Unlucky at the PTAB, unlucky in court: a Federal Circuit appeal about $4,000

Updated: Nov 10, 2020

Fed. R. Civ. P. 54(d)(1) says that in a litigation, costs (other than attorney’s

fees) should be allowed to the “prevailing party.” If a patent litigation is

stayed pending an Inter Partes Review (and the IPR’s final decision

invalidates the patent’s claims), who is the “prevailing party” under Rule

54? In its B.E. Technology decision, the Federal Circuit held that because it

had successfully “rebuffed” the patent owner's claims, the accused infringer

is the prevailing party.

In this case, B.E. Technology sued Facebook for patent infringement;

Facebook responded by filing an IPR petition to challenge the validity of the

asserted claims. The District Court stayed the litigation after the PTAB

granted Facebook’s petition. After the Board found B.E. Technology’s

claims to be invalid, the District Court dismissed the case before it as moot,

and awarded Facebook—the prevailing party—about $4,400 in costs.

On appeal, B.E. Technology argued that because its case was dismissed as

moot (and therefore not decided on the merits), the District Court’s decision

lacks the “judicial imprimatur” needed to give rise to prevailing party status.

In rejecting this argument, the Federal Circuit said that two Supreme Court

cases—Buckhannon from 2001, and CRST from 2016— establish that a

defendant can prevail by “rebuffing” the plaintiff’s claim, regardless of the

reason for the court’s decision, and even if there is no decision on the merits.

In this case, Facebook had clearly rebuffed B.E. Technology’s claims by

invalidating the asserted patent. And by dismissing the case for mootness—

again, because the claims had been invalidated in an IPR—the District Court

placed “a judicial imprimatur upon B.E.’s claim for patent infringement,”

and properly found Facebook to be the prevailing party.

2019.10 Case summary of B

.E Tech v Faceb

E TECH V FACEB • 66KB

CHAO HADIDI STARK & BARKER LLP