In Dragon Intellectual Property v. Dish Network, [2019-1280, 2019-1284] (April 21, 2020), the Federal Circuit vacated and remanded the denial of attorney’s fees under § 285 because the district court erred in holding that Appellants are not prevailing parties.

Dragon Intellectual Property, LLC separately sued DISH, SXM and eight other defendants, alleging infringement of claims of U.S. Patent No. 5,930,444. DISH filed a petition seeking inter partes review of the ’444 patent, which the Board instituted and subsequently granted SXM’s request for joinder. The district court stayed proceedings as to DISH and SXM pending the resolution of the IPR, but proceeded with claim construction as to the other eight defendants.

Following claim construction in the district court, Dragon, DISH, SXM, and the other eight defendants stipulated to noninfringement, the district court entered judgment of noninfringement in favor of all defendants, including DISH and SXM, based on the district court’s claim construction order and the parties’ stipulation. DISH and SXM then moved for attorneys’ fees under 35 U.S.C. § 285 and 28 U.S.C. § 1927, but before the motions were resolved, Dragon appealed both the district court’s judgment of noninfringement and the Board’s final written decision that the claims were invalid. In a prior decision, the Federal Circuit affirmed the IPR, and dismissed the appeal of non-infringement as moot. On remand, Dragon moved to vacate the finding of non-infringement as moot, which the district court granted, while retaining jurisdiction over the motion for attorneys fees.

The district court agreed that DISH and SXM “achieve[d] a victory” over Dragon but held that neither DISH nor SXM is a prevailing party because they were not granted “actual relief on the merits.” The district court added that “success in a different forum is not a basis for attorneys’ fees” in the district court.

The Federal Circuit said that it has held that a defendant can be deemed a prevailing party even if the case is dismissed on procedural grounds rather than on the merits. Consistent with its decision in B.E. Technology, the Federal Circuit held that DISH and SXM are prevailing parties. Accordingly, it vacated and remanded the district court’s order denying Appellants’ motions for attorneys’ fees under 35 U.S.C. § 285.

The Federal Circuit declined appellants’ invitation to determine whether attorneys’ fees under 35 U.S.C. § 285 could include fees from the IPR. The Federal Circuit remarked “we see no basis in the Patent Act for awarding fees under § 285 for work incurred in inter partes review proceedings that the Appellants voluntarily undertook,” but remanded for the district court’s initial determination.