Attorney Fee Award in Patent Case Doesn't Extend to Appeal

Attorney Fee Award in Patent Case Doesn't Extend to Appeal U.S. Court of Appeals for the Federal Circuit Chief Judge Randall Rader. July 17, 2013. Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL.

SAN FRANCISCO — The U.S. Court of Appeals for the Federal Circuit recently lowered the bar for recovering attorney fees in “exceptional cases.” But on Wednesday the court kept it high for exceptional appeals.

The court ruled 2-1 that while Abbott Laboratories and a subsidiary must pay a $6 million fee awarded by U.S. District Judge William Alsup, it does not have to pay the additional $1.35 million opponent Becton, Dickinson & Co. says it spent defending the award on appeal and then on remand.

Becton and its attorneys at Ropes & Gray argued that Abbott brought the appeal merely to delay the inevitable payment. But, Chief Judge Randall Rader wrote Wednesday in Therasense v. Becton Dickinson, “the mere act of pursuing appellate review—available as a matter of right and frequently necessary to preserve future rights of appeal—[does not] by itself suggest an abuse of the legal system.”

Besides, Rader pointed out, Abbott actually persuaded the Federal Circuit to convene en banc and set a new standard for proving inequitable conduct. Although that new standard didn’t change Alsup’s mind about the exceptional-case finding, it made Abbott the prevailing party on appeal. And Section 285 of the Patent Act provides for an award of attorney fees “to the prevailing party,” Rader reasoned.

Judge Pauline Newman concurred.

Judge Timothy Dyk dissented. He said the eight years of litigation over the rights to glucose test strips should be considered in its entirety, and that both Alsup and Rader erred by requiring that the appeal be independently exceptional.

“With respect to other fee-shifting statutes, the Supreme Court has held that all phases of litigation, including appellate proceedings, are to be treated as a unitary whole, not parsed into discrete parts,” Dyk wrote. “I see no reason why section 285 should be interpreted differently.”

Dyk also argued that Becton Dickinson should have been awarded fees spent on bringing the fee litigation.

Covington & Burling partner Clara Shin argued the appeal for Abbott. Ropes partner Bradford Badke argued for Becton Dickinson.

Contact the reporter at sgraham@alm.com.

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