Patent Litigators, Be Creative, But Not Too Creative: MarcTec, LLC’s $4.68 Million Lesson on the Boundaries of “Creative Lawyering”
Everyone knows the saying, “you should learn from your mistakes.” In this case, it is better (and cheaper) to learn from MarcTec’s $4.68 million mistake. On January 3, 2012, the Court of Appeals for the Federal Circuit affirmed a district court order finding MarcTec’s patent litigation case against Cordis Corporation “exceptional” under 35 U.S.C. § 285, and affirmed the district court’s award of $4.68 million against MarcTec for Cordis’s attorney and expert witness fees.
MarcTec brought suit against Cordis claiming that Cordis’ Cypher Stent infringed two of its patents directed towards medical implants bonded to a polymeric material, where the polymeric material can include therapeutic agents. The court found that MarcTec brought an objectively baseless infringement action in bad faith in addition to having engaged in litigation misconduct. As a consequence, the district court deemed the case “exceptional” and awarded Cordis attorney and expert witness fees. Specifically the court found that (1) MarcTec took a position in litigation that conflicts with a position they took when prosecuting the patent and was therefore estopped through prosecution history estoppel; and (2) MarcTec mischaracterized the claim construction adopted by the court and relied on expert testimony that did not meet the minimum requirements for scientific reliability or relevance. The Federal Circuit agreed that these facts support a finding of subjective bad faith and objective baselessness.
MarcTec’s arguments for a “plain meaning” and “claim differentiation” are typical in patent litigation cases, but the court found that its arguments supported a finding of subjective bad faith and objective baselessness in light MarcTec’s complete disregard of the specification and prosecution history. Moreover, the district court lambasted MarcTec’s reliance on the expert testimony and found that it was so misplaced as to support a finding of litigation misconduct.
Patent litigators and patentees should realize that creative lawyering can easily be construed by a district court as bad faith litigation and even litigation misconduct. In this case, the creative lawyering cost MarcTec $4.68 million.
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Dennis Chang is a Patent Attorney with Carr & Ferrell's Intellectual Property Practice Group. Mr. Chang holds a B.S. in Biology and a Master's Degree in Biomedical Engineering from the University of Texas at Arlington and received his JD from Chicago-Kent College of Law.