Trend is patent litigation loser pays fees or costs - but not this time (courtesy Google Images)
Trend is patent litigation loser pays fees or costs – but not this time (courtesy Google Images)

The significant filing fees spent by an accused infringer on a successful American Invents Act (AIA) review are not taxable as costs in the underlying district court patent litigation, according to the January 5, 2016 decision [pdf] in Credit Acceptance Corp v. Westlake Services.

In Credit Acceptance, the district court refused to tax as costs the $73,200 in filing fees paid by the accused infringer and prevailing party Westlake to the U.S. Patent and Trademark Office in successfully challenging Credit Acceptance’s patent in an AIA review.  Although the ruling goes against the general shift of both the Courts and Congress to increasing the financial risks of bringing unsuccessful patent litigation (this in service of the underlying policy of reducing the number of frivolous patent litigations), it appears to have been correctly decided.

Credit Acceptance tracks what has become a fairly typical fact pattern.  The owner of a patent claiming a business method or a software innovation brings suit for patent infringement in federal court.  In response, the accused infringer seeks AIA review by the Patent Trial and Appeal Board (PTAB) of the validity or patentability of the claimed invention.  The court stays the litigation pending administrative review.  The PTAB sustains the challenge, compelling the party asserting patent infringement to voluntarily dismiss the lawsuit with prejudice.  As observed in Credit Acceptance, there is strong case precedent for finding that under these circumstances the accused infringer is the prevailing party. Continue Reading Loser Does Not Pay for AIA Costs