S. Ct. 92, 98 L. Ed. 2d 53 (1987). Baxter's arguments to the contrary are wholly unpersuasive.
McGaw has also filed a motion for attorneys' fees pursuant to 35 U.S.C. § 285, which states: "the court in exceptional cases may award reasonable attorney fees to the prevailing party." Determining whether fees are warranted requires a two-step analysis. J.P. Stevens Co., Inc. v. Lex Tex Ltd., 822 F.2d 1047, 1050 (Fed.Cir. 1987). First, the prevailing party must show by clear and convincing evidence that the case is "exceptional." Id. If the court makes such a finding, it must them determine whether an award of fees is warranted. National Presto Industries, Inc. v. West Bend Co., 76 F.3d 1185, 1197 (Fed.Cir. 1996). Before awarding fees, the court must conclude that it would be a "gross injustice" not to do so J.P. Stevens Co., 822 F.2d at 1052 (citing legislative history).
McGaw's allegation that this case is exceptional under 35 U.S.C. § 285 has three bases: (1) Baxter committed inequitable conduct as to the three patents-in-suit; (2) Baxter's employees engaged in inequitable conduct during the litigation; and (3) Baxter's attorneys and experts engaged in misconduct during the litigation.
A finding of inequitable conduct does not automatically render a case exceptional. Reactive Metals and Alloys Corp. v. ESM, Inc., 769 F.2d 1578, 1582 (Fed.Cir. 1985). Such a finding, when combined with inappropriate trial conduct, may result in an exceptional case. A.B. Chance Co. v. RTE Corp., 854 F.2d 1307, 1312 (Fed.Cir. 1988). McGaw argues that the court's findings as to the implausibility of Baxter inventors' testimony, coupled with Baxter's attorneys' tactics during trial, make this case exceptional. It points to Baxter's assertion of a large number of claims during discovery, which were subsequently reduced at trial, as a dilatory tactic that substantially increased the cost of litigation. McGaw also asserts that Baxter intentionally used vexatious trial tactics, such as making inappropriate comments to the jury, mischaracterizing evidence and misstating the law.
The court finds that the instances McGaw cites do not support the finding that this is an exceptional case. Discretion in awarding fees permits the court to weigh tangible as well as intangible factors, including the closeness of the case. National Presto, 76 F.3d at 1197. Although the court found inequitable conduct for the failure to disclose the PF0084, the jury found all three patents valid. While the court found the inventors' trial testimony implausible when compared with the contemporaneous documentation of their research, it did not find that they willfully defrauded the court.
This case involved complex litigation that resulted in aggressive strategies by both parties, some of which this court admonished during trial. Nevertheless, the conduct of Baxter's counsel was not so egregious as to render the case exceptional. There is no evidence that Baxter's attorneys pursued frivolous theories or claims during discovery. Bayer Aktiengesellschaft v. Duphar International Research, 738 F.2d 1237, 1243 (Fed.Cir. 1984) Together, these considerations convince the court that this is not an exceptional case that warrants the award of attorneys' fees.
ORDERED: McGaw's motion to supplement the judgment is granted. The court concludes that plaintiffs Baxter International and Baxter Healthcare committed inequitable conduct in the prosecution of their patents by not disclosing the Borla PF0084, and therefore U.S. Patents 5,171,234, 5,158,554, and 5,167,648 are rendered unenforceable. McGaw's motion for attorneys' fees is denied.
George W. Lindberg
DATED MAR 19 1997