Checkpoint v. All-Tag was decided on June 5, 2017. There, a jury found Plaintiff Checkpoint’s patent not infringed, not invalid, and not unenforceable. After appeals to the Federal Circuit, and to the Supreme Court (in conjunction with Octane Fitness), the case returned to the district court on remand. On remand, the district court awarded Defendants All-Tag attorney fees, finding the case exceptional because of inadequate pre-suit investigations and improper motives behind the lawsuit. Checkpoint appealed.
The Federal Circuit reversed the attorney fee award.
The lawsuit was not objectively unreasonable. The district court erred in finding that Checkpoint brought suit for an improper purpose. Although Checkpoint had a large market share, had lawsuits against other asserted infringers, and had acquired competing producers, the record didn’t evince improper motive. “[M]otivation to harass or burden an opponent may be relevant to an exceptional case finding. However, motivation to implement the statutory patent right by bringing suit based on a reasonable belief in infringement is not an improper motive.”
No such harassment or abuse was shown here. There is a “presumption that an assertion of infringement of a duly granted patent is made in good faith.” And here, Checkpoint obtained two infringement opinions from counsel, and previously obtained judgements against All-tag for infringement of the Swiss counterpart of the patent-in-suit.
Further, the district court found that Checkpoint had sufficient evidence of infringement to survive summary judgment motions and a Daubert challenge, and to proceed to a jury trial. This is “an indication that the party’s claims were objectively reasonable.”
In finding the case exceptional, the district court also relied on the fact that Checkpoint’s experts did not test the accused product (manufactured in Belgium), but instead tested All-Tag’s products manufactured in Switzerland. This was error because the two products were the same, and no one contended otherwise. “There was no allegation of falsity or fraud or bad faith on the part of Checkpoint or its expert.”
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