The Federal Circuit has loosened the standard for recovering attorneys’ fees in patent infringement cases, making it easier for winning defendants to obtain their fees from plaintiffs.
The case is Kilopass Technology, Inc. v. Sidense Corp. (Fed. Cir. Dec. 26, 2013), 2013 U.S. App. LEXIS 25671. Kilopass and Sidense were competitors in the market for memory cells used in transistors. Kilopass obtained several patents on its technology. After reviewing a published patent application of Sidense for its memory cells, Kilopass embarked on an interesting course of conduct.
First, Kilopass engaged counsel to determine whether Sidense infringed Kilopass’ patents. Based on the product described in Sidense’s patent application, Kilopass’ counsel believed that there might be an infringement case, and sent Sidense a letter inviting Sidense to license Kilopass’ patents or explain why Sidense’s products did not infringe Kilopass’ patents. Sidense replied with a specific explanation of why its products did not infringe Kilopass’ patents. Sidense also offered to subject its products to a confidential infringement analysis by a third party expert to prove its position. Kilopass then obtained a diagram of Sidense’s product and provided it to Kilopass’ counsel. Counsel then concluded that Sidense had designed around Kilopass’ patents and that its products probably did not literally infringe the patents. In response, Kilopass retained a second counsel to analyze infringement. The second counsel made a preliminary finding that Sidense’s products probably did not literally infringe the patents, but might infringe under the doctrine of equivalents, and said that further investigation was needed to confirm this. Kilopass did not conduct further investigation with this counsel, but instead engaged a third counsel to analyze infringement. Then, based primarily on Kilopass’ own engineer’s findings, Kilopass concluded that Sidense infringed under the doctrine of equivalents.