University of Utah v. Max-Plank et al.

March 23, 2017

Federal Circuit No. 2016-1336

Author: James Gromada

In University of Utah v. Max-Planck et al., the Court of Appeals for the Federal Circuit ("CAFC") affirmed a district court finding that the case was not "exceptional" within the meaning of 35 U.S.C. §285, and therefore, attorney fees were not to be awarded to the prevailing party. 

The University of Utah ("UUtah") brought an action against Max-Planck for correction of inventorship of a portfolio of ten U.S. patents (known as the "Tuschl II patents") relating to the field of RNA interference.  Prior to the earliest filing of a patent application, Dr. Thomas Tuschl had published an article regarding various discoveries in the RNAi field, and a "mini-review" summarizing the state of RNAi research was published by Dr. Brenda Bass of UUtah.  Notably, the mini-review also included several of Dr. Bass's hypotheses.  Subsequently, ten patent applications were filed, and the Bass mini-review was cited as prior art during prosecution in all ten applications. 

During the discovery phase of the case, a deposition of Dr. Bass was taken, and during the deposition, Dr. Bass made several admissions that undermined the allegation that she had reduced the inventions to practice.  Then, UUtah withdrew its claim for sole inventorship, but retained its claim for joint inventorship, but the district court granted summary judgment to Max-Planck, thereby dismissing the joint inventorship claim. 

Max-Planck then moved for $8 million in attorney fees under §285, claiming that in light of Dr. Bass's testimony, UUtah lacked "any meaningful basis" for its lawsuit.  However, the district court denied the motion, citing Kimberly-Clark Corp. v. Proctor & Gamble, 973 F.2d 911 (Fed. Cir. 1992) in support of the proposition that "one inventor seeing a relevant report and building upon it might be an element of joint behavior supporting collaboration," and based on this principle, holding that UUtah's case was not "objectively unreasonable." 

On appeal, the CAFC held that district courts have broad discretion to make determinations regarding whether a case is "exceptional" on a case-by-case basis, considering the totality of the circumstances, and that there is "no precise rule or formula for making these determinations."  For this reason, the CAFC asserted that "[t]he trial judge was in the best position to understand and weigh these issues," and that no abuse of discretion was found.