Updated: Nov 10
B.E. Technology, L.L.C., Plaintiff-Appellant
Facebook, Inc., Defendant-Appellee
Decided: October 9, 2019
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.