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More Pitfalls for the Unaware Patent Litigator – Early and Clear Notice of Patent Invalidity Needed in Order to Obtain Attorney’s Fees

By: Davis|Kuelthau’s Intellectual Property Team

Hot on the heels of the Court of Appeals for the Federal Circuit (CAFC) ruling that patent trial discovery conduct can result in the invalidating an otherwise valid patent (Regeneron Pharmaceuticals, Inc. v. Merus N.V. (Fed. Cir. 2017)), the CAFC held on June 11, 2018 that a failure of one party to provide “early, focused, and supported notice [to an adverse party] of its belief that it was being subjected to exceptional litigation behavior” [emphasis added] can doom a request for a recovery of attorney’s fees.

In Stone Basket Innovations, LLC v. Cook Medical LLC (Fed. Cir. 2018), a plaintiff dismissed, with prejudice, its own patent infringement action.  The defendant then sought attorney’s fees declaring as justification that this was an “exceptional case.”  The district court found that this was not an exceptional case, and denied the request for attorney’s fees.

On appeal, the CAFC agreed with the district court that the defendant had not given clear notice of its invalidity contentions early in the action.  The reference relied on in the appeal was one of some 32 cited prior art patents.  Of additional importance to the district court and the CAFC was the fact that, once the defendant’s invalidity argument had been clearly communicated, the defendant had not stated it believed the suit to be frivolous or unfounded, or demand that the suit be dropped.  Without this notice, the CAFC agreed with the district court that this evidence further supported a finding that the suit was not exceptional, and that the request for attorney’s fees should be denied.

Please contact your Davis|Kuelthau, s.c. attorney, or the related practice group chair linked here if you have any questions.