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August 7, 2012

Exceptional

Highmark popped a declaratory judgment (DJ) action against Allcare's managed health care patent 5,301,105. Allcare's lawyers ran afoul of the district court judge, who "found that Allcare engaged in litigation misconduct by asserting a frivolous position based on res judicata and collateral estoppel, shifting its claim construction position throughout the course of the proceedings before the district court, and making misrepresentations... in connection with a motion to transfer venue." The case was ruled exceptional. Allcare's attorneys were slapped with Rule 11 sanctions. On appeal, the case became more exceptional.

Highmark v. Allcare Health Management Systems (CAFC 2011-1219) precedential; Judges Newman, Mayer (dissent) and Dyk (author)

The appeals panel picked over particulars on this case, second-guessing the district court judge. In the finale, the majority disagreed only a bit, but enough to remand on a partial reversal. The remarkable part of this case is the continuing arrogant abuse of the law by the CAFC.

Judge Mayer in dissent:

The court errs when it says that no deference is owed to a district court's finding that the infringement claims asserted by a litigant at trial were objectively unreasonable. See Ante at 9 ("We review the [district] court's determination of objective reasonableness without deference since it is a question of law."). When reviewing an exceptional case determination under 35 U.S.C. ยง 285, reasonableness is a finding of fact which may be set aside only for clear error. See Eon-Net LP v. Flagstar Bancorp, 653 F.3d 1314, 1324 (Fed. Cir. 2011) ("When reviewing an exceptional case finding for clear error, we are mindful that the district court has lived with the case and the lawyers for an extended period. Having only the briefs and the cold record, and with counsel appearing before us for only a short period of time, we are not in the position to second-guess the trial court's judgment."). Applying this highly deferential standard of review, there is no basis for overturning the trial court's determination that the infringement counterclaims brought by Allcare Health Management Systems, Inc. ("Allcare") against Highmark, Inc. ("Highmark") were frivolous. I would affirm the district court's award of attorney fees and expenses in its entirety.

Once again, case law means next to nothing in this country's crap shoot called patent litigation.

Posted by Patent Hawk at August 7, 2012 8:31 PM | Case Law