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Checkpoint Systems, Inc. v. All-Tag Security S.A

Finding of Exceptionality Absent Evidence of Bad Faith Was Abuse of Discretion

Checkpoint Systems, Inc. v. All-Tag Security S.A., 2017 U.S. App. LEXIS 9874 (Fed. Cir. June 5, 2017) (NEWMAN, Lourie, Moore) (E.D. Pa.: Tucker) (3 of 5 stars)

Fed Cir reverses exceptional case determination and award of attorney fees under § 285. The district court abused its discretion in concluding that Checkpoint’s conduct warranted an exceptionality finding. Though a party’s “motivation” in bringing a suit is relevant to exceptionality per Octane Fitness, 134 S. Ct. 1749 (2014), in this case the record indicated that Checkpoint’s belief in All-Tag’s infringement was reasonable, and there was no evidence of harassment or abuse, or other indicators of bad faith. Though the district court concluded that Checkpoint’s goal by the litigation was “to protect its own competitive advantage,” a patent right permits such protection. Op. at 6. The opinion also discusses how Checkpoint’s claims had survived summary judgment motions. And although the products tested by Checkpoint’s expert were, apparently, not the specifically-accused products, “There was no representation by All-Tag that the accused products were different from the tested products, and the district court did not so find.” Id. at 8.

KEYWORDS: ATTORNEY FEES; EXCEPTIONAL CASE; SECTION 285