Abstract Judgment Denial and Its Ramifications for Lawyer Price Motions

by Dennis Crouch

In OneSubsea IP v. FMC Tech (Fed. Cir. 2023), the court docket has affirmed a district court docket denial of lawyer charges for the profitable defendant. A key holding within the case is that denial of abstract judgment serves as an enormous flashing signal that the case shouldn’t be distinctive.

OSS sued FMC again in 2015 for infringing claims present in ten totally different patents all referring to subsea processing of hydrocarbons (oil and fuel). This consists of: including chemical compounds, separating water and sand from the hydrocarbons; growing strain; and so forth. The patents required a “move diverter meeting” to “divert fluids” to and from a processing space. The events argued concerning the phrase “divert.” Within the context of the invention, the district court docket concluded that it required two totally different potential flowpaths, and that fluid move have to be pressured to comply with one as a substitute of the opposite. And easily altering instructions shouldn’t be a diversion.

The 2-flowpath requirement was an issue for the patentee. FMC’s accused construction simply had one flowpath that handed by the processor as proven within the determine beneath.

The Proceedings: The district court docket issued its declare building again in 2016, however fairly than rapidly granting abstract judgment of non-infringement, it stayed the case pending consequence of parallel inter partes evaluations difficult the patents’ validity. These IPRs resulted in lots of the claims being discovered invalid as apparent, with that dedication affirmed by the Federal Circuit with out opinion. In 2019, the district court docket lifted the keep and the case moved towards trial. The district court docket once more refused to grant abstract judgment of non-infringement. In response to the transcripts, FMC’s counsel introduced 3,200 pages of paperwork illustrating the variations between the patented claims and the accused merchandise. Choose Bennett (S.D.Tex.) thought that depth of factual file was a bit an excessive amount of for a abstract judgment. “And you actually suppose I’m going to have the ability to grant abstract judgment on that?” Choose Bennett requested. Finally, Choose Bennett excluded OSS’s knowledgeable testimony for misapplying its prior declare building and granted the abstract judgment of non-infringement. OSS didn’t attraction the dismissal.

Lawyer Charges: After profitable on the deserves, FMC moved for lawyer charges and non-taxable prices. The district court docket denied these prices, discovering the case to be not distinctive. On attraction, the Federal Circuit affirmed, discovering no abuse of discretion.

Part 35 U.S.C. § 285 permits a district court docket to award affordable lawyer charges to the prevailing occasion; with the caveat that it could solely accomplish that “in distinctive circumstances.” Beneath the 2014 selections of Octane Health and Highmark, the Part 285 evaluation is a versatile one with the district court docket having substantial discretion in its dedication of whether or not a specific case is “distinctive” and whether or not payment shifting is suitable. On this case, the court docket famous a “totality of the circumstances” method needs to be taken on a “case-by-case” foundation. The district court docket can contemplate whether or not the case is an outlier from others by way of the “substantive power of a celebration’s litigating place . . . or the unreasonable method by which the case was litigated.” Octane Health.

As a result of district courts are given discretion in making these determinations, the selections are given deference on attraction and solely overturned primarily based upon both: (1) clear error of judgment, (2) clear error in factual discovering, or (3) a fabric error of regulation. (Be aware right here, the error of regulation is reviewed de novo).

Deference and Successor Judges: Right here, Choose Bennett stepped into the lawsuit on the very finish of the case, changing Choose Atlas who moved to senior standing.  On attraction, FMC argued that no deference needs to be given to Choose Bennett’s choice as a result of he had not “lived with the case.”  In Highmark, the Supreme Courtroom grounded its choice to provide deference to district court docket selections upon the truth that district courts are way more into the weeds of the litigation and thus higher positioned to guage exceptionally dangerous conduct.  As a result of Choose Bennett determined the case on written file with out even a listening to, FMC urged that his choice shouldn’t be given deference.   On attraction although the Federal Circuit rejected that evaluation primarily based upon caselaw from the opposite circuits persistently holding that deference can be given to successor judges discretionary selections.  “The successor choose receives the identical deferential overview on attraction as the unique choose would have acquired.” Slip Op.  Additional, “FMC had ample discover {that a} successor choose would determine its § 285 movement and didn’t object.”

Distinctive Case: In trying on the distinctive case query, the appellate court docket concluded that FMC’s failure to attain an early abstract judgment was its personal fault. Principally, the unique movement for abstract judgment was deemed “unpersuasive.”  The appellate court docket then defined the significance of abstract judgment denial:

When a district court docket, absolutely conscious of the competing contentions of the events, declines to finish the case on abstract judgment and permits a plaintiff’s case to proceed, the district court docket could have successfully decided that the place of the occasion opposing abstract judgment shouldn’t be objectively baseless, making it practically not possible for the plaintiff’s case (on the problem that was the topic of the abstract judgment movement) to “stand out” as missing substance at the moment.

Denial of charges affirmed.

US Patent Nos. 6,637,514, 7,111,687, 8,066,076, 8,122,948, 8,272,435, 8,281,864, 8,540,018, 8,573,306, 8,746,332, and eight,776,893.