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. 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 Cir. 07/31/15) (non-precedential) (need not have won any substantive decision; defendant is prevailing party where case dismissed with prejudice in view of post-complaint licenses to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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