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NOVA Chemicals Corp. (Canada) v. Dow Chemical Co.

Mere Filing of Action to Set Aside Judgment Cannot Lead to Damages Enhancement, But Lack of Substantive Support for Such a Complaint Can

NOVA Chemicals Corp. (Canada) v. Dow Chemical Co., (Fed. Cir. May 11, 2017) (PROST, Dyk, Hughes) (D. Del.: Stark) (3 of 5 stars)

Fed Cir affirms finding of exceptionality under § 285. NOVA had been found liable for infringement in 2010, but in 2013 (while supplemental damages proceedings were still ongoing) it filed a complaint for equitable relief from liability based on allegations that Dow had committed fraud on the court (relating to who actually owned the asserted patents). The district court had dismissed NOVA’s equity action as lacking plausibility.

To the extent the district court’s exceptionality finding was based on the mere fact that NOVA filed a complaint for equitable relief from liability for its infringement, which was subsequently found implausible, the district court erred. “A party whose only option for relief from a prior judgment is to file a separate action in equity should not be disincentivized from doing so if that party has a plausible basis for relief.” Op. at 8. However, the court did not abuse its discretion in basing its exceptionality finding on the substantive strength of NOVA’s equity arguments. The district court also did not err in basing its § 285 decision on comparison to this patent case to the full panoply of other patent cases. It rejects NOVA’s argument that the baseline for comparison should have been other actions to set aside a prior judgment. NOVA’s argument lacked legal authority, and the opinion declines to hold that the comparison to other cases should be so limited.

KEYWORDS: EXCEPTIONALITY (YES); MOTION FOR RELIEF FROM JUDGMENT