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Magistrate Judge Schneider recommends finding of exceptional case and award of fees.

Magistrate Judge Joel Schneider of the District of New Jersey, sitting by designation and referral, recently recommended that a defendant who was granted summary judgment of noninfringement based on a sublicense be awarded a “substantial sum” – more than $5,462,889 – in attorneys’ fees under 35 U.S.C. § 285.  Bayer CropScience AG v. Dow Agrosciences LLC, Civ. No. 12-246 (RMB/JS) (D. Del. Dec. 22, 2014).  Judge Schneider found that in light of the sublicense at issue, Bayer’s case was “exceptionally meritless and Bayer knew or should have known this before it filed its complaint.  In addition, as the litigation progressed and it became apparent that Bayer’s case was going nowhere, Bayer insisted on forging ahead while it unsuccessfully searched for a theory to defeat Dow’s license or contract defense.  The better and prudent course of action would have been to abandon the action.”  Id. at 9-10.  According to Judge Schneider, the weakness of Bayer’s claims was also demonstrated by the Federal Circuit’s summary affirmance, a procedure used “only when the appellant/petitioner has utterly failed to raise any issues in the appeal that require an opinion to be written in support of the court’s judgment of affirmance.”  Id. at 14 (quoting Fed. Cir. R. 36).  Finally, Judge Schneider noted that “[a]nother remarkable aspect of Bayer’s defeat is that much of Dow’s best evidence came from the deposition testimony of Bayer’s witnesses, not Dow’s witnesses. . . . If Bayer had conducted a modicum of due diligence before it filed its complaint it would have learned from these witnesses that its case was doomed.”  Id. at 14-15.

UPDATE:  Judge Renee Marie Bumb adopted the report and recommendation of Magistrate Judge Schneider in a March 13, 2015 opinion.  Judge Bumb found counsel’s billing rates to be reasonable, id. at 31 n.12, but reserved judgment on an appropriate amount of attorneys fees to be awarded due to the heavily redacted nature of the fee application.  The Court explained that a plaintiff “is entitled to appraise the reasonableness of the amount of fees requested by [defendant] including the nature and extent of the work done by [defense] counsel on various phases of the case, so that it may present to the court any legitimate challenges to [defendant’s] claim.”  Id. at 29.  While Judge Bumb found “that [plaintiff] could have done more before Judge Schneider in terms of articulating why it could not access the reasonableness of [defendant’s] fees, the Court will hold further oral argument on and reserve decision on this objection.  (Alternatively, [defendant] may wish to turn over revised redacted billing statements in the interim, which may obviate the need for oral argument.)”  Id. at 30-31.

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