On May 1, 2019, the Federal Circuit issued its opinion (available here) in Thermolife v. GNC Corp. In an unusual fact pattern, the district court invalidated the plaintiffs’ patent and then imposed a Section 285 attorney-fee award (for $1.3 million) against the plaintiffs due to their unjustified infringement position. Infringement was not adjudicated on the merits nor even fully litigated in the case (given bifurcation). The Federal Circuit upheld the fee award, concluding that the district court did not abuse its discretion in ruling that the plaintiffs were unjustified in alleging infringement in the first place in view of their inadequate pre-filing investigation.
A couple of other interesting points in the case. First, the Federal Circuit found that the district court did not err in striking a late-filed attorney declaration discussing plaintiffs’ pre-suit investigation, as the court found that the plaintiffs could have presented the same information in their initial opposition to the attorney’s fees motions. The Federal Circuit found that the plaintiffs were on notice of the need to address the adequacy of their pre-filing investigation, so there was no justifiable basis for their failure to do so in a timely manner.
Second, the Federal Circuit suggested that there would’ve been nothing wrong with the district court refusing to consider a fee request premised on an issue that had not been litigated: “[W]e have emphasized the wide latitude district courts have to refuse to add to the burdens of litigation by opening up issues that have not been litigated but are asserted as bases for a fee award.” (emphasis in original).
Finally, the Federal Circuit noted that, although one consideration in the fee-award inquiry is whether the party seeking fees “provide[d] early, focused and supported notice of its belief that it was being subjected to exceptional litigation behavior”, such notice was not required before a fee-award could issue. In the instant case, the defendants did not raise the infringement issue during the 3.5 years the case was pending—instead, they raised it only after the close of the case. Although the lack of early notice can support a denial of attorney’s fees, and the presence of such notice followed by continued litigation can constitute a factor in justifying an award of attorney’s fees, such notice is not required.