Extremity Medical, LLC v. Nextremity Solutions, Inc.

Extremity Medical, LLC v. Nextremity Solutions, Inc. Under Dragon, § 285 does not allow recovery of attorney fees and costs incurred in a voluntarily undertaken parallel IPR, so the district court correctly denied Nextremity's $343,660.86 IPR fee request. The court also held that the district court did not abuse its discretion in finding the case exceptional and awarding $52,573 for the district court litigation. Affirmed on both the appeal and the cross-appeal. The decision reaffirms Dragon's bar on § 285 recovery of IPR fees for accused infringers who voluntarily file parallel IPRs. It also shows that asserting a patent without pre-suit investigation of known prior art and without a substantive validity defense can support an exceptional-case finding for district court fees. Affirmed. Extremity sued Nextremity on claim 59 of the '589 patent. Nextremity had twice sent pre-suit letters identifying Marcus and Chandran as prior art. The case was stayed on stipulation after the Board instituted Nextremity's IPR. The Board found claim 59 anticipated and the proposed substitute claim obvious, and Extremity did not appeal. The district court dismissed with prejudice and found the case exceptional under § 285. It awarded $52,573 for the district court litigation but denied $343,660.86 in IPR fees. Nextremity's appeal: Dragon applies because Nextremity voluntarily pursued the parallel IPR instead of arguing invalidity in court. Pre-suit prior art letters, Extremity's stipulation to the stay, and Extremity's motion to amend did not make the IPR involuntary. The court rejected Nextremity's arguments under Sullivan v. Hudson and Octane Fitness. Sullivan covers a narrow class of mandatory administrative proceedings on which a pending court action depends, and downstream effects of an IPR do not make it 'intimately tied' to the suit. The district court did consider the totality of the circumstances in the case before it. Extremity's cross-appeal: there was no burden shifting or improper adverse inference, and no abuse of discretion. The exceptional finding rested on no meaningful pre-suit investigation despite known prior art and on no substantive validity defense in the district court. Any error in relying on Extremity's failure to defend before the Board was harmless because the court did not rely on it. attorney fees / sanctions Hatch-Waxman / ANDA non-precedential