Award of Attorneys’ Fees to Accused Infringer Proper Where Patent Owner Did Not “Seriously” Try to Defend Obviousness

The plaintiff sued the defendant in the Western District of Washington seeking declaratory judgment of non-infringement and invalidity of defendant’s patent directed to an adaptor device for use with single-brew coffee machines, as well as asserting patent infringement claims against the defendant. The district court granted the plaintiff’s motion for summary judgment on non-infringement, but denied summary judgment on invalidity. At trial, the jury found the defendant’s patent invalid, and found the plaintiff’s patent infringed. The district court awarded the plaintiff its attorneys’ fees associated with obtaining a judgment of non-infringement and invalidity. The defendant appealed the judgment of non-infringement and the award of attorneys’ fees. During claim construction, the district court construed the term “passageway” differently than the International Trade Commission (ITC) and the Central District of California, and in such a way that “it is patently obvious that [plaintiff’s] products could not infringe . . . because no reasonable person looking at the cut-out openings on the side of [plaintiff’s] devices would describe them as passageways.” The district court further awarded attorneys’ fees on the issue of invalidity because defendant’s conduct was exceptional, in particular noting it was apparent at trial defendant “was not seriously trying to defend the obviousness of the claims at issue.” 

The defendant argued the district court’s denial of summary judgment on invalidity “conclusively established the reasonableness of its litigation position.” The Federal Circuit confirmed district courts are required to consider denial of summary judgment, but not give that denial “decisive weight.” The district court explained that at trial, defendant did not prove the primary indicators of non-obviousness, and “did not bother to try to show secondary factors of non-obviousness. The district court concluded defendant’s “insistence on trying the issue of obviousness was largely a charade used for the purpose of extending the life of the earlier ITC order.” For these reasons, the Federal Circuit was not persuaded the district court abused its discretion. On cross-appeal, the plaintiff challenged the district court’s jury instruction on willful infringement and the district court’s denial of enhanced damages based on the jury verdict. Although the Federal Circuit agreed the use of the phrases “especially worthy of punishment” and “reserved for egregious behavior” was erroneous, the court concluded the instruction “as a whole provides reasonable clarity as to the correct test for willful infringement.”