Following the Supreme Court's opinion in Octane Fitness changing the standard for award of attorneys fees under Section 285 in patent cases, 285 motions have become significantly more prevalent, providing a vehicle for judicial review of both the reasonableness of a losing party's claims and its conduct in the litigation - although in practice most cases, at least locally, arise from voluntarily dismissed cases (as in the case of the Federal Circuit's recent SFA v. Newegg). In fact, this week's Texas Lawyer contains an article by John Council profiling Rudy Telscher, who argued the case before the Supreme Court, and reviewing trends regarding such motions.
This morning we got another data point with respect to these motions in the Eastern District under the following facts: (1) plaintiff voluntarily dismisses case against three defendants, and (2) defendants file a 285 motion.
In a brief order resolving both the 285 motion and an objection to an untimely bill of costs, the court noted that while it previously granted plaintiffs opposed motion to dismiss in the case, it had not observed anything exceptional about the party's conduct during the litigation. It declared the defendants the prevailing party, and awarded costs.
The crux of the motion was that the plaintiff allegedly (1) never had a basis for its claims, (2) provided objectively unreasonable infringement allegations, (3) and conducted an inadequate pre-suit investigation. After reviewing the claims, the court declined to find that any of these grounds constituted litigation misconduct – the destruction of certain raw testing data (two pieces of scrap paper which were discarded after the results were recorded) was not shown to be prejudicial, the case was at an early stage when it was voluntarily dismissed, the pre-suit investigation obligations were not shown to not have been met (have to track the burden of proof here), and the plaintiff's claim construction and infringement positions were not shown to be wholly unreasonable. Accordingly "considering the totality of the circumstances" the Court found that the defendants had not demonstrated by a preponderance of the evidence that the case stood out from others with respect to litigation misconduct by the plaintiff so as to be deemed exceptional under Octane Fitness.
The opinion concludes by ruling on the plaintiff's opposition to the defendants' bill of costs. The court rejected the claim that the bill was untimely because it was entered one day after due, which the court found was "excusable neglect." Accordingly the court awarded taxable costs to each of the defendants varying from the low to mid-for figures. The order isn't clear on this point, but it appears that the amounts of the costs were not disputed, just the timeliness of the bill.