Federal Circuit IP
Dragon Intellectual Property LLC v. Dish Network LLC.
By: Aikaterina (Katina) Assimacopulous
Fed Cir. No. 22-1621 (May 20, 2024)
(Moore, Stoll, and Bencivengo)
Issues: Does § 285 extend recovery to IPR proceedings or liability to counsel?
Holding: No. § 285 entitles a petitioner neither to recover fees incurred in parallel IPR proceedings nor to hold counsel jointly and severally liable.
Background: Dragon sued DISH, SXM, and eight others for patent infringement.
- DISH filed for IPR, SXM joined, and the D. Ct. proceedings against them were stayed. The other defendants proceeded with claim construction in D. Ct. After the hearing, all parties stipulated to noninfringement, and the court entered judgment in favor of all defendants.
- The Board subsequently held the asserted claims unpatentable, and the D. Ct. consequently vacated its noninfringement judgment as moot.
- DISH and SXM moved for attorney’s fees under both 28 U.S.C. § 1927, requiring “any attorney” who “multiplies” proceedings to “personally” pay; and under 35 U.S.C. § 285, awarding a “prevailing party” fees in “exceptional” cases. Movants argued Dragon and its counsel litigated a frivolous suit and construed the claims contrary to explicit prosecution history.
- The D. Ct. denied fees under § 1927 because neither the quality of the suit nor the quality of the claim construction “multiplies” proceedings.
- The D. Ct. found the case “exceptional” under § 285 but denied recovery because the vacated judgment disqualified movants as “prevailing” parties. The Fed. Cir. reversed, holding a successful IPR petition constitutes “prevailing.” On remand, the D. Ct. granted litigation fees, but denied IPR-related fees and declined to hold Dragon’s counsel liable.
- DISH and SXM appealed.
Federal Circuit: Affirmed the D. Ct.’s fee determinations and its refusal to hold counsel personally liable.
- § 285 excludes IPR-related fee recovery because IPR proceedings are not “cases” under § 285.
- IPR proceedings are voluntary, parallel, and would require judges to evaluate conduct related to proceedings over which they did not preside.
- Here, the case was found “exceptional” due to Dragon’s baseless position in D. Ct., and petitioners were not compelled to participate in IPR proceedings.
- § 285 does not permit courts to hold counsel liable because, unlike § 1927, it is not explicitly allowed and there is no precedential basis to do so, “especially where, as here, exceptionality was based on Dragon’s substantive litigation position and not on counsel’s manner of litigating.”
- Thus, a third party may be joined, but not simply because “they were a party’s attorney.”
J. Bencivengo’s Dissent: IPR replaced, rather than “parallel[ed]” the D. Ct. proceedings and it would only have been “voluntary” if filed before the D. Ct. suit. Because the D. Ct. found the case “exceptional” from inception, it could have justifiably awarded fees despite not having presided over the IPR proceedings.
Takeaways:
- An attorney may be liable under § 1927, but not under § 285.
- Under § 285, IPR proceedings may be used to determine whether a party is “prevailing”, but not to find exceptionality or to recover fees.