IP Law Daily, PATENT—Fed. Cir.: Denial of attorney fees to HID Global affirmed in G&D’s patent infringement lawsuit, (Jun 26, 2024)

By Saurabh Kashyap, B.A., LL.B., LL.M.

HID was not a prevailing party, as claims against it were dismissed without prejudice.

The U.S. Court of Appeals for the Federal Circuit affirmed a decision of the U.S. Court of Federal Claims declining a motion for attorney fees filed by HID Global Corporation in a patent infringement lawsuit filed by Giesecke & Devrient GmbH (G&D) against the United States in which HID had joined as an interested party. The court ruled that HID was not a “prevailing party” and was therefore ineligible for attorney fees under 35 U.S.C. § 285 (Giesecke & Devrient Gmbh v. U.S., No. 22-2002 (Fed. Cir. June 26, 2024)).

Background. The plaintiff/appellee, G&D, specializes in secure payment and identity solutions. The defendants included the United States, Gemalto Inc., and IDEMIA Identity & Security USA, LLC. HID Global Corporation, the nonparty-appellant, joined the case as an interested party due to its provision of identity cards to the United States government.

The dispute centered around U.S. Patent No. 7,837,119 (the ’119 patent), titled "Contactless Data Carrier." This patent, owned by G&D, pertains to contactless data carriers that include a microchip and an antenna designed to exchange data with a compatible reading device. Common examples of such data carriers include readable identification documents like passports and identity cards.

In November 2017, G&D filed this lawsuit against the United States, alleging infringement of the ’119 patent by using and manufacturing contactless data carriers, including products supplied by HID. After receiving notice of the lawsuit in April 2018, HID joined the case and filed a motion to dismiss with prejudice. G&D subsequently sought to amend its complaint to exclude claims against HID's products, which led the Court of Federal Claims to dismiss these claims without prejudice.

In January 2019, HID moved for attorney fees under 35 U.S.C. § 285 or, alternatively, under the court's inherent authority. The Court of Federal Claims, initially finding the case exceptional, granted HID's motion for attorney fees under 35 U.S.C. § 285. However, upon further review, the court concluded it lacked jurisdiction to grant such fees. HID appealed.

Prevailing party. The Federal Circuit examined whether HID could be considered a “prevailing party” under 35 U.S.C. § 285, which is necessary for awarding attorney fees. Citing the Supreme Court’s decision in CRST Van Expedited, Inc. v. E.E.O.C., 578 U.S. 419, 422 (2016), the court reiterated that prevailing party status requires a material alteration of the legal relationship between the parties. The Federal Circuit referenced its own precedent O.F. Mossberg & Sons, Inc. v. Timney Triggers, LLC, 955 F.3d 990, 992 (Fed. Cir. 2020) to illustrate that a dismissal without prejudice does not confer prevailing party status, as it does not constitute an adjudication on the merits or a judicially sanctioned change in the parties' legal relationship.

Moreover, the Federal Circuit underscored that the Court of Federal Claims’ dismissal without prejudice allowed G&D the option to reassert its claims against HID, which precludes HID from being considered a prevailing party. The court cited RFR Indus., Inc. v. Century Steps, Inc., 477 F.3d 1348, 1353 (Fed. Cir. 2007) to support its conclusion that dismissals without prejudice do not alter the legal relationship sufficiently to grant prevailing party status.

Ultimately, the Federal Circuit affirmed the Court of Federal Claims’ decision to deny attorney fees to HID. The court concluded that since HID was not a prevailing party, it was not entitled to attorney fees under § 285. Thus, the Federal Circuit did not separately address the Court of Federal Claims’ determination that this case was exceptional or whether the Court of Federal Claims has jurisdiction to grant attorney fees under § 285.

The Case is No. 22-2002.

Judge: Stoll, K.

Attorneys: John G. Flaim (Baker & McKenzie LLP) for Giesecke & Devrient GmbH. Lionel M. Lavenue (Finnegan, Henderson, Farabow, Garrett & Dunner, LLP) for HID Global Corporation.

Companies: Giesecke & Devrient GmbH; HID Global Corporation; Gemalto Inc.; IDEMIA Identity & Security USA, LLC

Cases: Patent FedCirNews