In Old Reliable Wholesale, Inc. v. Cornell Corp. decided March 16, 2011 (Fed. Cir. Appeal No. 2010-1247), the Federal Circuit reversed the lower court’s finding of an exceptional case based on a positive reexamination result.

Briefly, Old Reliable sued Cornell for patent infringement in 2006.  Cornell filed an ex parte reexamination of the Old Reliable patent in suit in 2008.  The Old Reliable patent was held invalid in March of 2009 on a motion for summary judgment of invalidity.  That decision was affirmed on appeal in December of 2009 by the Federal Circuit under Fed. Cir. R. 36.

Cornell moved for a finding of an exceptional case under 35 U.S.C. 285 and for an award of attorney fees.  The District Court agreed and awarded attorney fees in February, 2010. 

In June of 2010 the Patent Office issued a notice of intent to issue a reexamination certificate (NIRC) confirming all claims of the Old Reliable patent in reexamination.

The Federal Circuit reversed the exceptional case determination and vacated the award of attorney fees on March 16, 2011, stating several reasons and concluding with the following reason:

Finally, given that the PTO, after reviewing the relevant prior art, issued a notice of intent to issue an ex parte reexamination certificate confirming the patentability of all claims of the ’950 patent, we are unwilling to conclude that Old Reliable lacked a reasonable foundation for arguing that its patent was not anticipated.

Therefore, even though the litigation found the patent invalid, the reexamination results were used in part to determine that the patent owner had a reasonable foundation for arguing that its patent was not anticipated.  This was used by the Federal Circuit to vacate the award of attorney fees.