CAFC addresses attorney fees in exceptional case

From Precision Links v. USA Products

The court notes -- This is an appeal from an award of attorney fees in a
patent case. -- and observes -- “because of the substantial economic and reputational
impact of an award of attorney fees, we examine
the record with care to determine whether the trial court
clearly erred in its exceptional case finding.” Eon-Net LP
v. Flagstar Bancorp, 653 F.3d 1314, 1324 (Fed. Cir. 2011). --

As to fee-shifting:

Patent holders “are shielded
from the additional litigation burden of fee-shifting when
their positions are reasonable.” Checkpoint Sys., Inc. v.
All-Tag Sec. S.A., 711 F.3d 1341, 1346 (Fed. Cir. 2013).

The topic of "inefficient infringement" arose:

Even if
distorting the strap’s openings would not be the optimal
design, even “inefficient infringement” is still infringement.
Biogen, Inc. v. Berlex Labs., Inc., 318 F.3d 1132,
1141 (Fed. Cir. 2003), citing Laitram Corp. v. Cambridge
Wire Cloth Co., 863 F.2d 855, 859 (Fed. Cir. 1988).

As to indirect infringment:

But that assertion falls far
short of the kind of showing required for indirect infringement.
See Fujitsu Ltd. v. Netgear Inc., 620 F.3d
1321, 1326 (Fed. Cir. 2010); C.R. Bard, Inc. v. Advanced
Cardiovascular Sys., Inc., 911 F.2d 670, 675 (Fed. Cir.
1990). We therefore uphold the district court’s conclusion
that the charges of infringement as to claims 6 and 8 were
frivolous.

Footnote 2:

Although litigation misconduct “generally involves
unethical or unprofessional conduct by a party or his
attorneys during the course of adjudicative proceedings,”
Old Reliable Wholesale, Inc. v. Cornell Corp., 635 F.3d
539, 549 (Fed. Cir. 2011), it also includes “advancing
frivolous arguments during the course of the litigation or
otherwise prolonging litigation in bad faith.” Highmark,
687 F.3d at 1316. The district court found Precision’s
litigation misconduct to fall into that category.

The next steps:

Where, as in this case, the “underpinnings”
of the district court’s fee award “are partially
reversed, we may remand for further evaluation by the
trial court.” Molins PLC v. Textron, Inc. 48 F.3d 1172,
1186 (Fed. Cir. 1995). Because the allegations as to claim
1 played a significant part in the litigation before the
district court, and in the court’s exceptional case determination,
we vacate the attorney fee award and remand this
case for consideration of “the specific types of conduct” we
have identified as potentially supporting a fee order. Id.
On remand, the district court should determine whether
it continues to regard this case as exceptional and deserving
of an attorney fee award in light of our holding that
Precision’s infringement allegations as to claim 1 were not
frivolous.