Abstract Judgment Denial and Its Ramifications for Lawyer Charge Motions

by Dennis Crouch

In OneSubsea IP v. FMC Tech (Fed. Cir. 2023), the court docket has affirmed a district court docket denial of legal professional charges for the profitable defendant. A key holding within the case is that denial of abstract judgment serves as a giant flashing signal that the case isn’t distinctive.

OSS sued FMC again in 2015 for infringing claims present in ten completely different patents all referring to subsea processing of hydrocarbons (oil and fuel). This consists of: including chemical compounds, separating water and sand from the hydrocarbons; growing stress; and so forth. The patents required a “stream diverter meeting” to “divert fluids” to and from a processing space. The events argued in regards to the phrase “divert.” Within the context of the invention, the district court docket concluded that it required two completely different potential flowpaths, and that fluid stream have to be pressured to observe one as an alternative of the opposite. And easily altering instructions isn’t a diversion.

The 2-flowpath requirement was an issue for the patentee. FMC’s accused construction simply had one flowpath that handed by way of the processor as proven within the determine under.

The Proceedings: The district court docket issued its declare development again in 2016, however somewhat than shortly granting abstract judgment of non-infringement, it stayed the case pending end result of parallel inter partes evaluations difficult the patents’ validity. These IPRs resulted in most of the claims being discovered invalid as apparent, with that willpower affirmed by the Federal Circuit with out opinion. In 2019, the district court docket lifted the keep and the case moved towards trial. The district court docket once more refused to grant abstract judgment of non-infringement. Based on the transcripts, FMC’s counsel offered 3,200 pages of paperwork illustrating the variations between the patented claims and the accused merchandise. Decide Bennett (S.D.Tex.) thought that depth of factual report was a bit an excessive amount of for a abstract judgment. “And you actually suppose I’m going to have the ability to grant abstract judgment on that?” Decide Bennett requested. Finally, Decide Bennett excluded OSS’s knowledgeable testimony for misapplying its prior declare development and granted the abstract judgment of non-infringement. OSS didn’t attraction the dismissal.

Lawyer Charges: After profitable on the deserves, FMC moved for legal professional charges and non-taxable prices. The district court docket denied these prices, discovering the case to be not distinctive. On attraction, the Federal Circuit affirmed, discovering no abuse of discretion.

Part 35 U.S.C. § 285 permits a district court docket to award cheap legal professional charges to the prevailing celebration; with the caveat that it could solely accomplish that “in distinctive instances.” Beneath the 2014 choices of Octane Health and Highmark, the Part 285 evaluation is a versatile one with the district court docket having substantial discretion in its willpower of whether or not a selected case is “distinctive” and whether or not charge shifting is suitable. On this case, the court docket famous a “totality of the circumstances” strategy needs to be taken on a “case-by-case” foundation. The district court docket can contemplate whether or not the case is an outlier from others by way of the “substantive power of a celebration’s litigating place . . . or the unreasonable method by which the case was litigated.” Octane Health.

As a result of district courts are given discretion in making these determinations, the selections are given deference on attraction and solely overturned based mostly upon both: (1) clear error of judgment, (2) clear error in factual discovering, or (3) a cloth error of legislation. (Observe right here, the error of legislation is reviewed de novo).

Deference and Successor Judges: Right here, Decide Bennett stepped into the lawsuit on the very finish of the case, changing Decide Atlas who moved to senior standing.  On attraction, FMC argued that no deference needs to be given to Decide Bennett’s choice as a result of he had not “lived with the case.”  In Highmark, the Supreme Courtroom grounded its choice to present deference to district court docket choices upon the truth that district courts are far more into the weeds of the litigation and thus higher positioned to evaluate exceptionally unhealthy habits.  As a result of Decide Bennett determined the case on written report with out even a listening to, FMC urged that his choice shouldn’t be given deference.   On attraction although the Federal Circuit rejected that evaluation based mostly upon caselaw from the opposite circuits constantly holding that deference can also be given to successor judges discretionary choices.  “The successor decide receives the identical deferential assessment on attraction as the unique decide would have obtained.” Slip Op.  Additional, “FMC had ample discover {that a} successor decide would determine its § 285 movement and didn’t object.”

Distinctive Case: In trying on the distinctive case query, the appellate court docket concluded that FMC’s failure to attain an early abstract judgment was its personal fault. Principally, the unique movement for abstract judgment was deemed “unpersuasive.”  The appellate court docket then defined the significance of abstract judgment denial:

When a district court docket, totally conscious of the competing contentions of the events, declines to finish the case on abstract judgment and permits a plaintiff’s case to proceed, the district court docket might have successfully decided that the place of the celebration opposing abstract judgment isn’t objectively baseless, making it almost unattainable for the plaintiff’s case (on the problem that was the topic of the abstract judgment movement) to “stand out” as missing substance at the moment.

Denial of charges affirmed.

US Patent Nos. 6,637,514, 7,111,687, 8,066,076, 8,122,948, 8,272,435, 8,281,864, 8,540,018, 8,573,306, 8,746,332, and eight,776,893.