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NC Judge Says Patent Infringement Case Not ‘Extraordinary’ Enough to Award Attorney’s Fees to Defendants

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Judge Max O. Cogburn Jr. of the Western District of North Carolina on Thursday denied the “rare remedy” of attorney’s fees in patent litigation to defendants who attempted to demonstrate that the suit brought against them was notable enough to yield such an award.

Composite Resources Inc. (CRI) originally filed suit against Combat Medical Systems LLC and Alphapointe, alleging that the defendants’ Tactical Mechanical Tourniquet product infringed on two of the plaintiff’s patents.

Despite the court ultimately finding that the defendants’ product did not infringe on the plaintiff’s patents, the defendants were not satisfied; they moved to recover attorney’s fees, alleging that CRI’s motivation behind its suit was to block the defendants from competing in the same market and lodging other claims in an attempt to prove that its circumstances were “extraordinary” enough to warrant an award of fees.

The judge explained that in patent litigation, pursuant to a provision in the Patent Act added in 1946, courts have held that attorney’s fees are not awarded “as a penalty for failure to win a patent infringement suit” and that they only are appropriate “in extraordinary circumstances,” citing Park-In-Theaters, Inc. v. Perkins. Similarly, the Supreme Court of the United States asks whether the case is “exceptional,” defined as “stand(ing) out from others with respect to the substantial strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.”

The defendants felt their case was exceptional based on their contentions that “CRI engaged in frivolous, unreasonable behavior throughout the course of this lawsuit” through allegedly conducting a sham litigation meant to limit competition that lacked any valid infringement claims. The court, contrarily, found that the plaintiffs did not sufficiently allege these facts so as to paint the purported exceptional nature of the case.

“CRI may have been partially motivated to file this suit in order to protect its market share, but CRI also clearly appears motivated by a desire to protect its intellectual property,” the court posited. “Second, CRI’s infringement arguments throughout this lawsuit have not been “nonsensical” as Defendants allege. On the contrary, CRI’s claims required rigorous analysis from this Court as evidenced by the Court’s decisions not to resolve the case on earlier Motions for Summary Judgment. … Third, Defendants have not demonstrated that CRI’s patent infringement claims were entirely baseless.”

The plaintiff is represented by Nexsen, Pruet, Jacobs & Pollard, Snell & Wilmer LLP, Burr & Forman LLP, and Falls Law Firm PLLC. The defendants are represented by Parker, Poe, Adams & Bernstein LLP, Kutak Rock LLP, and Sneed PLLC.

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