EXTREMITY MEDICAL, LLC v. NEXTREMITY SOLUTIONS, INC

The United States Court of Appeals for the Federal Circuit affirmed the district court's denial of attorney fees and costs incurred during an inter partes review proceeding, holding that such fees are not recoverable under Section twenty-eight five of Title thirty-five of the United States Code.

Background

Extremity Medical, LLC sued Nextremity Solutions, Inc. for patent infringement regarding U.S. Patent eight million three hundred three thousand five hundred eighty-nine. Nextremity filed an inter partes review petition, and the district court stayed the litigation pending the Board’s decision. The Board found the patent claims unpatentable. Nextremity sought attorney fees for both the district court litigation and the inter partes review under Section twenty-eight five. The district court awarded fees for the litigation but denied fees for the inter partes review. Both parties appealed.

The court’s reasoning

The court held that Section twenty-eight five does not permit recovery of attorney fees for a voluntarily undertaken parallel inter partes review proceeding. Relying on Dragon Intell. Prop. LLC v. DISH Network L.L.C., the court found that Nextremity strategically chose to pursue invalidity at the Board rather than in the district court. The court rejected Nextremity’s argument that the Supreme Court’s decision in Sullivan v. Hudson applied, noting that Sullivan involved a mandatory administrative proceeding, whereas the inter partes review here was voluntary. The court further explained that inter partes review proceedings are not cases under Section twenty-eight five and that allowing fee recovery would undermine the district court’s role in determining exceptional cases.

What it means going forward

Patent owners and accused infringers cannot recover attorney fees for costs incurred during inter partes review proceedings under Section twenty-eight five, even if the review is parallel to district court litigation.