Wednesday, January 05, 2005

Brooks Furniture v. Dutailier: award of attorneys fees under 35 USC 285 vacated

In another decision on "exceptional case"/attorneys fees under 35 USC 285, the CAFC analyzed issues in what constitutes subjective bad faith.

To establish misconduct by an adversary in litigation, the party must show

(1) the litigation is brought in subjective bad faith
(2) the litigation is objectively baseless

[citing Professional Real Estate Investors, 508 US 49 and Forrest Labs v. Abbott Labs, 339 F3d 1324].

The CAFC concluded that the first requirement had not been met in this case and worked through some of the issues.

The district court did consider the policy of the patentee of suing and acquiring competitors, most of whom were smaller than the patentee. The district court also analyzed an opinion made on behalf of patentee and found it unreasonable in its conclusions and therefore reliance upon the opinion by patentee also unreasonable.

The CAFC wrote "Infringement is often difficult to determine, and a patentee's ultimately incorrect view of how a court will find does not in itself establish bad faith."

In this particular case the infringement opinion was by an attorney in the same firm that conducted the litigation.

Of the various arguments, the CAFC noted that a duly granted patent is a right to exclude all infringers, not just those of comparable size. The CAFC cited US v. US Steel Corp., 251 US 417 (1920).

The finding that the patentee (Dutailier) acted in bad faith was reversed. Since this was an element for exceptional case, the finding of exceptional case was reversed, and the award of attorneys fees vacated.


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