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ThermoLife International LLC v. GNC Corp.

Fed Cir Affirms Fee Award for Lack of Adequate Pre-Suit Investigation

ThermoLife International LLC v. GNC Corp., __ F.3d __, 2019 WL 1925696 (Fed. Cir. May 1, 2019) (TARANTO, Bryson, Stoll) (S.D. Cal.: Sammartino) (3 of 5 stars)

Fed Cir affirms determination of exceptionality and award of attorney fees. The district court did not abuse its discretion in determining that ThermoLife and Stanford (together, “ThermoLife”) had failed to do an adequate pre-suit investigation. The asserted patents (owned by Stanford, exclusively licensed by ThermoLife) relate to the use of arginine and lysine to enhance vascular function. The district court did not abuse its discretion in striking a declaration from ThermoLife’s lead counsel describing his pre-suit investigation. The declaration was untimely (after oral argument on fee motions), and deprived GNC from additional discovery. The district court also did not abuse discretion in resting its exceptional case determination on the infringement issue, notwithstanding that infringement had not been adjudicated nor fully litigated before judgment (the case was resolved after a bench trial on invalidity). The opinion notes that predicated an exceptionality determination on a non-litigated issue is atypical, but determines that it “ha[d] been pointed to no denial of plaintiffs’ procedural rights in adjudicating the exceptional-case question in this matter. Plaintiffs did not request a hearing, they had an opportunity to meet the contentions made in the fees motion, and they have made no concrete persuasive argument for what discovery was needed and requested but denied.” Op. at 17.

The opinion rejects ThermoLife’s contention that the fee award should be set aside because the recipients did not “give early notice of the defects in plaintiffs’ infringement assertions[.]” Op. at 17. The opinion describes the flexibility of the § 285 inquiry, and declines to hold that such notice is rigidly required.

The district court did not abuse its discretion in finding the pre-suit investigation inadequate. There was no reversible error in the district court’s emphasis of claim 1, and the opinion notes that ThermoLife had not made any case for how its infringement case was stronger for other claims. The district court also did not err in determining that ThermoLife’s claim could only be infringed by application of 1 gram (or more) of L-arginine. The record supported a determination that such was an “amount sufficient to enhance” certain metabolic processes recited in the claim. ThermoLife had failed to properly apply that limitation in its pre-suit investigation, and it was not an abuse of discretion to charge them with knowledge of this minimum dosage.

The district court also did not reversibly err in determining that ThermoLife had not performed an adequate pre-suit investigation as to this one-gram minimum, as all products were publicly available, and the record included no evidence of ThermoLife testing any of them. While testing of an accused product is not always required as part of pre-suit investigation, the district court did not err in determining that there was no substitute for testing here.

Finally, the district court’s exceptionality determination was not an abuse of discretion, taking into account the pattern of conduct surrounding ThermoLife’s suits, which the district court reasonably found evidenced an absence of careful pre-suit investigation.

KEYWORDS: EXCEPTIONAL CASE; ATTORNEY FEES; INFRINGEMENT