Richards Layton & Finger
 

Chief Judge Stark Denies Motion for Attorneys' Fees a Second Time

November 3, 2016

In Honeywell Int’l, Inc. v. Nokia Corp., C.A. No. 04-1337-LPS (D. Del. Sept. 16, 2016), Chief Judge Stark, ruling from the bench, denied the defendants’ motion for attorneys’ fees, finding that the case was not exceptional under 35 U.S.C. § 285. The Federal Circuit had remanded the Court’s earlier denial of a motion for attorneys’ fees to take into account the changed standard and lower burden of proof established by the Supreme Court’s Octane Fitness and Highmark decisions.

According to the Court, the evidence presented by the plaintiffs, Honeywell International, Inc. and Honeywell Intellectual Properties (together, “Honeywell”), constituted a colorable basis for believing that certain of Honeywell’s own activities did not amount to an offer for sale (although on the merits the Court had found otherwise). Judge Stark also concluded that Honeywell performed an adequate pre-suit investigation and was entitled to rely on patents’ presumption of validity. The Court noted that Honeywell could have done more in its pre-suit investigation and acknowledged the hurdles, including the attorney-client privilege, that the defendants faced in trying to “prove a negative,” but on the record before the Court the investigation (including product teardowns) was found to be adequate.

Nor did the defendants’ “unproven” allegations of inequitable conduct show that the case was exceptional, according to Judge Stark. Honeywell’s positions on this defense were found to be reasonable, and the defendants had an opportunity to try the issue but declined to do so.

Key Points:  In closing, Judge Stark explained that motions for an exceptional case designation “come up at the end of the case when certain things are known that were not knowable in the past,” which poses a risk in adjudicating such motions that, “with hindsight, the case might look much easier than it was truly experienced in reality going forward.”