A federal judge in Washington reversed a ruling and awarded legal costs to Steris (NYSE:STE) and Medtrica in their patent infringement spat with Cygnus Medical, after the U.S. Supreme court revised the rules around awards for lawsuits alleged to be frivolous.
Judge Robert Lasnik of the U.S. District court for Western Washington had ruled in April that Steris and Medtrica were not entitled to recoup legal costs after Lasnik found that their endoscope kits didn’t infringe a Cygnus patent. But the Supremes’ decision in Octane Fitness v. Icon Health & Fitness 2 weeks later lowered the bar for such awards, leaving them to district courts’ discretion.
"Although the extent of the parties’ efforts to negotiate early in the case is disputed, there is no evidence that Cygnus filed its counterclaims for infringement or continued to pursue litigation in bad faith or that it engaged in misconduct during the litigation. However, contrary to Cygnus’s argument, Octane Fitness makes clear that these findings are not required for an award of fees," Lasnik wrote. "Rather, employing the more flexible approach embraced by the Supreme court, the court finds that this case ‘stands out from others with respect to the substantive strength of [Cygnus’s] position.’ This is not to say that Cygnus’s decisions to file infringement counterclaims and pursue litigation were necessarily objectively baseless. As the court explained in its previous order, Cygnus’s proposed construction of the claims was not entirely frivolous under a clear and convincing standard.
"The court, however, finds that this case is uncommon based on the absence of evidence supporting Cygnus’s theories of infringement at summary judgment. Cygnus had a sample of the accused product and the opportunity to engage in discovery for more than 1 year before Medtrica and Steris filed their motion for summary judgment of non-infringement. Despite ample time to obtain evidence supporting its theories of infringement, the only evidence Cygnus submitted to support its claims were excerpts from websites purportedly explaining the effects of stress on different materials," the judge wrote.
Lasnik ordered Steris and Medtrica to file a motion for "reasonable attorney’s fees," including an itemized list of the fees and costs incurred in the patent infringement lawsuit brought by Cygnus, according to court documents.
