Defendant Not a “Prevailing Party” Under § 285 After Voluntary Dismissal

In O.F. Mossberg & Sons, Inc. v. Timney Triggers, LLC, No. 2019-1134 (Fed. Cir. Apr. 13, 2020), the Federal Circuit held, in an opinion authored by Judge Lourie, that a defendant cannot recover attorneys’ fees under 35 U.S.C. § 285 where the plaintiff voluntarily dismissed its case under FRCP 41(a)(1)(A)(i).

Mossberg sued Timney for patent infringement. In lieu of answering, Timney requested and received a stay of the district court proceedings pending an inter partes reexamination.  After the patent was invalidated during the reexamination, Mossberg agreed to dismiss its complaint without prejudice under FRCP 41(a)(1)(A)(i).  Following dismissal, Timney filed a motion for attorneys’ fees.  The district court denied Timney’s motion because the nature of Mossberg’s dismissal precluded Timney from securing the “prevailing party” status required by 35 U.S.C. § 285. 

On appeal, the Federal Circuit affirmed explaining that a party cannot “prevail” without a “material alteration of the legal relationship of the parties” marked by “judicial imprimatur.”  The Court rejected Timney’s argument that the stay below altered the parties’ relationship explaining that it merely “remained in place while the parties determined the patent’s validity in a separate venue.”  The Court further explained there was no judicial imprimatur because Mossberg’s dismissal was “effective immediately” and the district court’s subsequent dismissal order had no legal effect.  Therefore, the Court found that Timney does not qualify as a “prevailing party.”

The Federal Circuit issued Mossberg a week after Keith Manufacturing Co. v. Butterfield, No. 2019-1136 (Fed. Cir. Apr. 7, 2020).  As discussed previously, in Keith, another opinion authored by Judge Lourie, the Court held that dismissal with prejudice constitutes a final judgment for purposes of FRCP 54.  There is tension between the Federal Circuit’s opinion in Keith and its opinion in Mossberg, as the dismissal with prejudice at-issue in Keith was also self-executing and required no action by the court.  As Mossberg did not cite or distinguish Keith it is not clear how this tension will be resolved in future cases.