Last week, the U.S. Court of Appeals for the Federal Circuit issued an opinion in OneSubsea IP UK Limited, et al. v. FMC Technologies, Inc., No. 2022-1099 (May 23, 2023), affirming the district court’s denial of attorneys’ fees and costs under 35 U.S.C. § 285.
The OneSubsea Plaintiffs (“OSS”) field suit against FMC Technologies, Inc. (“FMC”) asserting infringement of ninety-five claims across ten patents relating to structures for subsea oil and gas recovery. Following issuance of the Markman Order, FMC moved for summary judgment of noninfringement based on the district court’s construction of the term “divert.” OSS opposed that motion and submitted an expert declaration in support of its argument that FMC’s accused structure diverts the fluid’s flow. In the meantime, several of FMC’s petitions for inter partes review were granted. The district judge stayed the case despite the pending summary judgment motion, stating “it is unclear from the current record whether FMC’s dispositive motion will be granted.” The PTAB ultimately invalidated seventy-six claims. FMC filed a renewed summary judgment motion, and OSS again opposed and submitted a different expert declaration. FMC moved to exclude that expert. The district court granted the motion to exclude and granted summary judgment. FMC sought fees and costs under 35 U.S.C. § 285. After briefing, the case was reassigned to a new judge who denied the § 285 motion. FMC appealed.
The Federal Circuit affirmed. First, the Court laid out the standard for an award of fees under Octane Fitness and explained that the denial of an award of fees is reviewed under an abuse of discretion standard. The Court rejected FMC’s argument that it should review the district court’s decision de novo because the successor judge who ruled on the fee motion had only “briefly ‘lived with the case.’” In doing so, it relied on a “substantial body of law” in which appellate courts have consistently reviewed successor judges’ decisions on discretionary issues for abuse of discretion and further found FMC’s cases inapposite. Next, the Court rejected FMC’s argument that the case was objectively baseless, noting that, following the Markman Order, the district court understood both parties’ contentions and originally concluded it was unclear whether FMC’s dispositive motion would be granted. Finally, the Court agreed with the district court that OSS’s reliance on inadmissible evidence did not render the case exceptional and rejected FMC’s other claims of litigation misconduct.