overstatements” are not misrepresentation? Lawyers covering for lawyers.
“Overstatements” are not misrepresentation? Lawyers covering for lawyers.
No doubt.
I also love the nonsense about the statements being made “in isolation.” All four of them, in the same case. But totally “isolated” so whatever.
That said, the plaintiff here should absolutely pay fees and those fees should be offset by time wasted addressing the alleged “overstatements.”
This isn’t rocket science. But judges have a realllllly hard time hitting lawyers in the pocket book. Take a guess as to why that is.
The lesson we should learn today is that unclean hands in a litigation defense can prevent the award of attorney’s fees.
I wonder if this would continue to apply if we have a statute that mandates awards to defendants. Would their unclean hands prevent the award in face of the statute?
Legal right v. Inequitable conduct. Didn’t the Supreme Court have something to say about that in Petrella?
Is that not the opposite lesson Ned?
Discretion was given, but that discretion was not exercised in a manner deemed “good enough,” so the decision below was vacated.
Huh? “The lesson we should learn today is that unclean hands in a litigation defense can prevent the award of attorney’s fees.” The panel did just the opposite, Ned. They reversed the district court for relying on the defendant’s supposed unclean hands in denying fees. The panel acknowledged that the conduct of the moving party (in this case the defendant) was relevant, but the decision is poorly written in failing to address what weight that should receive. The decision seems to suggest, in fact, that a district court cannot deny fees based on the conduct of the moving party unless the movant’s conduct amounts to “misconduct.”
The statutes in Congress would probably put an end to this silliness, though, because all of the bills out there focus on the party against whom fees would be imposed (whether plaintiff or defendant), and whether that party’s litigation position was reasonable.
And it makes no logical sense to deny fees to a prevailing party because that party was supposedly unreasonable in some way in the litigation. If the plaintiff or defendant loses, and its positions were specious, it should have fees awarded against it. The district court shouldn’t start looking to see if the prevailing party itself committed “unclean hands.” If the prevailing party took bogus positions, the district court has plenty of tools to punish that conduct under its inherent sanction power, etc. But the courts should not use the conduct of the moving party to engraft into Section 285 a childish “tit-for-tat,” or “goose/gander” line of reasoning, which is what this panel unwittingly approved.
If the plaintiff or defendant loses, and its positions were specious, it should have fees awarded against it.
Unless the prevailing party’s conduct extended the litigation or otherwise drove up those fees. It wouldn’t be fair to let the prevailing party turn an easy case into a protracted one, just for the sake of driving up the fees.
Exactly DanH.
Any new statute should impose on a defendant a duty to mitigate “damages” so to speak. In other words, if the patent was clearly invalid or not infringed, the the only damages that should be recoverable would be those that were incurred until and including an early summary judgment motion.
If the prevailing party took bogus positions, the district court has plenty of tools to punish that conduct under its inherent sanction power, etc.
Yup. They can fee shift to cover the wasted time.
It’s what they should be doing.
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