Plaintiff’s Refusal to Concede Invalidity Under 35 U.S.C. § 101 Does Not Justify Attorney Fee Award

The court denied defendants' motion for attorney fees under 35 U.S.C. § 285 after plaintiff voluntarily dismissed its action following the PTAB's invalidation of its patent during a CBM review because plaintiff's litigation positions were not exceptional. "Although Defendants attempt to characterize the [patent-in-suit] as facially unpatentable by viewing later-issued decisions by the PTAB in [the first CBM proceeding] in an ex ante light, it is far from clear that each of the claims of the [patent] fails to recite patent-eligible subject matter, either before or after Alice, Ultramercial, and other decisions cited by Defendants. . . . Defendants have provided little support for their suggestion that Plaintiff's refusal to 'back down' and not contest [defendants'] multiple requests to the PTAB warrants a finding of 'exceptionality.' Defendants' arguments, when taken to their logical conclusion, would appear to require that any plaintiff asserting a patent 'similar to' patents found unpatentable under Section 101 in a separate case voluntarily dismiss with prejudice their infringement claims — or perhaps even forfeit their patents altogether — or face the risk of an attorneys' fee award pursuant to Section 285. The contours of Section 101 have proven difficult to apply in practice both before and after Alice, and the Court declines the opportunity to read Section 285 so broadly as to impose such a harsh and unfeasible fee-shifting rule on patent owners."

Credit Acceptance Corporation v. Westlake Services, LLC et al, 2-13-cv-01523 (CACD November 2, 2015, Order) (Otero, J.)