The United States Court of Appeals for the Federal Circuit has affirmed a decision granting an award of fees for attorneys and experts under 35 U.S.C. § 285.Fees were awarded as a result of the plaintiff urging the district court to ignore specification and prosecution history evidence during claim construction and attempting to introduce unreliable expert testimony.The panel agreed with the district court that the plaintiff had pursued unsupported legal positions that rendered the case exceptional.MarcTec LLC v. Johnson & Johnson, Case No. 10-1285 (Fed. Cir., Jan. 3, 2012) (O’Malley, J.),

MarcTec accused Johnson & Johnson and Cordis of infringing its patent directed to a drug-eluting, balloon-expandable blood vessel stent.During the prosecution of the asserted patent, the applicants amended the independent claims to disclose, inter alia, a surgical application as opposed to a vascular graft already known in the prior art.The examiner cited to distinguishing claim language in allowing the claimed subject matter over the prior art.In particular, while the prior art taught a graft with a “coating placed on wall surfaces,” the allowed claims recited “a heat bondable material which is bonded to an implant by application of heat.”

In an earlier appeal, after the district court granted summary judgment of non-infringement after construing the term “bonded,” and the Federal Circuit affirmed.In this part of the case, the district court addressed Cordis’ motion that the case be found to exceptional under § 285.Here, the district court concluded that MarcTec’s proposed claim construction was so lacking in evidentiary support that it lacked a good faith basis and that by continuing the litigation after the claim term “bonded” was construed, the case became exceptional.In addition to awarding attorneys’ fees for pursuing baseless claims, the district court also awarded expert fees.During claim construction, MarcTec’s expert had presented testimony in support of its position, but his testimony was excluded as unreliable under FRE 702 and Daubert.MarcTec appealed.

The Federal Circuit affirmed the district court award of attorneys’ fees and expert fees.Judge O’Malley discussed the evidence supporting MarcTecs’ subjective bad faith, objectively baseless claims and litigation misconduct.The conduct the panel found most egregious was MarcTec’s mischaracterization of the prosecution history.The plaintiff knew from reading the prosecution history that the accused stents did not use “heat bonding” as MarcTec limited the claims during prosecution.Even so, MarcTec argued during claim construction that the accused stents sprayed droplets at the speed of sound, resulting in “heat bonding” for fleeting periods of time.This position and others were squarely rejected as barred by prosecution history estoppel because MarcTec could not overcome the clear disclaimer in the prosecution history.

The Federal Circuit treated the award of attorneys’ fees and expert fees separately, explaining that it was appropriate for courts to explain the basis for each sanction.In this case, however, the award of expert fees in combination with the attorneys’ fees was appropriate because the defendants were forced to incur expert witness fees to rebut MarcTec’s unreliable expert testimony and the plaintiff’s vexatious conduct increased the cost of litigation beyond what was compensable under § 285.

The final award to the defendants amounted to $4.6 million, the Court noting that MarcTec failed to challenge the reasonableness of the fee award.

Practice Note:This decision underscores the importance of the effect of claim language amendments well in advance of bringing suit.As is often the case, separate counsel may be used to prosecute and later litigate a patent, but all distinguishing and disclaiming statements will be attributed to the litigant.