District Court Must Detail What Makes An Exceptional Case Exceptional

Innovation Technologies, Inc., v. Splash! Medical Devices, LLC., [2007-1424] (June 16, 2008) [FRIEDMAN, Mayer, Moore] The Federal Circuit vacated the award of attorneys fees, holding that the district court failed to make adequate findings to support its “exceptional-case” determination.
SIGNIFICANCE: District court must make specific findings on what makes case exceptional.
BRIEF: Innovation Technologies, Inc. (“Innovation”), sued Splash for infringement of its U.S. Patent No. 5,830,197 on a method for irrigating wounds. More than a year after filing suit, Innovation executed a covenant not to sue Splash for infringement of the ’197 patent by the Splash device involved in this case and moved to dismiss its suit with prejudice. Splash then moved for attorney fees pursuant to 35 U.S.C. § 285, and the district court awarded Splash $140,232 in attorneys fees. The Federal Circuit said that the only basis for concluding that this was an “exceptional case” was that Splash had shown that “Innovation knew or, on reasonable investigation, should have known, that its claims of infringement were baseless.” The court gave no explanation of, or factual basis for, that conclusion. The Federal Circuit said that in order to provide a basis for meaningful review, it is incumbent on the trial court not only to make the ultimate finding that the case is exceptional, but also to articulate the more particular factual findings from which the finding of ‘exceptional circumstances’ follows.” Because there was no such explanation, the Federal Circuit vacated the award.