Intellectual Ventures I v. Trend Micro was decided on December 19, 2019 on appeal from the District of Delaware. In a related trial by plaintiff Intellectual Ventures against another defendant on the same patents, the jury found infringement of some claims and noninfringement of others. During that trial Intellectual Ventures’ expert testified regarding the claims in a manner inconsistent with his testimony in the case against defendant Trend Micro. The district court granted Trend Micro’s motion for JMOL of invalidity under §101, and granted Trend Micro’s motion for attorney fees, concluding that “Intellectual Ventures’s conduct was exceptional solely with respect to… its expert’s changed testimony.” “Considering whether the case overall is exceptional, however, the district court expressly found it was not.” Intellectual Ventures appealed.
The Federal Circuit vacated the finding of exceptionality and grant of attorney fees and remanded.
“It is not clear that the district court applied the proper legal standard when it considered whether the case was exceptional under § 285.” The district court concluded that Intellectual Ventures’ case was not “objectively unreasonable” and that the “case overall” was not exceptional. The district court, however, found that the “circumstances surrounding the expert’s changed opinion stand out from other cases.” “Instead of determining whether the case was exceptional, it appears that the district court may have focused on whether one discrete portion of the case” was exceptional. This is not the proper analysis. Under the statute, the district court “should have determined whether the circumstances surrounding the expert’s changed opinion were such that, when considered as part of the totality of circumstances in the case, the case stands out as exceptional.”
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“[A] district court has discretion, in an appropriate case, to find a case exceptional based on a single, isolated act.” And “after determining that a case is exceptional, a court must award fees in an amount that bears some relation to the extent of the misconduct.”
The Federal Circuit remanded for an analysis under the proper legal standard.