Judge Hall today issued an R&R on attorneys fees in In Re Kerydin (Tavaborole) Topical Solution 5% Patent Litigation, MDL No. 19-md-2884-RGA (D. Del. June 23, 2021), an ANDA case.
There, the plaintiff filed suit on four patents even though the PTAB had previously found an earlier patent in the family invalid in an IPR, and even though IPRs were pending on each of the four patents-in-suit.
Filing suit triggered the 30-month stay of FDA approval. Shortly after the suit was filed, one of the defendants moved to stay; plaintiff did not oppose, and actually filed a cross-motion to stay its own action against the other defendants (who opposed).
The Court granted the stay, and the PTAB invalidated the patents-in-suit shortly thereafter (a decision later affirmed by the Federal Circuit). One defendant then sought fees.
In other words, it's not hard to imagine an argument that the plaintiff filed the case seeking to trigger the 30-month stay, and then agreed to stay the action. The defendant seeking fees seems to have suggested as much:
[Defendant] FlatWing also argues that [plaintiff] Anacor litigated this case in an unreasonable manner, but there is nothing in the record to support that. In reality, this case was barely litigated at all. . . . FlatWing’s real point seems to be that it was unreasonable for Anacor to file suit in the first place (which triggered a 30-month stay of FDA approval of FlatWing’s ANDA), but I reject that argument . . . .
The Court noted that the later patents included at least one important limitation beyond the that of the earlier patent, and that the examiner was aware of the relevant references. That was enough to show that plaintiff's litigation position did not warrant fees:
I disagree with FlatWing’s contention that this case stands out with respect to the substantive strength of Anacor’s litigating position. As an initial matter, . . . the PTO examiner was made aware of the [relevant] references and the then-pending petition for IPR of the ancestor ʼ621 patent (which made the case for why the [predecessor] ʼ621 claims were obvious in view of [the references]). The examiner allowed the claims of the patents-in-suit anyway, and once that happened, they acquired a presumption of validity.
What’s more, each of the patents-in-suit contained a claim with a limitation that the ʼ621 patent claims lacked. And Anacor reasonably focused its non-obviousness arguments before the PTAB on that limitation. The record . . . indicates that the parties submitted conflicting expert testimony, and the PTAB made factual findings—including crediting the testimony of FlatWing’s expert—in reaching its conclusion. . . . Of course, Anacor lost the IPR. But losing is not an unusual occurrence—someone loses in every case—and it certainly does not by itself entitle the winner to fees.
The case also mentions the interesting issue of whether § 285 fee awards can encompass IPR fees. The defendant sought $687k in fees, including $584k in IPR fees. But the Court did not need to reach that issue, as it held that the plaintiff's conduct was not exceptional under § 285.
Update: Coincidentally, a court in the Southern District of California addressed this issue this week, and held that CBM fees can be awarded under § 285. See Ameranth, Inc. v. Domino's Pizza, LLC, C.A. No. 12-733 (S.D. Cal. June 21, 2021) (order).
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