May 11, 2017

In Determining Whether a Case “Stands Out,” It was Not Improper to Consider Patent Cases Generally

In Nova Chemicals Corp. (Canada) v. Dow Chemical Co., [2016-1576] (May 11, 2017), the Federal Circuit affirmed the district court’s determination that the case was “exceptional” under 35 USC 285, and the award of $2.5 million in attorneys’ fees.

After a patent infringement trial which resulted in a $61 million award to Dow, in a proceeding for supplemental damages, the patent was found to be invalid for indefiniteness.  After uncovering what it claimed was evidence of fraud on the part of Dow and its counsel, Nova filed an action for relief from the initial judgment.  The district court dismissed the action, and Dow sought sanctions and attorneys fees under 35 USC 285.  The district agreed with Dow finding NOVA’s claims for relief “just didn’t stand
up” and were “not even plausible.”

The Federal Circuit found nothing exceptional in the mere fact that NOVA filed a separate action because that was the only option available to challenge the earlier judgment.  However,  the Federal Circuit found that the substantive strength of a NOVA’s position could, and did, independently support an exceptional-case determination.

Nova also argued that it was error to compare the case to all patent cases, pointing out with this baseline an action to set aside a prior judgment would always be exceptional because, by necessity, it would “stand out” from the traditional patent infringement case.  The Federal Circuit decline to hold that the district court erred in comparing this case to other patent cases more generally.  The Federal Circuit found that any concern regarding the district court’s comparison was tempered by the fact that it did not hold that this case stood out merely because NOVA requested that a prior judgment be set aside.