Federal Circuit Rules Section 285 Doesn't Cover Recovery of IPR Fees

A recent decision by the Federal Circuit has clarified that Section 285 of the Patent Act does not extend to the recovery of fees incurred during Inter Partes Review (IPR) proceedings. This ruling marks an important interpretation of patent law and has significant implications for litigants seeking fee recovery in patent disputes.  

Background of the Case

The case in question involved a dispute over the interpretation of Section 285 of the Patent Act, which allows courts to award attorney fees to prevailing parties in patent litigation. The plaintiff had prevailed in the district court but was unsuccessful in recovering fees incurred during IPR proceedings. The plaintiff appealed, arguing that Section 285 should encompass the recovery of IPR fees as well.  

Federal Circuit's Interpretation

The Federal Circuit examined the language and legislative history of Section 285 to determine the scope of fee recovery. In its decision, the court emphasized that the language of the statute specifically refers to fees "incurred in connection with" patent litigation. The court concluded that IPR proceedings, being administrative proceedings before the Patent Trial and Appeal Board (PTAB), are distinct from district court litigation and therefore fall outside the scope of Section 285.   The court further highlighted that IPR proceedings serve a different purpose than district court litigation and involve unique procedures and standards. While parties may incur substantial fees in IPR proceedings, the court reasoned that Congress did not intend for Section 285 to encompass fee recovery in administrative proceedings like IPRs.  

Impact on Patent Litigation

The Federal Circuit's ruling has significant implications for parties involved in patent disputes, particularly regarding the recovery of fees incurred during IPR proceedings. Litigants should be aware that while prevailing parties in district court litigation may still be eligible for fee recovery under Section 285, the same does not apply to fees incurred in IPR proceedings.   This decision may influence strategic considerations for parties involved in patent litigation, including decisions regarding the pursuit of IPRs as an alternative or complementary avenue to district court litigation. Parties should carefully assess the potential costs and benefits of pursuing IPRs in light of the limitations on fee recovery established by the Federal Circuit's interpretation of Section 285.