Victors May Receive Awards of Attorney and Expert Witness Fees in Exceptional Cases

January 3, 2012

Eric L. Amundsen

What This Means To You

  • Even though the exceptional case statute does not cover expert witness fees, consider petitioning for an award of these fees if the circumstances of the case justify it.
  • Before initiating a lawsuit for infringement, carefully study and consider the effects of the patent application prosecution file history and the specification.
  • At various junctures during the lawsuit, consider the advisability of continuing the lawsuit.

Overview

In MarcTec, LLC v. Johnson & Johnson and Cordis Corporation, the US Court of Appeals for the Federal Circuit (Federal Circuit) affirmed the district court’s award of attorney fees and expert witness fees to the defendant. the award having been based on finding that the case was exceptional.

Case Background

MarcTec owns patents directed to surgical implants which include a bonded component or coating. MarcTec sued Cordis for patent infringement, and Cordis won on summary judgment for non-infringement.

During the Markman hearing to determine the meaning of the claims--and in particular the term “bonded”--the district court held that the language of the claims, the specification, and the prosecution file history required the component or coating to be bonded by the application of heat.

After the Markman decision, MarcTec pushed forward with an infringement theory based on expert testimony that spraying the coating onto the implant at nearly the speed of sound would cause a temperature increase. MarcTec also argued that heat is used during some of the manufacturing steps before the coating is applied. The district court held that, because the coating in the allegedly infringing products was sprayed on at room temperature and bonding occurred at room temperature, there was no infringement.

After the judgment was affirmed on appeal, Cordis moved to have the case declared exceptional to recover attorney fees and also moved for expert witness fees. The district court awarded both.

Decision Analysis

The Federal Circuit agreed with the district court that MarcTec acted in subjective bad faith in filing a baseless infringement action, continuing to pursue the action despite no evidence of infringement, and engaging in vexatious and unjustified litigation conduct that unnecessarily prolonged the proceedings. The court held that, even though the district court did not use the term “subjective” in its decision, it had used the term “bad faith”, and the court’s language and findings of fact were consistent with and fully supported a finding of subjective bad faith.

The Federal Circuit pointed to several of the district court’s findings regarding MarcTec’s knowledge of representations to the US Patent and Trademark Office during prosecution, and MarcTec’s pursuance of its actions while relying on mischaracterizations of the district court’s claim construction and expert testimony that did not meet the requirements for scientific reliability.

Even though the exceptional case statute only provides for attorney fees, a district court has the discretion to award expert witness fees. The Federal Circuit held that, even though the district court did not separately analyze expert witness fees, the circumstances justified the award because Cordis was forced to incur expert expenses to rebut MarcTec’s unreliable and irrelevant expert testimony.

Takeaways

Even though the exceptional case statute does not cover expert witness fees, consider petitioning for an award of these fees if the circumstances of the case justify it.

It always bears remembering that, before initiating a lawsuit for infringement, it is critical to carefully study and consider the effects of the patent application prosecution file history and the specification.

At various junctures during the lawsuit, reconsider the advisability of continuing the lawsuit, particularly if there is a possibility of the case falling under the exceptional case statute.