Abstract Judgment Denial and Its Ramifications for Lawyer Charge Motions

by Dennis Crouch

In OneSubsea IP v. FMC Tech (Fed. Cir. 2023), the courtroom has affirmed a district courtroom denial of legal professional charges for the profitable defendant. A key holding within the case is that denial of abstract judgment serves as an enormous flashing signal that the case isn’t distinctive.

OSS sued FMC again in 2015 for infringing claims present in ten totally different patents all referring to subsea processing of hydrocarbons (oil and gasoline). This contains: including chemical substances, separating water and sand from the hydrocarbons; growing strain; and so on. The patents required a “circulate diverter meeting” to “divert fluids” to and from a processing space. The events argued concerning the phrase “divert.” Within the context of the invention, the district courtroom concluded that it required two totally different potential flowpaths, and that fluid circulate should be pressured to observe one as a substitute of the opposite. And easily altering instructions isn’t a diversion.

The 2-flowpath requirement was an issue for the patentee. FMC’s accused construction simply had one flowpath that handed by means of the processor as proven within the determine under.

The Proceedings: The district courtroom issued its declare development again in 2016, however relatively than rapidly granting abstract judgment of non-infringement, it stayed the case pending end result of parallel inter partes critiques difficult the patents’ validity. These IPRs resulted in lots of the claims being discovered invalid as apparent, with that willpower affirmed by the Federal Circuit with out opinion. In 2019, the district courtroom lifted the keep and the case moved towards trial. The district courtroom once more refused to grant abstract judgment of non-infringement. Based on the transcripts, FMC’s counsel offered 3,200 pages of paperwork illustrating the variations between the patented claims and the accused merchandise. Choose Bennett (S.D.Tex.) thought that depth of factual report was a bit an excessive amount of for a abstract judgment. “And you actually suppose I’m going to have the ability to grant abstract judgment on that?” Choose Bennett requested. Finally, Choose Bennett excluded OSS’s skilled testimony for misapplying its prior declare development and granted the abstract judgment of non-infringement. OSS didn’t attraction the dismissal.

Lawyer Charges: After profitable on the deserves, FMC moved for legal professional charges and non-taxable prices. The district courtroom denied these prices, discovering the case to be not distinctive. On attraction, the Federal Circuit affirmed, discovering no abuse of discretion.

Part 35 U.S.C. § 285 permits a district courtroom to award affordable legal professional charges to the prevailing occasion; with the caveat that it could solely accomplish that “in distinctive circumstances.” Beneath the 2014 choices of Octane Health and Highmark, the Part 285 evaluation is a versatile one with the district courtroom having substantial discretion in its willpower of whether or not a specific case is “distinctive” and whether or not payment shifting is acceptable. On this case, the courtroom famous a “totality of the circumstances” method needs to be taken on a “case-by-case” foundation. The district courtroom can think about whether or not the case is an outlier from others by way of the “substantive power of a celebration’s litigating place . . . or the unreasonable method during which the case was litigated.” Octane Health.

As a result of district courts are given discretion in making these determinations, the choices are given deference on attraction and solely overturned primarily based upon both: (1) clear error of judgment, (2) clear error in factual discovering, or (3) a fabric error of regulation. (Observe right here, the error of regulation is reviewed de novo).

Deference and Successor Judges: Right here, Choose Bennett stepped into the lawsuit on the very finish of the case, changing Choose Atlas who moved to senior standing.  On attraction, FMC argued that no deference needs to be given to Choose Bennett’s resolution as a result of he had not “lived with the case.”  In Highmark, the Supreme Court docket grounded its resolution to offer deference to district courtroom choices upon the truth that district courts are far more into the weeds of the litigation and thus higher positioned to guage exceptionally unhealthy conduct.  As a result of Choose Bennett determined the case on written report with out even a listening to, FMC recommended that his resolution shouldn’t be given deference.   On attraction although the Federal Circuit rejected that evaluation primarily based upon caselaw from the opposite circuits persistently holding that deference can be given to successor judges discretionary choices.  “The successor choose receives the identical deferential evaluation on attraction as the unique choose would have obtained.” Slip Op.  Additional, “FMC had ample discover {that a} successor choose would resolve its § 285 movement and didn’t object.”

Distinctive Case: In wanting on the distinctive case query, the appellate courtroom concluded that FMC’s failure to attain an early abstract judgment was its personal fault. Mainly, the unique movement for abstract judgment was deemed “unpersuasive.”  The appellate courtroom then defined the significance of abstract judgment denial:

When a district courtroom, totally conscious of the competing contentions of the events, declines to finish the case on abstract judgment and permits a plaintiff’s case to proceed, the district courtroom might have successfully decided that the place of the occasion opposing abstract judgment isn’t objectively baseless, making it almost unattainable for the plaintiff’s case (on the difficulty that was the topic of the abstract judgment movement) to “stand out” as missing substance at the moment.

Denial of charges affirmed.

US Patent Nos. 6,637,514, 7,111,687, 8,066,076, 8,122,948, 8,272,435, 8,281,864, 8,540,018, 8,573,306, 8,746,332, and eight,776,893.