Patentee Can Aggressively Assert Patent If Acting in Good Faith

Brooks Furniture Manufacturer, Inc. v. Dutailier International, Inc., 03-1379 (Fed Cir. 2005). The Federal Circuit vacated an award of attorneys fees to a prevailing defendant in a design patent infringement and unfair competition case. Absent misconduct in conducting the litigation, sanctions may be imposed only if both (1) the litigation is broad on subjective bad faith, and (2) the litigation is objectively baseless. The district court found bad faith in bringing the action and in sending cease and desist letters. The Federal Circuit examined both actions, and finding no subjective bad faith did not reach the question of whether the litigation was objectively baseless. The underlying improper conduct and the characterization of the case as exceptional must be established by clear and convincing evidence. The Federal Circuit said that there is a presumption that an assertion of infringement is made in good faith. In reviewing the reasonableness of the pre-filing opinions obtained by the patentee, the Federal Circuit noted that "it is not necessary that every aspect of the designs be identical." The Federal Circuit said that the failure to mention "every detail" of the designs does not make the opinion wrong or unreliable, and noting that "infringement is often difficult to determine" found that the patentee's ultimately incorrect view of how a court will find does not establish bad faith. The Federal Circuit said that there was no clear and convincing evidence of bad faith in asserting infringement. The Federal Circuit also reviewed other conduct alleged to indicate bad faith, including the patentee's reliance on an opinion letter from litigation counsel and the "harsh" terms of the patentee's cease and desist letters, and the patentee's size. The Federal Circuit said that the fact that plaintiff was larger that defendant, that sued others, and was unwilling to grant licenses were not indicative of bad faith. "Although the entirety of a patentee's conduct may be considered, enforcement of patent rights that are reasonably believed to be infringed does not entail special penalty when the patentee is unsuccessful." The Federal Circuit reversed the finding of bad faith, and vacated the award of attorney's fees.
NOTE: The Federal Circuit rightly gave patentee the freedom to allege infringement, and did not put larger patent owners or patent owners who want to maintain exclusivity on different footing from other patent owners. The Federal Circuit also recognized the difficulty in determining infringement, and appeared to ease (if only slightly) recent indications that design patents have "almost no scope".