In MarcTec LLC v. Johnson & Johnson, the Federal Circuit upheld the district court’s finding that the case was “exceptional” under 35 USC § 285 and upheld its award of $3,873,865.01 in attorney fees and expenses and $809,788.02 in expert fees. It is interesting to consider the factors the court considered in upholding these awards.
The Patents At Issue
The patents at issue were U.S. 7,128,753 and U.S. 7,217,290. Both relate to surgical devices for implantation having a polymer material “bonded” to the implant.
The Award of Attorney Fees
The Federal Circuit decision provides a detailed summary of the underlying facts of the case, including relevant portions of the prosecution history, claim construction, expert testimony and related proceedings.
With regard to the award of attorney fees, the Federal Circuit determined that the district court had “made sufficient factual findings to support the conclusion that MarcTec filed an objectively baseless lawsuit in bad faith.” The Federal Circuit cited three specific district court findings:
- During prosecution, the applicant had amended the claims to make clear that the invention “required the application of heat to a heat-bondable material,” while documents produced in discovery show that the relevant aspect of the accused device is made “without the use of heat.”
- During prosecution, the applicant “represented to the PTO that the claims exclude stents in order to obtain allowance,” while the accused device is a stent.
- During litigation, MarcTec pursued its frivolous action “by relying on mischaracterizations of the claim construction . . . and expert testimony that did not meet the requirements for scientific reliability or relevance . . . .”
With regard to claim construction, MarcTec urged the court to construe the claims based on their plain language without reference to the specification. After the court had construed the claims such that the term “bonded” means “bonded by the application of heat,” MarcTec argued that the court’s claim construction “did not actually require use of heat at the point when the polymers were applied to the stent,” but would be satisfied “as long as heat was used at ay point during the manufacturing process.” The Federal Circuit commented that “[e]ven a cursory review of the record reveals how frivolous this contention was when made.”
The Award of Expert Fees
The Federal Circuit noted that a district court has “inherent authority ‘to impose sanctions in the form of reasonable expert fees,’” although this authority usually is reserved for cases involving “fraud or bad faith.” Here, the district court had justified its award of expert fees by MarcTec’s filing of a “frivolous” action, and by MarcTec’s “bad faith” in continuing to pursue the case “when it had no basis for asserting infringement.”
The Federal Circuit stated that it is “a better practice” for district courts to “analyze expert witness fees separately and to explain why an award of attorney fees under § 285 is insufficient,” but upheld the award here because (i) the expert witness fees were incurred “to rebut MarcTec’s unreliable and irrelevant expert testimony” and (ii) the amount was not compensable under § 285. The Federal Circuit concluded:
Because MarcTec’s vexatious conduct and bad faith increased the cost of litigation in ways that are not compensated under § 285, we find that the district court did not abuse its discretion in awarding expert fees.
