In September 2015, plaintiff brought several district court actions against defendants alleging infringement of U.S. Patent No. 9,043,093 (the “’093 Patent”), which generally covers an airbag system for a vehicle. In response to the infringement actions, defendants filed three separate IPRs challenging every claim of the ’093 Patent. After the Patent Trial and Appeal Board instituted the first IPR, the district court stayed the infringement actions. The Board subsequently instituted the remaining IPRs and ultimately issued final written decisions finding all claims of the ’093 Patent unpatentable. After the Federal Circuit affirmed the Board’s decision in the first IPR, and denied rehearing en banc, plaintiff notified defendants that it intended to dismiss its infringement actions. Defendants then sought attorney’s fees and costs pursuant to 35 U.S.C. § 285, alleging that this was an “exceptional case.”
In deciding whether to award attorney’s fees, the court first considered plaintiff’s contention that defendants’ “exceptional case” allegations related solely to plaintiff’s conduct in the IPRs and, further, that no court had awarded attorney’s fees under Section 285 based solely on IPR conduct. In plaintiff’s view, to the extent defendants wanted to pursue sanctions for conduct during the IPRs, they should have done so before the Board, not the district court. The court, however, rejected this as a reason to deny attorney’s fees, explaining that because it ordered a stay of the infringement actions, defendants could be entitled to attorney’s fees based on the premise that the IPRs “essentially substituted” for the district court litigation. Thus, if defendants could establish that these were “exceptional cases,” they would be permitted to seek fees attributable to plaintiff’s misconduct before the Board.
After considering the strength of plaintiff’s validity positions in the IPRs and its litigation conduct, the court determined that these cases were “far more typical than exceptional” and recommended denying defendants’ request for attorney’s fees. In reaching its determination, the court rejected defendants’ argument that plaintiff’s continued pursuit of a district court case after the Board’s institution decisions made the case “exceptional.” The court also determined that defendants had failed to demonstrate any “unusual tactics of counsel or litigation misconduct,” pointing to the fact that the plaintiff voluntarily dismissed the infringement actions shortly after the Federal Circuit affirmed the Board’s decision.
Practice Tip: When litigating a post-grant proceeding at the Patent Trial and Appeal Board, parties should recognize that their conduct before the Board may be relevant to a subsequent motion for attorney’s fees in a parallel district court litigation. This is especially true where the co-pending district court case has been stayed and, therefore, the post-grant proceeding “essentially substitutes” for the district court litigation.
Am. Vehicular Sci. LLC v. Autoliv, Inc. et al., 5-16-cv-11529 (MIED 2019-08-30, Order) (Anthony P. Patti)