Section 285 Did Not Allow For IPR Fees

• Published date: 01 August 2022
• Subject Matter: Intellectual Property, Patent
• Law Firm: Jones Day
• Author: Ms Emily J. Tait and Pranita Dhungana

The Patent Act provides that "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." 35 U.S.C. ' 285. In a recent denial of a motion for attorney fees pursuant to ' 285, an Ohio district court found that fees accrued during a successful inter partes review ("IPR") proceeding are not recoverable by the prevailing patent challenger. See Sherwood Sensing Sols. LLC v. Henny Penny Corp., 2022 U.S. Dist. LEXIS 90872, *1 (S.D. Ohio May 20, 2022).

By way of background, plaintiff Sherwood filed suit against Henny Penny for patent infringement and Henny Penny thereafter petitioned the PTAB for IPR of the asserted patent. The district court stayed the case over Sherwood's objection and the PTAB granted review. The PTAB ultimately cancelled the patent as anticipated, leaving Sherwood no choice but to withdraw the district court case. Id. *4.

In denying Henny Penny's motion for fees pursuant to ' 285, the court concluded that fees accrued during an IPR proceeding fell outside the scope of the statute and are thus not recoverable. Henny Penny argued that Sherwood's "conduct in- and out- of IPR makes this case exceptional[,]" id. at *7, but the court reasoned that conduct "in" an IPR proceeding pending before the PTAB is not part of the "case" pending before the "court" - which are the words specifically used in 35 U.S.C. ' 285.

The court was unpersuaded by Henny Penny's argument that an IPR should be considered part of a patent infringement case "particularly where . . . IPR resolves the patent infringement issue" that was pending in the district court case. Id. at *9. In support of this argument, Henny Penny cited PPG Indus., Inc. v. Celanese Polymer Specialties Co, 840 F.2d 1565 (Fed. Cir. 1988), in which the Federal Circuit held that an alleged patent infringer was entitled to fees after the USPTO invalidated the patent in a reissue proceeding. But the court distinguished this case from plaintiff's cited authority, Dragon Intell. Prop. LLC v. Dish Network LLC, 956 F.3d 1358 (Fed. Cir. 2020), in which the Federal Circuit, in dicta, stated that "we see no basis in the Patent Act for awarding fees under ' 285 for work incurred in inter partes review proceedings that Appellants voluntarily undertook." Sherwood, 2022 U.S. Dist. LEXIS 90872, at *6 (quoting Dragon, 956 F.3d at 1362).

The court found the two cases distinguishable and was persuaded by the reasoning of the Dragon dicta. Whereas in PPG the...