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Stone Basket Innovations, LLC v. Cook Medical LLC

No Abuse of Discretion in Finding That Weak Case Was Not Exceptional for § 285 Purposes

Stone Basket Innovations, LLC v. Cook Medical LLC, __ F.3d __, (Fed. Cir. June 11, 2018) (Prost, WALLACH, Taranto) (S.D. Ind.: McKinney) (2 of 5 stars)

Fed Cir affirms denial of § 285 attorney fees. The district court did not abuse its discretion in concluding that the substantive strength of Stone Basket’s infringement position did not warrant fees. The opinion describes how even though Cook had assembled compelling prior art in invalidity contentions, and even though Stone’s inventor had conceded in deposition that there was “nothing novel about” a key limitation, “a strong or even correct litigating position is not the standard by which we assess exceptionality.” Op. at 7. The district court was also within its discretion to partially base its denial on the fact that Cook “took no actions to ensure a rapid termination of the instant litigation.” Id. at 9. The opinion describes how Cook’s failure to call out its belief that the litigation was exceptional supports a determination that, to the district court, Stone’s litigation did not stand out from others. The opinion rejects Cook’s argument that it was precluded from taking any action to accelerate resolution of the case while a motion to transfer venue was pending (the case was subsequently transferred from E.D. Tex. To S.D. Ind.). The district court also did not abuse its discretion in concluding that, notwithstanding a record of patent enforcement actions by Stone, Cook had not shown that Stone was suing for purposes only of forcing a settlement. While there were a number of other cases by Stone and its members, the record did not show that settlement activity rose to exceptional levels. The opinion also notes that here, Stone had litigated for over two years. In a footnote, the opinion also affirms the district court’s denial of fees under § 1927, as the case was not proved exceptional. It also affirms the denial of Cook’s other motions relating to attempted § 285 fees.

KEYWORDS: ATTORNEY FEES; SECTION 285; EXCEPTIONALITY