Deterrence of Future Abusive Litigation May Support Fee-Shifting Under 35 U.S.C. § 285

*Correction: This post was first published on January 2, 2020. The title has been changed to more accurately reflect the contents of the Federal Circuit opinion.

In Blackbird Tech LLC v. Health in Motion LLC, No. 2018-2393 (Fed. Cir. Dec. 16, 2019), the Federal Circuit affirmed a district court’s award of attorneys’ fees under 35 U.S.C. § 285 where the patentee’s litigation conduct was unreasonable, its infringement contentions were meritless, and where fee-shifting served the court’s interest in deterring future abusive litigation.

The Federal Circuit found Blackbird Tech’s litigation conduct unreasonable, citing its “nuisance value settlement offers,” unreasonable delays in document production, and filing an unanticipated notice of dismissal on the eve of trial.  Despite its voluntarily dismissal, Blackbird asserted that its litigation position was nonetheless “eminently reasonable, and likely correct.”  The Court disagreed, holding that the accused product lacked a key claim element.  Had Blackbird exercised “even a modicum of due diligence,” the weakness of its contentions would have been manifest.  And the section 285 award therefore did not need to be conditioned on the accused infringer providing clear notice of that weakness.

Finally, the Court affirmed the district court’s latitude in deterring “future abusive litigation” through fee-shifting.  This interest was especially compelling here where none of Blackbird’s 100+ infringement lawsuits had ever reached a final decision on the merits.  Given the totality of the circumstances, the Federal Circuit held that the district court was within its discretion to label this case “exceptional.”