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22 October 2015Patents

Federal Circuit questions attorneys’ fees finding in semiconductor case

The US Court of Appeals for the Federal Circuit has affirmed a US district court’s decision to award attorneys’ fees to semiconductor company Integrated Technology Corporation, but has questioned the amount.

Yesterday, October 21, the federal circuit upheld a ruling that the case was exceptional due to defendant Rudolph Technologies’s alleged misconduct during a trial over its alleged infringement of Integrated Technology’s US patent number 6,118,894.

The patent covers inspection equipment for probe cards used to test chips on semiconductor wafers.

Integrated Technology sued Rudolph in 2007 at the US District Court for the District of Arizona. Shortly afterwards, the defendant redesigned its semiconductor testers to avoid infringing certain claims of the ‘894 patent.

In 2011, Integrated Technology prevailed in persuading the district court that the infringement had been wilful and secured an injunction against both the original and redesigned products.

Also, during the trial, Rudolph’s chief executive had testified that he was aware the original products were infringing despite continuing to contest Integrated Technology’s infringement claim.

In its decision, the district court described this as a “startling admission under oath” and therefore deemed the case exceptional.

Integrated Technology was subsequently awarded a further $3.25 million in attorneys’ fees.

But, in 2013, after Rudolph appealed against the extra award, the federal circuit reversed the finding of wilful infringement and the injunction on the redesigned products meaning Integrated Technology’s victory was reduced to Rudolph’s original product being deemed to have infringed the ‘894 patent.

The federal circuit remanded the case back to the district court because it argued that the fee was based on the wilfulness finding.

In a judgment handed down last year, the district court reinstated the $3.25 million attorneys’ fees on top of a revised $7.7 million damages ruling.

Rudolph appealed against the judgement on the attorneys’ fees award and in yesterday’s decision the federal circuit agreed that the amount awarded was incorrect.

The court, unanimous in its opinion, said: “The district court’s opinion on remand is a new opinion with new factual findings ... After the appeal, Integrated Technology won only a portion of its original case—simple infringement of one patent on only the pre-redesign products.

“The district court based the amount of the attorneys’ fee award on an erroneous view of the stipulation, and consequently, the district court abused its discretion. On remand, the district court must award reasonable attorneys’ fees commensurate with Rudolph’s misconduct,” the court added.

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