In a recent Memorandum Order, Judge Richard G. Andrews addressed defendant’s motion for attorney fees under 35 U.S.C. § 285 and the Court’s inherent powers. Parallel Iron LLC v. NetApp Inc., C.A. No. 12-769-RGA (D. Del. Sept. 12, 2014). First, Judge Andrews denied defendant’s motion for attorney’s fees under § 285 because defendant failed to demonstrate it was the prevailing party. As Judge Andrews explained, that “there must be a dispute that was settled in favor of the party seeking to be declared the prevailing party that materially alters the legal relationship between the parties.” Id. at 8. Here, however, the Court did not make any findings “regarding any substantive issue in the case,” did not “construe any terms, resolve a contested motion to dismiss, or resolve any motions for summary judgment.” Id. at 7. Judge Andrews explained that unlike cases where there was no reason given for the motion to dismiss, here it was clear that “the Stipulation of Dismissal was required as a result of a third-party licensing agreement,” which “led to downstream licensures for the users, including [defendant].” Id. at 7-8. Judge Andrews thus reaffirmed the principle that “it cannot be the case that a party ‘can benefit from a bona fide license agreement, obtained after the litigation began, and claim to be the prevailing party, without a single substantial court decision that favors that party.’” Id.
Judge Andrews did, however, grant attorney fees under the Court’s inherent powers to do so. As Judge Andrews explained, plaintiff had accused defendant’s products “by reference to their implementation of the pNFS standard” in its complaint and three sets of Paragraph 4(a) disclosures. Id. at 10. Over thirteen months after filing its complaint, plaintiff essentially withdrew its intention of accusing products implementing the pNFS standard of infringement. Id. at 10-11. The Court ordered plaintiff “to submit all materials that it had gathered or created during its pre-suit investigation related to this issue.” Id. at 11. After conducting an in camera review of a subset of documents specified by plaintiff, the Court determined that plaintiff initiated the “suit without a good-faith belief that the accused instrumentalities implemented pNFS in an infringing manner,” and therefore awarded attorney fees. Id. Judge Andrews further ordered supplemental briefing “to address the amount of fees appropriate in this case.” Id. at 16.