Integrated v. Rudolph is a nonprecedential case decided on October 21, 2015, up on appeal for the second time from the District of Arizona. There, the jury returned a verdict of infringement and willfulness. At trial, it was discovered that defendant Rudolph continued to contest infringement even though its CEO personally thought that Rudolph infringed. Following the verdict, the district court trebled damages, granted a broad injunction, and found the case exceptional under § 285. The exceptionality finding was based on Rudolph’s conduct during the litigation and the willfulness finding. Rudolph then drafted a stipulation in which it agreed not to contest the reasonableness of plaintiff Integrated’s requested fee award of $3,252,228.50. The judge accepted the stipulation and awarded $3,252,228.50 in attorney fees. Rudolph appealed. On appeal, the Federal Circuit reversed the finding of infringement as to some products, and vacated the willfulness finding, the trebled damages, and the injunction. Because the exceptional case finding relied on the vacated willful infringement finding, the Federal Circuit remanded the attorney fees issue. On remand the district court reinstated its exceptional case determination based on the “striking weakness of Rudolph’s position regarding [its machines], as well as the unreasonable manner in which it litigated the case.” Rudolph appealed.
The Federal Circuit affirmed the exceptionality finding, vacated the fee award, and remanded.
The “district court provided five independent bases supporting exceptionality.” Considering the “totality of the circumstances,” the district court did not abuse its discretion. The Federal Circuit vacated the fee award and remanded for a new determination. In awarding attorney fees, the district court abused its discretion by basing the amount on an erroneous interpretation of the stipulation.
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