Attorney Fees For Post-Grant Patent Challenge Proceedings Before The USPTO May Be Recoverable In Exceptional Cases Under 35 U.S.C. § 285

Parties accused of patent infringement are turning more and more to post-grant challenge proceedings at the United States Patent and Trademark Office ("USPTO") as a faster and cheaper means for invalidating the asserted claims. A recent federal district court order indicates that the fees and costs associated with such proceedings may be recoverable if the underlying infringement suit is declared "exceptional" under 35 U.S.C. § 285.

On August 19, 2015, the United States District Court of the Southern District of California awarded defendant Southwest Airlines Co. nearly $400,000 in attorney fees and costs related to an inter partes reexamination of U.S. Patent No. 6,738,770 (the "'770 patent"). Order Granting Def'ts Application for Fees and Costs, Deep Sky Software, Inc. v. Southwest Airlines Co., Case No. 10-cv-1234-CAB, Dkt. No. 49 (S.D. Cal. Aug. 19, 2015). Southwest was sued for infringement of the '770 patent in June 2010 by patent owner Deep Sky. Southwest filed a request for inter partes reexamination in April 2011, and the parties jointly moved for a stay pending the outcome of the reexamination, to which the court agreed. The reexamination concluded in December 2014, with all of the asserted claims of the '770 patent found invalid by the Patent Trial and Appeal Board.

The court previously declared the case exceptional under § 285 on June 1, 2015. Order Granting Def'ts Mot. to find this an "Exceptional Case," Deep...