Prevailing Party

  • Need Not Win Each Claim, Or Any Substantive Ruling, To Be Prevailing Party: Governed by Fed. Cir. law. Need not prevail on all claims. Luv N’ Care (Fed. Cir. 04/12/24) (DJ plaintiff prevailing party by winning on unclean hands barring enforcement of patents and trade dress against it, even though lost on other claims and defenses). Requires “(1) that the party ‘received at least some relief on the merits,’ and (2) ‘[t]hat relief must materially alter the legal relationship between the parties by modifying one party’s behavior in a way that ‘directly benefits’ the opposing party.’” SSL Serv. (Fed. Cir. 10/14/14) (patent owner who obtained damages on one patent but lost (non-infringement) on second patent was prevailing party). “A favorable judgment on the merits is not necessary for a defendant to be deemed a prevailing party for purposes of statutory fee-shifting.” Raniere (Fed. Cir. 04/18/18) (aff’g fees award; defendants prevailing party where action dismissed with prejudice for lack of standing; “The relevant inquiry post-CRST [U.S. 2016], then, is not limited to whether a defendant prevailed on the merits, but also considers whether the district court’s decision—‘a judicially sanctioned change in the legal relationship of the parties’—effects or rebuffs a plaintiff’s attempt to effect a ‘material alteration in the legal relationship between the parties.’”); B.E. Tech. (Fed. Cir. 10/09/19) (aff’g “prevailing party” finding in costs award where complaint dismissed for mootness after patent claims declared unpatentable in IPR (for which lawsuit was stayed) FWD and appeal because judgment “placed a judicial imprimatur upon” rebuffing the plaintiff’s claim); Dragon (Fed. Cir. 04/21/20) (vacating judgment that defendants were not prevailing parties where action had been stayed pending defendants’ IPR petition and district court vacated non-infringement judgment as moot after Fed. Cir. affirmed PTAB invalidity determination and dismissed appeal from district court as moot; defendants “successfully rebuffed” plaintiff’s “attempt to alter the parties’ legal relationship in an infringement suit”); Pragmatus (Fed. Cir. 07/31/15) (non-precedential) (need not have won any substantive decision; defendant is prevailing party where case dismissed with prejudice in view of post-complaint licenses to defendant’s vendors, and dismissal interpreted as a covenant not to sue for any activities prior to the motion to dismiss). 
  • No Prevailing Party If Action Resolved By Settlement Not Incorporated In Judicial Decree: Party “cannot be a prevailing party if the case was resolved by settlement (not incorporated by judicial decree) prior to any relief on the merits.” Exigent (Fed. Cir. 03/22/06). But see   United Cannabis (Fed. Cir. 05/08/23) (alleged infringer is prevailing party if case dismissed with prejudice by stipulation despite no rulings on the merits; without mentioning Exigent); En Banc Petition in Diem (Fed. Cir. 02/20/20) (arguing that Exigent is contrary to S. Ct. precedents). Cf.  Keith (Fed. Cir. 04/07/20) (stipulated dismissal with prejudice may constitute “judgment” for purposes of Fed. R. Civ. P. 54(d) motion for attorney fees); Mossberg (Fed. Cir. 04/13/20) (aff’g denial of fees award for lack of prevailing party where action voluntarily dismissed without prejudice, before any Answer filed, after claims cancelled in PTAB proceeding; grant of stay pending successful reexamination proceedings at the PTAB was not the judicial imprimatur required for prevailing party status).

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