District Court had discretion to deny fees for prior en banc appeal and fees for fees

Fed. Cir. affirmed denial of (1) attorney fees for a prior appeal and remand, (2) fees incurred successfully obtaining fees on the first part of the case, (3) post-judgment interest running from a since vacated judgment, and (4) pre-judgment interest on fees.

Therasense, Inc. v. Becton Dickinson and Co., __ F.3d __ (Fed. Cir. Mar. 12, 2014) (RADER, Newman, Dyk (dissenting in part)) (N.D. Cal. Alsup) (2 of 5 stars)

Background: The district court initially found this case exceptional after finding non-infringement, invalidity, and inequitable conduct, and it awarded fees through 2009. A subsequent appeal on inequitable conduct produced a split panel decision and a split en banc decision, which announced a new legal standard. On remand, the district court again found inequitable conduct and reinstated the prior fee award through 2009, but refused to add fees for the appeal and remand proceedings.

Fees for the Prior Appeal and Remand: The Fed. Cir. discerned no abuse of discretion in refusing to award additional fees. The terms of the 2009 order did not entitle the defendant to appeal fees because the first finding of inequitable conduct was not "upheld on appeal," even though the district court reached the same determination again on remand. Moreover, the first appeal could not be deemed exceptional given the split decisions. The Fed Cir rejected defendant's argument that the prior appeal was a bad faith attempt to delay the inevitable: "Expressions of outrage and suspicion in the form of attorney argument are not evidence of bad faith. Nor does the mere act of pursuing appellate remedies by itself suggest an abuse of the legal system." Slip op. at 7. Finally, the defendant was not a "prevailing party" on the first appeal, which vacated the district court's ruling, so it could not obtain fees even if the appeal were exceptional.

Fees for Fees: The district court did not abuse its "broad discretion" in declining to award fees incurred seeking fees where it found that the appeal of the fee award was not frivolous, that there was no bad faith, and no litigation misconduct. Moreover, the "fees for fees" issue is "not unique to patent law," so Ninth Circuit precedent that "fees on fees are deemed 'excludable' and that no award of fees is 'automatic,'" id at 8-9, further supported the denial.

Interest Issues: "[W]here a previous judgment is vacated, any post-judgment interest must be determined based on the more recent judgment." Id. at 9. Therefore, post-judgment interest on the fee award was limited to the date it was reinstated on remand.

Dissent: Judge Dyk believed that the district court was under the legally erroneous impression that it could not award fees for the first appeal unless that appeal was independently exceptional, when, in fact, it had the power to treat the case as a whole as exceptional and award fees for everything, regardless of the merits of any individual stage. Dissent at 2-3. Judge Dyk also believed that, under Supreme Court and Ninth Circuit precedent, "fees for successful fee petitions should be allowed," and excluded only to the extent the prevailing party doesn't recover all its fees. Id. a 4.