Last week, the U.S. Court of Appeals for the Federal Circuit issued an opinion in B.E. Technology, L.L.C. v. Facebook, Inc., No. 2018-2356 (Oct 9, 2019), affirming a district court’s determination that Facebook was the prevailing party and that costs should be taxed against B.E.
B.E. had filed suit against Facebook asserting that Facebook infringed certain claims of a B.E. patent. After approximately a year of litigation, Facebook and other companies against whom B.E. had asserted the patent filed multiple petitions for inter partes review (IPR) of the asserted patent claims. The district court stayed the case pending the Board’s review. The Board instituted review and held the claims unpatentable. The Federal Circuit affirmed that determination.
Back in the district court action, Facebook moved for judgment on the pleadings, and B.E. asserted the case should instead be dismissed as moot. The district court agreed with B.E., and issued an order dismissing B.E.’s patent claims as moot. The district court, however, held that despite the dismissal for mootness, Facebook was the prevailing party in the lawsuit because it had, through the successful IPRs, rebuffed B.E.’s “attempt to alter the parties’ legal relationship.” Costs were taxed against B.E, and B.E. appealed.
The Federal Circuit affirmed. The Court explained that its precedent concerning identification of the “prevailing party” requires consideration of “whether the district court’s decision ‘effects or rebuffs a plaintiff’s attempt to effect a material alteration in the legal relationship between the parties.’” Applying this standard, the Court held Facebook had obtained the outcome it sought through the mootness dismissal. The Court further held the fact “[t]hat the merits of the decision cancelling the claims occurred in the PTO rather than the district court does not change the fact that the district court dismissed the claims it had before it, albeit for mootness.” The Court explained that this dismissal placed the requisite “judicial imprimatur” on the claims for infringement to justify conferring prevailing party status on Facebook.