In Honeywell International v. Fujifilm Corporation, the Court of Appeals for the Federal Circuit revisited an old friend, the long-standing and now thrice-appealed litigation between Honeywell and Fujifilm concerning Fujifilm’s alleged infringement of Honeywell’s U.S. Patent No. 5,280,371 [text]. In the latest, and likely last, chapter in this nearly decade-old saga, the Court considered only a single issue on appeal—whether the district court properly denied appellants’ motions for attorney fees under 35 U.S.C. § 285. In an interesting twist, and as a result of the age of the dispute, the Court applied the Supreme Court’s new standard for an award under 35 U.S.C. §285, announced in Highmark Inc. v. Allcare Health Management Systems, Inc. and the cause for this most recent round trip to the district court and back. On review, the Court determined that, by taking a totality-of-the-circumstances approach and detailing its analysis, the district court had properly applied Highmark. In an interesting aside, the Court noted that it agrees with the district court that “losing a summary judgment motion should not automatically result in a finding of exceptional conduct” for purposes of attorney fees under §285.
Under new standard for attorney fees, Federal Circuit found no abuse of discretion where district court demonstrated application of a totality-of-the-circumstances approach in support of its denial of attorney fees
Applying the Supreme Court’s new standard for attorney fees under 35 U.S.C. §285, announced in Highmark Inc. v. Allcare Health Management Systems, Inc. (134 S. Ct. 1744 (2014)), the Court reviewed the district court’s “detailed and structured analysis” offered in support of its denial of attorney fees.
While noting that the appellants raise “plausible arguments supporting an award of fees,” the Court carefully noted the Supreme Court’s rationale in Highmark:
“[W]e are cognizant of the Supreme Court’s exhortation that as a matter of the sound administration of justice, the district court is better positioned to decide whether a case is exceptional, because it lives with the case over a prolonged period of time.” (Internal quotations and citations removed)
The Court found that the district court had applied the correct standard, noting that it examined the totality of the circumstances, “—including all of the circumstances raised by appellants on appeal—to determine whether this case stood out from the others.” The Court concluded that the approach taken by the district court, and the detailed nature of its analysis, did not constitute an abuse of discretion, and ultimately affirmed the denial of attorney fees.
The Court summarily noted that the “district court’s fact findings on the issue are not clearly erroneous.”
Lastly, in interesting dicta, the Court concluded with a note that “we agree with the district court that losing a summary judgment motion should not automatically result in a finding of exceptional conduct” for purposes of attorney fees under §285. That would be an interesting world indeed.
Federal Circuit reviews decisions on attorney fees under an abuse of discretion standard of review
Citing the Supreme Court’s new standard for attorney fees under 35 U.S.C. §285, announced in the intervening Highmark Inc. v. Allcare Health Management Systems, Inc. (134 S. Ct. 1744 (2014)), the Federal Circuit explained that it “review[s] a district court’s decision on attorneys’ fees for an abuse of discretion, which is a highly deferential standard of review.” (emphasis added).
The Court explained that, to meet this standard, and to justify an overturning of a district court’s denial of attorney fees under 35 U.S.C. § 285, “the appellant must show that the district court made a clear error of judgment in weighing relevant factors or in basing its decision on an error of law or on clearly erroneous factual findings.” (citations omitted)