Federal Circuit dismisses attorneys’ fees appeal
An Indiana district court did not abuse its discretion in denying attorneys’ fees to medical device company Cook Medical, the US Court of Appeals for the Federal Circuit said yesterday in a precedential decision.
In April 2015, Stone Basket Innovations sued Cook, alleging that it infringed US patent number 6,551,327, which relates to an extraction medical device used to remove stones from biological systems.
The claim was filed at the US District Court for the Eastern District of Texas, but the case was later moved to the US District Court for the Southern District of Indiana after Cook filed for a motion to transfer it in May 2015.
In March 2016, Cook asked the US Patent and Trademark Office for an inter partes review (IPR) of all the claims of the ‘327 patent. Cook and Stone filed a joint motion to stay the district court case pending the Patent Trial and Appeal Board’s (PTAB) consideration of the IPR petition.
The PTAB granted an IPR on all claims of the ‘327 patent in September 2016. Stone then offered Cook the opportunity to license the patent, but negotiations broke down.
In December 2016, the PTAB cancelled all of the patent claims. Stone then asked for the district court litigation to be dismissed, with the Indiana court granting this request.
In March 2017, Cook filed its motion for attorneys’ fees. However, the district court denied the request because the case was not “exceptional”, prompting Cook to appeal.
The Federal Circuit said that the appeal involved two main issues: whether the district court erred in its assessment of the substantive strength of Stone’s litigating position; and the alleged pattern of vexatious behaviour by Stone.
Cook argued that the district court disregarded “both the law and facts showing the weakness of Stone’s patent claims”. The Federal Circuit disagreed with this assertion and said the district court “did not abuse its discretion in finding that the substantive strength of Stone’s ultimately non-prevailing litigating position did not warrant an award of fees”.
Cook also claimed that it was sued for the “sole purpose of forcing settlements without any intention of testing the merits of its claim”. However, the district court said that there was a lack of evidence to support this allegation. In fact, it found that Stone participated in each stage of the litigation for almost two years and did test the merits of its claims.
According to Cook, the district court was wrong to say that it made “conclusory allegations” about Stone’s “vexatious litigation” in order to receive payments.
The Federal Circuit said Cook did not provide enough evidence in support of this claim and that the court did not abuse its discretion.
It concluded that Cook is not owed any attorneys’ fees.
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