To Award Attorney Fees, Courts Must Weigh Factors Such as Degree of Culpability, Closeness of the Questions, and Litigation Behavior

Nilssen v. Osram Sylvania, Inc., [2007-1198, -1348 ] (June 17, 2008) [LOURIE, Newman, Mayer] The Federal Circuit found no abuse of discretion in awarding Osram its attorney fees and denying appellants’ expert fees, and therefore affirmed the district court.
BRIEF: The district court denied the losing patentete’s motion for expert deposition fees, finding that awarding such fees would be a “manifest injustice.” The district court granted Osram’s motion for attorney fees, finding that the case was exceptional for three reasons: Nilssen’s inequitable conduct, the frivolous nature of the lawsuit, and appellants’ litigation misconduct. LOF: The Federal Circuit reviews a finding that a case is “exceptional” within the meaning of 35 U.S.C. § 285 for clear error. LOF: Once a case is determined to be exceptional, the Federal Circuit reviews a district court’s decision to award attorney fees under an abuse of discretion standard.
There is no per se rule of exceptionality in cases involving inequitable conduct. However, this does not mean that inequitable conduct is insufficient for a finding of an exceptional case. Inequitable conduct “may constitute a basis for an award of attorney fees under 35 U.S.C. § 285. In determining whether to award attorney fees, courts must weigh factors such as degree of culpability, closeness of the questions, and litigation behavior, and the Federal Circuit found that the district court did just that in this case.
The Federal Circuit also agreed with the district court that “manifest injustice” was not as limited as Nilssen asserted, and affirmed the denial of expert deposition fees.