Case: Therasense, Inc.v. Becton, Dickinson & Co., No. 2012-1504 (Fed. Cir. Mar. 12, 2014) (precedential). On appeal from N.D. Cal. Before Rader, Newman, and Dyk.

Procedural Posture: Defendants appealed the district court’s denial of (1) appellate and remand fees and expenses; (2) fees spent seeking additional fees; (3) prejudgment interest on fees; and (4) post-judgment interest calculated from the date the case was found to be exceptional, to supplement the original fee award after CAFC vacated the district court’s inequitable conduct judgment and remanded for further proceedings. CAFC affirmed.

  • Exceptional Case Under 35 U.S.C. § 285: The district court’s original fee award contemplated an appeal, and was to be paid only if the court’s inequitable conduct judgment was upheld on appeal. Since the CAFC vacated the inequitable conduct judgment, and even though the district court still found inequitable conduct on remand, the pre-existing inequitable conduct ruling was not upheld and the original fee award was thus vacated. As such, the district court properly declined to award fees predicated on the vacated determination of inequitable conduct. Separately, although appellate and remand fees are permitted where those stages of litigation are deemed independently exceptional, defendants failed to establish their exceptional natures. Defendants presented no evidence of bad faith by plaintiffs in their pursuit of appellate review, and the pursuit of appellate review, by itself, does not suggest an abuse of the legal system. Further, the CAFC found the district court did not err in concluding that post-judgment interest should accrue only from the date of reinstatement of the prior fee award, because where a previous judgment is vacated, any post-judgment interest must be determined based on the more recent judgment. 35 U.S.C. § 285 awards fees to the “prevailing party” and since plaintiff prevailed on appeal with respect to inequitable conduct, even if the appeal itself were exceptional, defendants would not be entitled to the appellate fees.

Dyk, dissenting in part:

  • Exceptional Case Under 35 U.S.C. § 285: Although the district court concluded that section 285 requires each stage of the litigation for which fees are sought to be independently exceptional, the Supreme Court has held with regard to other fee-shifting statutes that all phases of litigation, including appellate proceedings, should be treated as a whole. There is no requirement that the trial court must find an appeal exceptional to award appellate fees. Further, the Supreme Court has held that a “prevailing party,” is any party “who has established his entitlement to some relief on the merits of his claims.” Thus, it is defendants who prevailed since they prevailed on invalidity and non-infringement at both stages of the appeal, and ultimately on inequitable conduct. In addition, the Supreme Court has held that fees for fee litigation should reflect the degree to which the original fee request was successful. Here, defendants were entitled to substantial fees and the district court was required to allow fees to secure those fees.