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Federal Circuit Upholds $4.7M Fee Awards in "Exceptional" Patent Case

January 4, 2012 | Posted in : Expenses / Costs, Fee Award, Fee Entitlement, Fee Issues on Appeal, Fee Jurisprudence, Fees as Sanctions / Bad Faith

A recent NLJ story, “Federal Circuit Upholds $4.7M Fee Award to Cordis Over MarcTec’s Litigation Misconduct” reports that the U.S. Court of Appeals for the Federal Circuit has upheld a lower court’s award of nearly $4.7 million in attorney and expert fees to patent defendant and Johnson & Johnson subsidiary Cordis Corp. for its opponent’s litigation.  On Jan. 3, a unanimous panel in MarcTec LLC v. Johnson & Johnson affirmed rulings by Chief Judge David Herndon of the Southern District of Illinois.

Herndon granted Cordis’ motion to declare the case exceptional under the U.S. Patent Code and award Cordis $3.8 million for attorney fees and expenses and $809,000 for expert fees and expenses.  Judge Kathleen O’Malley, who authored the ruling, wrote that the trial court did not err in finding the case exceptional and did not abuse its discretion by awarding expert witness fees.

In the underlying case, MarcTec filed suit in 2007 claiming Cordis’ Cypher stent infringed two of MarcTec patents for “heat bondable material” that is “bonded” to a surgical device or implant.  The district court granted Cordis’ motion for summary judgment.  Cordis then asked the court to declare MarcTec’s suit exceptional and to award Cordis its attorney and expert witness fees.  The trial court found that MarcTec’s infringement allegations were “baseless” and “frivolous” and that it acted in “bad faith”.

On appeal, the federal appeal panel found that MarcTec filed an “objectively baseless lawsuit in bad faith.”  The panel also supported the lower court’s expert witness fee award because Cordis was forced to incur expert witness expenses “to rebut MarcTec’s unreliable and irrelevant expert testimony,” and it’s spending wasn’t recoverable under the section of the Patent Code that allows the recovery of attorney fees in exceptional cases.