Federal Circuit Upholds Unusual Exceptional Case Finding On Issues Not Fully Litigated

In Thermolife International LLC v. GNC Corporation, Nos. 2018-1657, 1666 (May 1, 2019), the Federal Circuit upheld two awards of attorney’s fees for an exceptional case under 35 U.S.C. § 285 even though, in both cases, “the basis for the fee award had nothing to do with the only issues litigated to reach the judgment on the merits.”  Thermolife Int’l, slip op, at 3.  Specifically, the cases were found exceptional on the basis that the plaintiffs failed to conduct an adequate pre-filing investigation as to infringement. Id.  While only validity was fully litigated and adjudicated on a bifurcated case schedule and trial that excluded infringement, the Federal Circuit did not “see an abuse of discretion in the district court’s resting its exceptional-case determination on an examination of an issue – infringement, and specifically the basis for alleging infringement – that was neither fully adjudicated nor even fully litigated before judgment on the merits.”  Id. at 9, 16.  The Federal Circuit also found that under the circumstances of the case, the defendants were not required to provide early notice to the plaintiffs of defects in their infringement case so as to justify the fee award. Id. at 17-19.

Slip opinion available at http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/18-1657.Opinion.5-1-2019.pdf.