Thursday, March 23, 2017

Max Planck loses its appeal for legal fees against the University of Utah

This part of the University of Utah v. Max-Planck saga over the Tuschl RNAi patents
involved a denial of an appeal by Planck to get attorneys fees:

Defendants-Appellants (“Max Planck”) appeal a decision
of the United States District Court for the District of
Massachusetts, which found that this case was not “exceptional”
within the meaning of 35 U.S.C. § 285 and thus
denied Max Planck’s motion for attorney fees. The district
court did not abuse its discretion. We therefore

Max Planck, represented by MORGAN CHU of Irell & Manella LLP, loses.

As to SCIENTIFIC PUBLICATION issues, the case is a cautionary
one for scientists publishing speculations:

In March 2000, well before the Tuschl II invention
was reduced to practice, Dr. Thomas Tuschl and his
colleagues published an article describing their various
discoveries in the field of RNAi. Less than a month later,
Dr. Brenda Bass, of the University of Utah (“UUtah”),
published a mini-review in Cell magazine that summarized
the state of RNAi research, focusing on Dr. Tuschl’s
article. In addition to summarizing current research, Dr.
Bass’ mini-review included several of her own hypotheses
about enzymatic processes that may be responsible for the
RNAi activity reported in Dr. Tuschl’s article.
One of
those hypotheses involved molecules that have a feature
called “3’ overhangs,” which are certain double-stranded
RNA (“dsRNA”) molecules with a nucleotide overhang on
the 3’ ends of dsRNA.


The district court reasoned that there was no evidence
to support a finding of collaboration between Dr. Bass and
the Tuschl II inventors. While Dr. Bass’ mini-review was
admittedly integral to the Tuschl inventors’ research, the
mini-review was already in the public domain by the time
the Tuschl inventors relied on it. Therefore, the district
court reasoned, the Tuschl II inventors’ reliance on the
mini-review could not, on its own, support a finding of
collaboration. J.A. 4068−69. The district court recognized
the evidence that Dr. Tuschl and Dr. Bass had one discussion
over dinner that may have influenced Dr. Tuschl’s
invention, but declined to find that such discussion at an
academic conference could constitute the collaboration
needed to establish joint inventorship. J.A. 4073−76.

Dr. Tuschl, not Dr. Bass, ran with the ball, and ultimately
prevailed on the inventorship issue. BUT, at what cost to Max Planck?
Winning cases costs money.

The fees in question were more than 8 million dollars, and recall that
this was simply an issue of naming inventors, not one of patent infringement.
The issues were

Max Planck sought eight million dollars in attorney
fees pursuant to 35 U.S.C. § 285, arguing that the case
was “exceptional” within the meaning of this section for
three reasons. First, Max Planck argued that, when
viewed in light of Dr. Bass’ deposition testimony, UUtah
lacked any meaningful basis for filing its correction of
inventorship suit. According to Max Planck, UUtah
either filed its complaint without properly interviewing
Dr. Bass, or filed its complaint knowing that Dr. Bass’
testimony would undermine the allegations. Second, Max
Planck argued that UUtah’s delay in withdrawing its sole
inventorship claim until the eve of summary judgment
indicates that UUtah knew its claim was meritless.
Third, Max Planck argued that UUtah’s claimed damages
were extortionately high.

Of legal significance for future cases, the CAFC rejected a contention
that Octane Fitness provides a "framework" for analysis
of these fee cases:

The district court provided a thorough explanation for
why it did not find this case to be exceptional. Max
Planck’s argument that the district court abused its
discretion in failing to follow the Octane Fitness framework
presumes that there is a precise Octane Fitness
framework. That is not correct. Octane Fitness provides
several suggestions that might guide a district court’s
discretionary decision. For example, Octane Fitness
suggests that objective unreasonableness may support the
finding of an exceptional case. Id. While the district
court agreed that UUtah’s case was weak and based on
insufficient evidentiary support, it provided a detailed
explanation as to why it disagreed that UUtah’s case was
objectively unreasonable.

Rather than providing any set formula to dictate the
district court’s consideration of this issue, Octane Fitness
defines an exceptional case as one that “stands out from
others with respect to the substantive strength of a party’s
litigating position.” Id. at 1756 The district court
explained why UUtah’s position did not stand out from
other patent cases, and Octane Fitness does not require
anything more.

Patent attorneys should note the text:

The district court also agreed that Utah’s
damages request was high, but declined to find anything
exceptional about its position. Ultimately, the district
court concluded that this case was not exceptional because:
“Although Utah may have been asking for pie in
the sky, that does not differentiate this case from most
patent cases.” J.A. 5−6.

In terms of the current discussion of whether or not
judges need to write complete opinions, the last paragraph
of the CAFC opinion states:

Max Planck presents evidence from the record suggesting
that the district court failed to take certain facts
into account and overstated the factual and legal strength
of UUtah’s position. UUtah presents evidence from the
record suggesting the contrary and defending its litigation
strategy. We should be wary to wade in such circumstantial
waters. The trial judge was in the best position to
understand and weigh these issues. She had no obligation
to write an opinion that reveals her assessment of
every consideration.
This court will not second guess her
determination. We affirm.


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