Docket No. 2018-1276
PROST, DYK, MOORE
December 14, 2018
Brief summary: DC denial of Wright’s motion for attorney’s fees under § 285 affirmed (e.g., “fee awards are not to be used ‘as a penalty for failure to win a patent infringement suit’” (Checkpoint, FC 2017)).
Summary: Wright appealed DC denial of its motion for attorney’s fees under § 285. Wright’s XREAM product was found not to infringe Spineology’s RE42,757 (reissued from US 6,383,188). The DC issued a claim construction order for the claim term “body” but did not adopt either party’s construction. Based on its construction of “body”, the DC concluded there was no infringement. Wright argued that “Spineology’s proposed construction of ‘body,’ its damages theories, and its litigation conduct rendered this case ‘exceptional’”, but the DC disagreed finding “Spineology’s proposed construction” (its “attempt”) and damages arguments were “not so meritless as to render the case exceptional” (“Nothing about this case stands out from others with respect to the substantive strength of Spineology’s litigating position or the manner in which the case was litigated.”) The FC panel explained that this is the standard under Octane Fitness (US 2014), that a DC “may determine whether a case is ‘exceptional’ in a case-by-case exercise of their discretion, considering the totality of the circumstances” (Highmark, US 2014), and that “[a] party’s position…ultimately need not be correct for them not to ‘stand out’” (SFA Sys., FC 2015), noting that the DC also “declined to adopt Wright’s proposed construction as well.” The FC panel therefore found no abuse of discretion in the DC’s denial of Wright’s motion regarding claim construction. Wright also argued the DC “should have, as part of its exceptional case determination, reviewed the parties’ various expert reports on damages and assessed the merits of Spineology’s damages theories” (e.g., the DC “did not do enough to analyze the merits of Spineology’s damages theory”). The FC panel noted, the case was resolved on SJ “of non-infringement with no consideration of or rulings on damages” and explained that since the DC “never reached the parties damages arguments, we are in no position to upend its determination that” Spineology’s damages expert’s “analysis was not meritless” (Versata, FC 2013 (“[t]his court has affirmed lost profit awards based on a wide variety of reconstruction theories”); Stone Basket, FC 2018 (“a strong or even correct litigating position is not the standard by which we assess exceptionality”)). The FC panel also explained that a DC “need not…litigate to resolution every issue mooted by summary judgment to rule on a motion for attorney fees” and “caution[ed] future litigants to tread carefully in their complaints about [DCs] not doing enough.” Wright’s other arguments regarding Spineology’s conduct were also unpersuasive to the FC panel (e.g., the DC “is undoubtedly ‘better positioned’ to decide” and “had no obligation to write an opinion that reveals [its] assessment of every consideration” (Univ. Utah, FC 2017)). Accordingly, the DC decision was affirmed, the FC panel writing that “fee awards are not to be used ‘as a penalty for failure to win a patent infringement suit’” (Checkpoint, FC 2017).