Checkpoint Systems, Inc. v. All-Tag Security S.A. et al.

Docket No. 2012-1085

March 25, 2013

Summary: Checkpoint appealed the jury finding that the case was “exceptional” under 35 USC § 285 and award of over $6 million in attorney fees, costs and interest to All Tag. The jury also found that its US 4,876,555 related to anti-shoplifting devices were invalid, unenforceable, and not infringed but this was not appealed as the patent is expired. The opinion explained that the “American Rule” (each side normally bears its litigation burden) is not absolute as 35 USC § 285 codifies the policy of “compensating the prevailing party for the costs it incurred in the prosecution or defense of a case where it would be grossly unjust, based on the baselessness of the suit or because of litigation or Patent Office misconduct, to require it to bear its own costs” for patent cases (Highmark, Inc. (FC 2012) (must be shown by clear and convincing evidence, reviewed de novo)). Sanctions are appropriate only if: 1) the litigation was brought in subjective bad faith; and, 2) the litigation is objectively baseless. In this case, the DC “faulted Checkpoint for ‘only examin[ing] tags from All-Tag A.G. of Switzerland, not the Actual Accused Product manufactured by All-Tag S.A. of Belgium” even though they had “ample time to have the expert’s infringment analysis completed.” However, the FC panel reversed the decision because All-Tag made some admissions regarding its products and patents that “could reasonably have been relied on by Checkpoint and its expert”.

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