Arctic Cat Inc. v. Bombardier Recreational Products Inc.

Background

Arctic Cat brought a patent-infringement lawsuit against Bombardier Recreational Products, Inc. and BRP U.S. Inc., alleging that certain snowmobile engines infringed five patents concerning engine ignition-timing systems. The parties settled the disputes involving one patent. The court later held all asserted claims of another patent invalid as indefinite, meaning the patent terms were not sufficiently clear, and granted summary judgment of noninfringement on the asserted claims of the remaining three patents. Summary judgment is a ruling that no reasonable jury could find for the opposing party on the issue. Arctic Cat did not appeal those rulings.

The defendants sought approximately $2.9 million in attorney fees, expert-witness fees, and expenses under 35 U.S.C. § 285. That statute permits a court to award reasonable attorney fees to the prevailing party in an “exceptional” patent case. Under the standard applied by the court, a case is exceptional if it stands out because of the strength of a party’s legal position or because the case was litigated in an unreasonable manner.

Analysis

The court held that Arctic Cat’s positions were not exceptionally weak. Regarding the patent held indefinite, the court noted that the relevant terms were not inherently indefinite and that the earlier ruling followed a detailed review of the patent record and testimony. Regarding the three patents on which the defendants won summary judgment, the court agreed that Arctic Cat had not shown literal infringement. But the court found that Arctic Cat likely had a compelling infringement-by-equivalents theory and that the prosecution-history-estoppel issue that ultimately barred that theory was difficult and close. Prosecution-history estoppel is a rule that can prevent a patent owner from relying on an equivalent after the owner’s statements during the patent-approval process surrendered that subject matter.

The court also rejected the argument that Arctic Cat litigated unreasonably. It credited Arctic Cat’s former in-house counsel’s sworn statement that the company conducted a diligent pre-lawsuit investigation. The court found no evidentiary support for the claim that Arctic Cat filed the action as retaliation, and it found that pursuing a parallel investigation before the International Trade Commission was not unreasonable. The court also found that Arctic Cat abandoned that investigation for budget reasons rather than because of an adverse claim-construction ruling. The court concluded that asserting 109 claims from five patents, although possibly excessive, was not unreasonable because many claims rose or fell together.

Ruling

Considering the circumstances as a whole, the court found that the case was not exceptional under § 285. Chief Judge John R. Tunheim therefore denied the defendants’ Motion for Attorney Fees [Docket No. 438].