Wednesday, February 25, 2015

Appellant Biax wins reversal of 285 fee award at CAFC

In Biax v. Invidia, the CAFC reversed a fee award given by D. Colorado:

We reverse the district court’s grant of fees under
§ 285 and affirm the district court’s denial of fees under
§ 1927.


The CAFC suggested that the district court had misread (misunderstood?) testimony:

As to the first ground, the district court misread the
expert’s testimony. The testimony in question came from
a deposition of Biax’s expert in which counsel for the
defendants asked: “[i]n informing your infringement
opinions for the ’313 patent, did you apply a requirement
that condition code storage locations are shared by all
processor elements?” J.A. 5. The witness clarified: “[b]y
all processor elements [on the chip]? No.” Id. Subsequently,
counsel for defendants asked again “if there is a
requirement that processor elements need to access any of
the condition code registers or condition code storage
locations in the chip, then [the chip] doesn’t infringe?” Id.
(emphasis added). To this, the witness responded: “[i]t
doesn’t infringe that requirement, no. But there is no
such requirement
.” Id. Contrary to the district court’s
interpretation of the exchange, Biax’s expert did not
admit that Biax had no infringement positions under the
district court’s claim construction. Indeed, at oral argument
in our court, counsel for defendants admitted that
the expert did not say that there is no infringement if one
considers only the individual shaders. See Oral Ar. Tr. at
19:55–20:14 (The Court: “[The expert’s testimony] doesn’t
say that there is no infringement if you consider the
individual shaders?” Counsel: “No, no it doesn’t say that,
your honor.”).

The CAFC found a "clarification" order to be ambiguous:

This clarification order did nothing to resolve
the ambiguity as to whether the shared-by-all limitation
applied on a shader-by-shader or chip-by-chip basis; if
anything, the district court’s claim construction orders
appeared to suggest that the claim limitations apply to
each shader separately and not to all processors and all
condition code registers on the chip.
It was not until summary judgment that the district
court finally resolved the uncertainty. For the first time,
the district court expressly announced that “[t]he attempted
isolation of a single processor element does not
change the fact that any particular processor element in
the accused chips [must be capable] of accessing all condition
code registers and that any particular condition code
register [must be] shared by all of the other processor
elements which exist within the accused chips.” J.A. 1991
(emphasis added). Thus, it was not until a year and half
after the claim construction orders that the district court
finally answered the “on what” question against Biax.
Biax’s claim construction position, that the asserted
claims read onto individual shaders, was reasonable
under the district court’s claim construction orders,
especially in light of the stipulated definition of “computer,”
which was met by the individual shaders.4

Because neither the expert testimony nor the claim
construction orders foreclosed Biax’s position and there
was nothing unreasonable about Biax’s infringement
position, the basis for the district court’s award of fees no
longer exists. Thus, even applying the deferential standard
of review under Highmark, the district court’s fee
award must be set aside.

**As to the 1927 matter:

In addition to asking for fees under 35 U.S.C. § 285,
the defendants also asked for fees from Dorsey under 28
U.S.C. § 1927. Section 1927 provides:

Any attorney or other person admitted to conduct
cases in any court of the United States or any Territory
thereof who so multiplies the proceedings in
any case unreasonably and vexatiously may be
required by the court to satisfy personally the excess
costs, expenses, and attorneys’ fees reasonably
incurred because of such conduct.

The district court denied this basis for the fee award. It
found that Dorsey did not “exceed[] the bounds of zealous
advocacy.” J.A. 22. The defendants appeal that denial.
Under Tenth Circuit law, an assessment of fees under
§ 1927 is appropriate “only in instances evidencing a
serious . . . disregard for the orderly process of justice.”
Braley v. Campbell, 832 F.2d 1504, 1512 (10th Cir. 1987)
(quoting Dreiling v. Peugeot Motors of Am., Inc., 768 F.2d
1159, 1165 (10th Cir. 1985)). Attorney conduct that is
“objectively unreasonable” and manifests “either intentional
or reckless disregard of the attorney’s duties to the
court” is sanctionable. Hamilton v. Boise Cascade Express,
519 F.3d 1197, 1202 (10th Cir. 2008) (quoting
Braley, 832 F.2d at 1512). The defendants have not
argued that making an objectively reasonable argument
could support sanctions under § 1927, and the district
court did not abuse its discretion by deciding to deny fees
under § 1927. The denial of fees under § 1927 is affirmed
for the same reasons we reverse the award of fees under
35 U.S.C. § 285—because § 1927 is inapplicable when the
lawyer puts forth only objectively reasonable arguments
in the absence of bad faith. Therefore, we need not address
whether the “unreasonabl[e] and vexatious[]”
standard of § 1927 under Tenth Circuit law is more
stringent than the “exceptional” standard of § 285.



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