Romag Fasteners v. Fossil was decided on August 9, 2017 on appeal from the District of Connecticut. There, after the jury returned a verdict for trademark and patent infringement for plaintiff Romag, the district court granted attorney fees under the Patent Act but not under the Lanham Act, finding that defendant Fossil didn’t withdraw its defenses of anticipation and obviousness until after trial, and that its indefiniteness defense “bordered on frivolous.” In awarding fees, the district court did not consider Romag’s litigation conduct. The district court did not award fees under the Lanham Act because there was no bad faith, fraud, or willfulness by Fossil. After denying Fossil’s motion for JMOL of noninfringement, the district court did not grant Romag attorney fees based on this denial. Both parties appealed.
The Federal Circuit vacated the award of attorney fees and remanded.
Based on the plain language of the Patent and Lanham Acts, and the legislative history of the Lanham Act, the Federal Circuit concluded that the Second Circuit would hold that, in light of Octane Fitness, the Lanham Act should have the same standard for recovering attorney’s fees as the Patent Act. Under both acts, “an exceptional case is simply one that stands out from others with respect to the substantive strength of a party’s litigating position or the unreasonable manner in which the case was litigated, considering the totality of the circumstances.” The district court erred in holding that Octane does not apply to trademark cases in the Second Circuit.
The district court abused its discretion in awarding attorney fees under the § 285 of the Patent Act.
First, there appeared to be “full awareness between the parties and the district court” that the patent invalidity defenses of anticipation and obviousness were withdrawn before trial; there was no support for the district court finding that Fossil aggressively pursued invalidity counterclaims to prolong litigation; and the district court made no finding that Fossil’s anticipation and obviousness defenses were objectively unreasonable.
Second, Fossil’s indefiniteness defense was not objectively unreasonable. The district court erred in interpreting the prior presiding judge’s grant of summary judgment of definiteness as showing that the prior judge found Fossil’s indefiniteness evidence “woefully inadequate.” The Federal Circuit also set aside the award of expert witness fees incurred in connection with the motion for summary judgement on indefiniteness, as the award of expert fees was based on the erroneous finding that Fossil’s indefiniteness defense was meritless.
Third, the district court erred in declining to consider Romag’s conduct earlier during the litigation that the district court had sanctioned. Romag was aware of Fossil’s infringement in May of 2010, but unreasonably delayed bringing suit until November 2010, “carefully tim[ing] this suit to take advantage of the imminent holiday shopping season.” “Romag’s misconduct cannot be disregarded on the theory that failure to award fees is equivalent to double-sanctioning Romag. Indeed, the fact that this misconduct has already been sanctioned should be weighed more heavily, rather than be excluded, in the 35 U.S.C. § 285 analysis.”
The district court did not err in refusing to award attorney fees based on the denial of Fossil’s motion for JMOL. The district court relied on more than the denied motion to deny attorney fees, finding that “Fossil’s arguments with respect to non-infringement were not entirely groundless.”
On remand, the district court will “consider the Lanham Act and the Patent Act attorney’s fees and the claimed expert fees under the correct standard.”
Judge Newman concurred-in-part and dissented-in-part, arguing that the district court did not abuse its discretion in awarding attorney fees under the Patent Act because “Fossil persisted in retaining the invalidity defenses and counterclaims for over three years, and repeatedly equivocated as the trial date approached;” and “Romag incurred significant expense and burden in preparing to defend patent validity, much of which could have been spared had Fossil been more straightforward concerning its litigation intentions.”
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