The U.S. Court of Appeals for the Federal Circuit has clarified the rules on attorneys’ fees in patent litigation. In the case of Dragon Intellectual Property v. DISH Network, the court rejected DISH’s bid to recoup $3.3m in fees. The court held that accused patent infringers cannot recover fees incurred in a parallel inter partes review proceeding, nor can they hold the patent owner’s counsel jointly and severally liable for an award. This decision has implications for accused infringers considering inter partes review in the future. The court also emphasized that district courts are best positioned to determine whether a case is “exceptional” and eligible for attorneys’ fees. The ruling aligns with previous Supreme Court decisions defining an “exceptional” case as one that stands out in terms of substantive strength or unreasonable litigation conduct. Accused infringers can be declared the prevailing party without a substantive judgment on the merits, but the award of attorneys’ fees is at the discretion of the court. Going forward, accused infringers should carefully consider the economic sense of initiating a parallel inter partes review proceeding, as attorneys’ fees incurred in such proceedings are not recoverable under the patent law’s fee-shifting provision.
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