from the United States District Court for the Eastern
District of Pennsylvania in No. 2:01-cv-02223-PBT, Judge
Petrese B. Tucker.
J. Palmersheim, Honigman Miller Schwartz and Cohn LLP,
Chicago, IL, argued for plaintiff-appellant. Also represented
by Anand C. Mathew; Dennis R. Suplee, Nancy Winkelman,
Schnader, Harrison, Segal & Lewis LLP, Philadelphia, PA.
Kelly Tillery, Pepper Hamilton LLP, Philadelphia, PA, argued
for all defendants-appellees. Defendant-appellee Sensormatic
Electronics Corporation also represented by Charles S.
Marion, Erik N. Videlock. Theodore A. Breiner, Breiner &
Breiner, Alexandria, VA, for defendants-appellees All-Tag
Security S.A., All-Tag Security Americas, Inc., Kobe
Properties SARL. Also represented by Tracy Zurzolo Quinn,
Reed Smith LLP, Philadelphia, PA.
Newman, Lourie, and Moore, Circuit Judges.
Newman, Circuit Judge.
the second attorney fee appeal arising from a patent
infringement suit brought by Checkpoint Systems, Inc.
("Checkpoint") against All-Tag Security S.A.,
All-Tag Security Americas, Inc., Sensormatic Electronics
Corp., and Kobe Properties SARL (collectively,
"All-Tag"). The district court deemed the case
"exceptional" and awarded attorney fees to
All-Tag. We conclude that the court erred in its
application of fee-shifting principles; the award is
Patent No. 4, 876, 555 ("the '555 patent")
relates to improved anti-theft tags that are attached to
merchandise, and deactivated when the goods are purchased.
The accused tags are manufactured in Europe, and imported
into the United States. Checkpoint brought an infringement
suit in the Eastern District of Pennsylvania. Trial was to a
jury, who found the '555 patent not infringed, invalid,
and unenforceable. Following the verdict, the district court
found the case to be "exceptional" under 35 U.S.C.
§ 285, and awarded the defendants approximately $6.6
million in attorney fees, costs, and interest. The district
court stated that the case was "exceptional"
because Checkpoint's expert witness based his
infringement opinion on examination of imported tags that
were manufactured by All-Tag in Switzerland, although the
accused tags were manufactured by All-Tag in Belgium.
Checkpoint Sys., Inc. v. All-Tag Sec. S.A., No.
01-CV-2223, 2011 WL 5237573, at *1 n.1 (E.D. Pa. Nov. 2,
2011) ("Dr. Zahn's factual assumptions were derived
from his review of All-Tag's patents, rather than its
actual accused products. . . . The evidence established that
Checkpoint never looked at the accused products in relation
to the '555 patent. This alone warrants an exceptional
case finding.") (internal citations omitted)).
appeal to us, Checkpoint pointed to evidence in the record
explaining that the tags from Belgium were manufactured on
the same machines that All-Tag transferred from Switzerland
to Belgium. There was no contrary evidence. We affirmed the
judgment entered on the jury verdict, but reversed the
attorney fee award, holding that "[t]he infringement
charge was not shown to have been made in bad faith or
objectively baseless." Checkpoint Sys., Inc. v.
All-Tag Security S.A., 711 F.3d 1341, 1348 (Fed. Cir.
sought certiorari, which was granted, with the opinion
vacated, and remanded to this court, Kobe Properties SARL
v. Checkpoint Sys., Inc., 134 S.Ct. 2134 (2014), in
conjunction with the Supreme Court's decisions on
fee-shifting in Octane Fitness, LLC v. ICON Health &
Fitness, Inc., 134 S.Ct. 1749 (2014), and Highmark
Inc. v. Allcare Health Management System, Inc., 134
S.Ct. 1744 (2014).
remand from the Supreme Court, we remanded to the district
court for further consideration of the attorney fee award in
light of the Court's decisions. Checkpoint Sys., Inc.
v. All-Tag Security S.A., 572 F.App'x 988 (Fed. Cir.
2014). In the remand order, we instructed the district court
to "consider the guidance from our prior opinion in
which we explained that tests or experiments on the actual
accused products are not always necessary to prove
infringement." Id. at 989.
district court again held the case to be exceptional, citing
the same ground, viz., that Checkpoint's
pre-suit investigation was inadequate because
Checkpoint's expert inspected tags produced in
Switzerland rather than in Belgium. Dist. Ct. Op. at *4. The
district court also found Checkpoint's pre-suit
investigation, based on an European infringement verdict
against All-Tag on a counterpart of the '555 patent and
two infringement opinions from counsel, to be inadequate
because the infringement opinions "were given years
before filing." Id. Finally, the district court
cited Checkpoint's "improper motivation" behind
the lawsuit, because Checkpoint brought suit "to
interfere improperly with Defendants' business and to
protect its own competitive advantage." Id. at
appeals, arguing that its expert proceeded reasonably in
light of the available information, for it was never disputed
that the tags tested by the expert were produced on the same
machines that were transferred to Belgium. Checkpoint states
that it had a reasonable, good faith basis for bringing this
infringement action, and that application of the ...