Spineology, Inc. v. Wright Medical Technology, Inc.
Decided: December 14, 2018
After a defendant wins on summary judgment, must the trial court continue to litigate damages and other undecided issues to determine if the plaintiff must pay its opponent’s attorney fees? In a harshly worded opinion, the Federal Circuit said it does not.
Spineology sued Wright Medical Technology for allegedly infringing its US patent RE42,757, which discloses a surgical tool for making hollow chambers in bone; Spineology’s infringement case turned on construction of the term “body,” which appeared in all of the asserted claims. The litigants urged different constructions for that term, but the district court’s Markman order declined to adopt either party's construction.
Wright and Spineology then filed cross-motions for summary judgment on infringement in which they continued to press their respective definitions of the disputed claim term. In ruling on these motions, the trial judge adopted Wright’s construction and granted summary judgment in its favor. The defendant then moved for attorney fees, arguing that Spineology’s meritless claim construction arguments, flawed damages theory and litigation misconduct made the case “exceptional” under 35 USC §285.
Wright lost that motion, and fared no better at the Federal Circuit. Judge Moore began the opinion by explaining that the Supreme Court’s 2014 Octane Fitness opinion defines an exceptional case as one that stands out from others with respect to: (1) the substantive strength of a party’s litigating position; or (2) the unreasonable manner in which a party litigated the case. She also noted that the Federal Circuit would reverse or vacate a decision on attorney fees only if the district court had abused its discretion.
Wright’s first argument on appeal was that Spineology should have dropped its proposed claim construction after the district court declined to adopt it in the Markman order. The Court rejected—and pointed out the hypocrisy in—this argument when it said that Wright “cannot fairly criticize Spineology for continuing to pursue a construction not adopted by the district court in the claim construction order, since the district court declined to adopt Wright’s proposed construction as well.” Wright also claimed that Spineology’s damages theory—which allegedly wrongly used the entire market value rule and a flawed royalty rate—was so unreasonable as to make the case exceptional, and that the district court abused it discretion by failing to fully assess the merits of Spineology’s damages case.
The Federal Circuit was unpersuaded. It said that it “will not force the district court, on a motion for attorney fees, to conduct the trial it never had by requiring it to evaluate [a plaintiff’s damages theory], and we—an appellate court—will certainly not conduct that trial in the first instance.” And on this record—where the district court never reached the parties’ damages arguments—Judge Moore said that the Court of Appeals was in no position to upend the trial judge’s determination that the patent owner’s damages theory was not meritless.
Wright’s third argument challenged as exceptional certain allegedly misleading conduct by Spineology. Here again, the Federal Circuit deferred to the lower court, explaining that the trial judge—having lived with the case for months—is better positioned to decide whether Spineology’s conduct made the case exceptional.
Judge Moore also denied Wright’s request to remand the case for more complete assessment of whether the "totality of the circumstances" renders the case exceptional, stating that the district court had no obligation to write an opinion that makes clear every consideration it has made in its analysis of this issue. The Judge concluded by warning future litigants that fee awards are not to be used “as a penalty for failure to win a patent infringement suit.”
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