In Stone Basket Innovations, LLC v. Cook Medical LLC, [2017-2330] (June 11, 2018), the Federal Circuit affirmed the denial of attorneys fees to defendant under 35 U.S.C. § 285 after plaintiff dismissed its complaint for infringement of U.S. Patent No. 6,551,327 on a basket-type stone extraction medical device used to remove stones from biological systems, when defendant instituted in inter partes review.

This appeal involved two main issues: whether the District Court erred in its assessment of: (1) the substantive strength of Stone’s litigating position, and (2) the alleged pattern of vexatious litigation by Stone.  On the first issue, the Federal Circuit held that 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. The Federal Circuit held that the patent owner was not put on clear notice of the invalidity of its patent by defendants invalidity contentions listing 32 prior art references with general statements of invalidity, and “inconsistent and unilluminating” claim charts.  The Federal Circuit further noted that the invalidating prior art used in the inter partes review was listed on the face of the patent, creating a presumption of good faith in asserting its patent rights against Cook.  The Federal Circuit likewise found the statements of the inventor to be taken out of context, and in any even irrelevant because a post-issuance statement regarding a single element of a claimed invention does not establish invalidity.  Lastly, the Federal Circuit noted the district court’s explanation that following the service of the invalidity contentions, Cook took no action to ensure a rapid termination of the instant litigation.  Cook complained that the prevailing party’s conduct is not a proper consideration, but the Federal Circuit said it was a proper part of the totality of the circumstances.

The Federal Circuit added that Cook’s failure to provide early, focused, and supported notice of its belief that it was being subjected to exceptional litigation behavior further supports the District Court’s determination that Stone’s litigating position did not “stand out” from others.

The Federal Circuit concluded that absent any evidence that Stone’s litigating position was frivolous when filed or at any point before it filed for dismissal, it was not persuaded the District Court abused its discretion in determining Stone’s case did not meet the standard for an award of attorney fees.  The Federal Circuit said a party cannot simply hide under a rock, quietly documenting all the ways it’s been wronged, so that it can march out its “parade of horribles” after all is said and done.”