In Munchkin, Inc. v. Luv N’ Care, Ltd., [2019-1454] (June 8 2020), the Federal Circuit vacated the award of attorneys fees under 35 U.S.C. § 285 and 15 U.S.C. § 1117(a) following Munchkin’s dismissal of its patent claims after losing an IPR and its subsequent voluntary dismissal of non-patent claims.

The Federal Circuit said it generally gives great deference to a district court’s exceptional-case determination, but a district court must nonetheless provide a concise but clear explanation of its reasons for the fee award. When the basis of an attorney’s fee motion rest on issues that had not been meaningfully considered by the district court, however, a fuller explanation of the court’s assessment of a litigant’s position may well be needed when a district court focuses on a freshly considered issue than one that has already been fully litigated.

The Federal Circuit said that none of these issues was fully adjudicated before the court on the merits, and given the limited arguments Luv N’ Care made in support of its fee motion, it held that the district court abused its discretion in granting the motion and reversed the exceptional-case determination.