In OPLUS TECHNOLOGIES LTD. v. VIZIO, INC., Appeal No. 2014-1297, the Federal Circuit held the district court abused its discretion when it made detailed findings of litigation misconduct by Oplus but did not articulate a reason for denying Vizio’s motion to recover fees.
After a summary judgment of noninfringement on the merits, Vizio moved to recover attorneys’ and expert witness fees under 35 U.S.C. § 285, 28 U.S.C. § 1927, and the district court’s inherent power. The district court found Oplus had unnecessarily delayed the litigation, abused the discovery process, used improper litigation tactics, and had attempted to mislead the court, leading to a holding that the case was exceptional under § 285 and that Oplus and its counsel were vexatious litigants. Despite these findings, however, the district court denied Vizio’s motion. The district court stated, without further explanation, that the “case has been fraught with delays and avoidance tactics to some degree on both sides” and that “[t]here is little reason to believe that significantly more attorney fees or expert fees have been incurred than would have been in the absence of Oplus’s vexatious behavior.”
The Federal Circuit, reviewing for abuse of discretion, held the stated reasons for denying Vizio’s motion were inadequate. The record did not specify any delays or avoidance tactics by Vizio, and counsel for Oplus was unable to articulate any at oral argument. The Federal Circuit noted that “it is difficult to imagine how Vizio had not incurred additional expenses” responding to Oplus’s misconduct, and further noted that Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014) had lowered the legal standard for awarding fees under § 285. Accordingly, the Federal Circuit held that, when a district court finds litigation misconduct and holds that a case is exceptional under § 285, the district court must articulate its reasons for denying a motion to recover fees.