In a patent infringement suit about fishing lures, the U.S. Court of Appeals for the Federal Circuit stated that the appellant “provided no support whatsoever for its claims” and affirmed the district court’s decision to deny granting attorneys’ fees. Wedgetail v. Huddleston Deluxe, Case No. 09-1045 (Fed. Cir., Aug. 12, 2009) (Gajarsa, J.).

Wedgetail, Ltd. (Wedgetail) is the assignee of a patent directed to flexible fishing lure tails and appendages. Wedgetail filed suit against Huddleston Deluxe, Inc. (Huddleston), accusing Huddleston of infringing claims of its patent. After the district court held a claim construction hearing and issued its claim construction order, Wedgetail filed a motion to dismiss all claims with prejudice; in the motion it granted Huddleston a covenant not to sue. Huddleston opposed solely on the ground that Wedgetail’s proposed order of dismissal would deprive Huddleston of the opportunity to seek attorneys’ fees as the prevailing party. The district court granted Wedgetail’s motion, dismissed all claims with prejudice, and ordered “that each party shall bear their own costs and attorney’s fees.” Huddleston immediately appealed.

The Court explained that the determination of whether a case is exceptional and, thus, eligible for an award of attorneys’ fees under 35 U.S.C. § 285 is a two-step process. First, the district court must determine whether a case is exceptional, a factual determination reviewed for clear error. In patent infringement suits, the Federal Circuit has limited exceptionality to the following instances: “inequitable conduct before the PTO; litigation misconduct; vexatious, unjustified, and otherwise bad faith litigation; a frivolous suit or willful infringement.” After determining that a case is exceptional, the district court must determine whether attorneys’ fees are appropriate, a determination reviewed for an abuse of discretion. The Court noted that, absent litigation misconduct or inequitable conduct before the U.S. Patent and Trademark Office, it permits an award of attorneys’ fees to an accused infringer “only if both (1) the litigation is brought in subjective bad faith, and (2) the litigation is objectively baseless.”

In this instance, the district court did not provide an explanation in its decision as to why it denied the grant of attorneys’ fees. The Federal Circuit, however, explained that due to “the high level of deference owed to district courts on this issue and the limited circumstances that could qualify as exceptional, this court has not imposed a blanket requirement that a district court provide its reasoning in attorney fee cases.” The Federal Circuit stated that “Huddleston directs us to nothing in the record here that could compel a finding of exceptionality or would otherwise suggest a need for the district court to provide its reasoning.” The Federal Circuit continued, “Huddleston has failed to demonstrate either that the district court clearly erred in failing to find this case exceptional or that Huddleston was harmed by the district court’s failure to entertain a motion for attorney fees.” Although lacking explanation, the Court concluded that the district court’s decision was supported by the record such that a remand would serve no purpose. Accordingly, the Federal Circuit affirmed the district court’s decision in denying the award of attorneys’ fees to Huddleston.

Practice Note: The deference afforded the district court in this case was tempered by the Federal Circuit’s explanation that “a statement of the district court’s reasoning is generally necessary to enable review when an attorney fees motion is granted, … or when attorney fees are denied despite the presence of one or more of the circumstances listed above.”