Attorneys’ fees for patent infringement claims can be the basis for antitrust damages in Walker Process claims

TransWeb, LLC v. 3M Company, et al., Case No. 2014-1646 (Fed. Cir. Feb. 10, 2016)

The patentee claimed infringement of several patents concerning processes for manufacturing respirator filters. The alleged infringer sued for declaratory judgment. After a jury trial, the district court held the patents to be invalid and unenforceable due to inequitable conduct, and also awarded the alleged infringer damages based on a Walker Process antitrust claim. The patentee appealed the district court’s judgment on antitrust liability, inequitable conduct, and validity. The Federal Circuit affirmed.  

The patentee appealed two aspects of the district court’s judgment on antitrust liability: (1) purported flaws in determining the relevant market; and (2) using attorneys’ fees for the infringement claim to determine antitrust damages.  

First, the Federal Circuit reiterated that for antitrust claims “the relevant market is defined by both a product market and a geographic market.” For the product market, the court held that sufficient evidence existed for a reasonable jury to conclude that the specific product identified by the alleged infringer could form a distinct market. For the geographic market, the court held that the patentee erred in arguing that a U.S. market only included U.S. manufacturers. The court noted that the geographic market “is comprised of the area where [seller’s] customers would look to buy such a product” and not the area where the manufacturers reside.  

Second, the patentee argued that using the attorneys’ fees for the infringement claim (as opposed to the antitrust claim) as the basis for antitrust damages was improper. The Federal Circuit stated that in the face of the patentee unlawfully bringing suit on fraudulently obtained patents, the alleged infringer’s only options were to cease competition or defend against the suit (the patentee would not license the asserted patents). Because the attorneys’ fees were attributable to the patentee’s unlawful behavior, the court affirmed the district court’s holding that the attorneys’ fees “qualify as an antitrust injury and thus can form the basis of damages under §4.”

A copy of the opinion can be found here.