In an appeal from the United States Patent Trial and Appeal Board, the Federal Circuit addressed whether a party may challenge the validity of an issued patent by ex parte reexamination when the challenger has repeatedly tried to use inter partes review to forward the same argument. The Federal Circuit held that, when applying 35 U.S.C. § 325(d), the Patent Office cannot deny institution of IPR based on abusive filing practices and then grant a nearly identical reexamination request that is even more abusive.
SRI International, Inc., v. Cisco Systems, Inc., Appeal Nos. 2020-1685, et al (Fed. Cir. Sept. 28, 2021)
On appeal for the second time, the Court of Appeals for the Federal Circuit: (1) reinstated the jury’s finding that Cisco Systems, Inc. willfully infringed SRI International, Inc.’s patents; (2) reversed the district court’s JMOL of no willful infringement by Cisco; (3) reinstated the district court’s enhanced damages award against Cisco; and (4) affirmed the district court’s attorneys’ fees award to SRI.
When reinstating the jury’s finding that Cisco was willful, and then reversing the JMOL of no willful infringement by Cisco, the Federal Circuit relied on: (1) the jury’s unchallenged finding that Cisco induced infringement of SRI’s patents; and (2) there being substantial evidence that Cisco had no reasonable basis to believe it: (a) did not infringe; or (b) had a reasonable defense to infringement. When reinstating the award of enhanced damages (which had been wiped out by the now reversed JMOL), the Federal Circuit approved of the district court’s citation to the factors in Read Corp. v Portec, Inc., 970 F.2d 816, 826-27 (Fed. Cir. 1992). Under the Read Corp. factors, Cisco’s (i) overly aggressive and drawn-out litigation conduct, (ii) status as the world’s largest networking company, (iii) apparent disdain for SRI and its business model, and (iv) loss on all issues during summary judgement, despite formidable efforts to the contrary, all favored enhanced damages. Finally, in affirming the attorneys’ fees award to SRI, the Federal Circuit agreed with the district court that because “Cisco’s entire case was weak, yet it pursued the case aggressively and in an unreasonable manner anyway,” the case was “exceptional” as required for an attorneys’ fees award under 35 U.S.C. § 285.