“Exceptional Case” Findings Must Consider The Full Case

INTELLECTUAL VENTURES I LLC v. TREND MICRO INCORPORATED

Before Dyk, Taranto, and Stoll.  Appeal from the Delaware District Court

Summary: An exceptional case finding may be based on a single isolated act, but the court must still find the case as a whole is exceptional.

Intellectual Ventures (“IV”) sued Trend Micro for patent infringement.  The district court found IV’s expert changed his opinion and offered conflicting opinions in a copending action involving the same patents.  After prevailing on the merits, Trend Micro moved for an exceptional case finding under Section 285.  The district court found the case as a whole was not exceptional, but the circumstances surrounding the expert’s testimony were exceptional.  The district court awarded attorneys’ fees to Trend Micro and IV appealed.

The Federal Circuit held that a district court may find a case exceptional based on a single isolated act and not a pattern of acts.  Further, the amount of attorneys’ fees must “bear some relation to the extent of the misconduct.”  However, courts must still find that the case as a whole is exceptional, not just a portion of the case.  Because the district court did not find the overall case exceptional, the Federal Circuit vacated and remanded for a decision under the proper legal standard. 

Editor: Paul Stewart