AIA America, Inc. et al. v. Avid Raiopharmaceuticals / U. Penn.

Docket No. 2016-2647

August 10, 2017

Brief summary: DC decision was affirmed because “there is no right to a jury trial for attorney’s fees under § 285”.

Summary: AIA appealed DC award of § 285 attorney’s fees to Avid/U. Penn. with respect to its finding that AIA infringed U. Penn’s US 5,455,169 and 7,538,258 related to the “Swedish mutation” associated with Alzheimer’s disease. Avid alleged AIA lacked standing, alleging the “Ronald Sexton, AIA’s founder, and Dr. Mullan, the purported sole inventor, orchestrated a scheme to appropriate for themselves inventions from Imperial College (Imperial) in London and the University of South Florida (USF).” The first appeal of the DC jury verdict that AIA lacked standing for this reason was affirmed by the FC (Alzheimer’s Inst. of Am. Inc., FC 2014). Following that decision, Avid moved for attorney’s fees and the DC awarded it nearly $4 million. AIA argued “that the Seventh Amendment requires a jury trial to decide the facts forming the basis to award attorney’s fees under § 285” where, as here, the “award…is based in part or in whole on a party’s state of mind, intent, or culpability” (Tegal, FC 2001; “The Seventh Amendment “preserves the right to a jury trial for ‘[s]uits at common law…suits in w hich only legal rights and remedies were at issue, as opposed to equitable rights and remedies.’” (U.S. Const. amend. VII; Granfinanciera, US 1989)). To determine whether “only legal rights and remedies” are at issue, the court “must ‘compare the statutory action to 18th-century actions brought in the courts of England prior to the merger of the courts of law and equity” and then “examine the remedy sought and determine whether it is legal or equitable in nature” (Tull, US 1987; the second step being “the more important of the two” (Chauffers, US 1990)). The FC panel first concluded that “attorney’s fees generally do not involve legal rights.” It also explained that “[a]s to the second step, the nature of the remedy, the fact that relief sought is monetary does not necessarily make the remedy ‘legal’” (e.g., “when attorney’s fees are themselves part of the merits of an action”). It concluded that “[s]ince Avid sought fees as the prevailing party under 35 U.S.C. § 285, the attorney’s fees in this action are properly characterized as an equitable remedy.” The FC panel also explained that “AIA…has pointed to no cases finding that once an issue is deemed equitable, a Seventh Amendment right to a jury trial may still attach to certain underlying determinations” and AIA’s argument does not “fit within the Supreme Courts’ framework of when the right to a jury trial attaches to a claim.” The FC panel also found the DC “was not foreclosed from making additional findings about AIA’s state of mind, intent, and culpability” (Paragon Podiatry, FC 1993) and that the DC “provided both parties the opportunity to fully brief the motion seeking attorney’s fees and allowed both parties to submit any additional evidence and affidavits.” The DC decision was affirmed, the FC panel stating that “there is no right to a jury trial for attorney’s fees under § 285”.

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