Stone Basket v. Cook Medical was decided on June 11, 2018 on appeal from the Southern District of Indiana. After the PTAB cancelled all asserted claims following an IPR, the district court dismissed the case with prejudice. Defendant Cook then moved for attorney fees. The district court denied the motion. Cook appealed.
The Federal Circuit affirmed the denial of attorney fees.
The district court did not abuse its discretion in concluding that plaintiff Stone’s litigation position did not stand out from others. Cook’s invalidity contentions did not provide clear notice of the patent’s invalidity for obviousness. The relevant reference cited in the contentions was listed on the face of the asserted patent, and thus “the examiner is presumed to have considered it.” “Having been issued a valid patent, Stone was entitled to a presumption of good faith in asserting its patent rights against Cook in the form of a suit for infringement. … Cook’s invalidity contentions, based on prior art already considered by the Examiner and with no further explanation, do not make the substantive strength of Stone’s position exceptional.” The inventor’s deposition testimony regarding the novelty and origin of a claim limitation did not render Stone’s litigation position exceptionally weak. Taken alone, the inventor’s post-issuance testimony “neither establishes the invalidity of the patent on obviousness grounds nor constitutes a material false statement to the USPTO.”
Moreover, Cook “fail[ed] to provide early, focused, and supported notice of its belief that it was being subjected to exceptional litigation behavior.” “[A] party cannot simply hide under a rock, quietly documenting all the ways it’s been wronged, so that it can march out its parade of horribles’ after all is said and done.” Cook waited “nearly a year after service of its invalidity contentions, and nine months after the inventor’s statements regarding the [claim element’s] novelty, before informing Stone that, if Stone refused to drop its case, Cook intended to file a motion for attorneys’ fees.”
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Stone’s conduct in other litigation did not render this case exceptional. The Federal Circuit disagreed with Cook’s argument that Stone’s filing of more than 400 cases demonstrated a “plan to force nuisance settlements, constituting exceptional litigation conduct.” Evidence of record “reveal[ed] that Stone participated in each stage of the litigation for nearly two years and tested the merits of its claims,” presenting claim construction arguments before the District Court and responses to the IPR petition before the PTAB.
Stone Basket Innovations, LLC v. Cook Med. LLC, 892 F.3d 1175 (Fed. Cir. 2018)