Timeframe of Willfull infringement a Factor when Considering Attorneys' Fee Award
The US Court of Appeals for the Federal Circuit modified its original decision in SRI International, Inc. v. Cisco Systems, Inc., vacating the district court’s award of attorneys’ fees because it was based on a now vacated willful infringement finding, and remanding for further consideration. SRI International, Inc. v. Cisco Systems, Inc., Case No. 17-2223 (Fed. Cir. modified July 12, 2019) (Stoll, J) (Lourie, J, dissenting).
In its original opinion issued in March 2019 a divided Federal Circuit panel affirmed a district court decision finding that a claimed method in SRI’s patent for monitoring and analyzing a computer network was directed to an improvement in computer capability, was not abstract and thus was patent eligible. The Court also found that the district court did not abuse its discretion in finding that this case was exceptional under § 285. Specifically, the district court awarded SRI the attorneys’ fees, concluding that fees were warranted because Cisco “maintain[ed] 19 invalidity theories until the eve of trial but only present[ed] two at trial,” and because the jury found that Cisco willfully infringed SRI’s patent before and after May 2012. After the original opinion issued, Cisco filed a petition for panel rehearing.
The Federal Circuit granted in part and denied in part the petition for rehearing, withdrawing the original opinion and replacing it with a modified opinion. In connection with willfulness, the Court found that the record was insufficient to establish that Cisco’s conduct prior to Mary 2012 rose to the level of wanton, malicious and bad-faith behavior required for willful infringement. The Court noted that Cisco only became aware of SRI’s patent in May 2012 when SRI sent its notice letter, and thus concluded that Cisco could not have willfully infringed before May 2012. Because the district court’s award of attorneys’ fees was based on the now vacated willfulness finding, the Court vacated the attorneys’ fees award and remanded the case for further consideration regarding willfulness.