Federal Circuit, October 2014, 2013-1056

On October 20, 2014, in AntiCancer, Inc. v. Pfizer Inc., the U.S. Court of Appeals for the Federal Circuit held that the district court abused its discretion by imposing a fee-shifting sanction on AntiCancer as a requirement to amend its contentions.

The Appeal was from the district court’s summary judgment of noninfringement entered on a procedural aspect arising from application of the Patent Local Rules of the Southern District of California. The district court found that AntiCancer’s Preliminary Infringement Contentions were deficient under Patent Local Rule 3.1, which sets forth requirements for providing detailed claim charts identifying where each claim element is found within the accused instrumentality. The court authorized AntiCancer to supplement its Contentions, but only on the condition that it paid the attorney fees and costs incurred by the defendants in connection with their motion for summary judgment. AntiCancer objected to the fees/costs condition and appealed the subsequent summary judgment ruling in Pfizer’s favor.

On Appeal, the Federal Circuit did not focus on whether the district court was correct in finding the contentions deficient but focused instead on whether the fee-shifting sanctions were an appropriate condition for allowing supplementation of the contentions. In its analysis, the Federal Circuit relied on Ninth Circuit precedent when determining that the fee shifting sanction would have only been proper if AntiCancer’s actions were in bad faith. The Federal Circuit concluded that “although the district court described the contentions as ‘woefully insufficient’ and ‘vague,’ there is no explicit finding of bad faith.”