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Litigation misconduct and inequitable conduct lead to exceptional case, fees for defendant

By McKee, Voorhees & Sease, P.L.C.

In a decision yesterday, the Federal Circuit affirmed an award of attorneys' fees for a prevailing defendant in an infringement case.  The district court held the case was exceptional under § 285 because the patent holder had engaged in inequitable conduct (a finding previously affirmed), asserted frivolous claims, and engaged in litigation misconduct.  The district court also held that it would be manifestly unjust to force the defendant to pay the plaintiff's expert witness fees under Rule 26(b)(4)(C)(i).

The Federal Circuit affirmed.  While the individual acts may not have been sufficient to find the case was exceptional, the ultimate conclusion was not clearly erroneous.  The Federal Circuit was very reticent to question the district court's finding of litigation misconduct, stating:  "it ill behooves an appellate court to overrule a trial judge concerning litigation misconduct when the litigation occurred in front of the trial judge, not the appellate court."

Judge Newman dissented.  In her opinion, the district court and panel majority applied too low a standard for a case to be considered "exceptional."  Citing the Federal Circuit's previous opinion affirming the finding of inequitable conduct, she noted the court stated the actions that led to the finding "may have been an oversight."  With this low level of "bad" conduct, Judge Newman would have reversed the award of attorney fees.

More concerning Nilssen v. Osram Sylvania, Inc. after the jump.  

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Full post as published by FileWrapper on June 18, 2008 (boomark / email).