Lawyer: $8 million attorney's fees award in patent case should give plaintiffs caution

By April Bamburg | May 24, 2016

SAN FRANCISCO – Patent lawsuits in California may have gotten more complicated, thanks to a recent decision by the U.S. District Court for the Northern District of California, in which justices awarded nearly $8 million in attorney’s fees – including pre-suit costs. 

If nothing else, this decision, tied to a patent lawsuit, is one that gives both plaintiffs and defendants something to think about, Eric Caligiuri, attorney at Weintraub Tobin, told the Northern California Record.

“For defendants, it’s sort of another arrow in the quiver to knock down their opponent’s arguments, but it’s really more to consider for the plaintiffs,” Caligiuri said. “For plaintiffs, it might bring them pause. It might make you think about the risk that you’re taking.”

In civil cases, the general rule is that you don’t get attorney’s fees. There are exceptions, by statute or contract, but the standard that rates as exceptional is a difficult standard to meet, Caligiuri said. In a pair of 2014 decisions, (Highmark Inc. v. Allcare Health Management System Inc., and Octane Fitness LLC v. ICON Health and Fitness Inc.), the state Supreme Court “lowered the bar,”  he said, as far as what a plaintiff must show.

The decision in the case in question, Alzheimer’s Institute of America v. Eli Lilly & Co. et al., awarded Eli Lilly approximately $4,445,492 and Elan Pharmaceuticals approximately $3,435,130. The judgment included $245,780 in pre-suit fees, after another court’s finding that Alzheimer’s Institute of America’s 2010 lawsuit alleging patent infringement incorrectly identified the true owner of patents for Alzheimer’s detection.

In this case, the exceptional standard was met in a motion for attorney’s fees, said the justices of the District Court in the Eastern District of Pennsylvania, where a question had arisen regarding the true owner of the patent that Alzheimer’s Institute claimed Eli Lilly and Elan had infringed upon.

In August 2011, a Pennsylvania district court found that the Alzheimer’s Institute of America was not in fact the holder of those patents, and evidence at trial revealed a conspiracy between the Alzheimer’s Institute of America’s principal and other individuals to incorrectly identify the owner of the gene mutations.

After the Eastern District of Pennsylvania justices’ decision in 2011 regarding the exceptional standard and attorney’s fees, the District Court for Northern District of California noted that this case met the exceptional standard and reported that defendant Elan had engaged counsel during a pre-suit investigation after getting a letter from the Alzheimer’s Institute raising the question of licensing discussions. The court deemed those fees reasonable and recoverable.

 “It’s not extremely common to get pre-suit fees, but it does happen more often lately,” Caligiuri said.

Caligiuri said that he would tell individuals with a potential patent lawsuit to really think about it before filing the paperwork and taking someone to court.

“Really consider your case. Work with an attorney and make sure that you’re bringing a legitimate case,” Caligiuri said. “For defendants, I’d say to have a good attorney who knows the current and changing laws. Make sure they know what defenses are available.”

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