So, Too, a DJ Plaintiff May Be Entitled to Attorney Fees in Exceptional Cases

According to a recent Central District of California decision, a declaratory judgment plaintiff may be entitled to attorney fees if it prevails on non-infringement in a patent case. Homeland Housewares, LLC v. Sorensen Research and Dev. Trust, No. 11-03720, slip op. at 7-8 (C.D.C.A. Jun. 27, 2013).

In Homeland, plaintiff filed a declaratory judgment of non-infringement, invalidity and unenforceability in response to a demand letter (and correspondence thereafter) asserting patent infringement. The asserted patent was directed to plastic injection molding, and the accused products were plastic cups. The Court granted plaintiff’s summary judgment of no infringement, but denied plaintiff’s motion for invalidity and in fact, granted defendant’s cross-motion for summary judgment of validity. Plaintiff then moved for attorneys’ fees under 35 U.S.C. § 285, which permits awards in “exceptional cases” to the “prevailing party,” but, who was the prevailing party?

The District Court determined that by defeating defendant’s (patentee’s) right to exclude, plaintiff was the prevailing party based on the relation of the litigation result (non-infringement) to the overall litigation objective. The Court specifically rejected the approach of comparing the number of claims and defenses won by each party, as defendant had urged. Importantly as well, the Court negatively considered that plaintiff continued to litigate invalidity, even after prevailing on non-infringement, but ultimately ruled plaintiff was still the prevailing party.

The Court went on to find the case “exceptional” because the defendant: did not develop sufficient evidence that plaintiff employed the patented method rather than some other method; took an unreasonable position in claim construction; and employed improper litigation tactics. As such, the Court awarded approximately $250,000 in fees to plaintiff.

IP practitioners facing a Declaratory Judgment situation should be mindful of this decision.

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