The Federal Circuit in Stone Basket Innovations, LLC v. Cook Medical LLC affirmed the district court, holding that the case was not exceptional. After dismissal with prejudice, Cook sought attorney fees on the grounds that the case was exceptional under § 285, which the district court denied. On appeal, the Federal Circuit considered the strength of litigation positions and the alleged pattern of vexatious litigation.

In arguing Stone’s litigation positions were unreasonable, Cook relied on its invalidity contentions to allege the patent was clearly invalid and inventor testimony corroborating the lack of novelty. The Federal Circuit agreed with the district court that the invalidity contentions provided no “clear notice” of invalidity sufficient for Stone’s subsequent conduct to rise to the level of § 285, when the reference relied upon appeared on the face of the patent. Similarly, inventor testimony suggesting invalidity did not rise to the level of exceptionality, given that such statements are insufficient to establish invalidity.

As to Stone’s alleged vexatious litigation pattern, the Federal Circuit determined that the record lacked evidence that the number or type of other cases brought by Stone indicated such pattern, particularly as Stone litigated its cases on the merits and did not simply seek a quick settlement.