Case: 20-1106   Document: 24    Page: 1   Filed: 06/04/2020




   United States Court of Appeals
       for the Federal Circuit
                 ______________________

   AMNEAL PHARMACEUTICALS LLC, AMNEAL
    PHARMACEUTICALS OF NEW YORK, LLC,
                Appellants

                           v.

                   ALMIRALL, LLC,
                        Appellee
                 ______________________

                       2020-1106
                 ______________________

     Appeal from the United States Patent and Trademark
 Office, Patent Trial and Appeal Board in No. IPR2018-
 00608.
                  ______________________

                     ON MOTION
                 ______________________

    DENNIES VARUGHESE, Sterne Kessler Goldstein & Fox,
 PLLC, Washington, DC, for appellants. Also represented
 by   ADAM    LAROCK,      BYRON     LEROY     PICKARD.

    JAMES TRAINOR, IP Litigation, Fenwick & West LLP,
 New York, NY, for appellee.      Also represented by
 ELIZABETH B. HAGAN, Seattle, WA.
                 ______________________
Case: 20-1106     Document: 24    Page: 2    Filed: 06/04/2020




 2              AMNEAL PHARMACEUTICALS LLC   v. ALMIRALL, LLC



      Before LOURIE, DYK, and REYNA, Circuit Judges.
 DYK, Circuit Judge.
                         ORDER
      Amneal Pharmaceuticals LLC and Amneal Pharma-
 ceuticals of New York, LLC (collectively, “Amneal”) move
 to voluntarily dismiss this appeal from a final decision of
 the Patent Trial and Appeal Board in an inter partes re-
 view (“IPR”) pursuant to Federal Rule of Appellate Proce-
 dure 42(b). Almirall, LLC agrees that the appeal should be
 dismissed, but asks that the court award its reasonable at-
 torney fees and costs pursuant to 35 U.S.C. § 285 and Rules
 39 and 42. Specifically, Almirall is seeking attorney fees
 that were incurred for work on the IPR and in preparing
 its opposition to the present motion. For the following rea-
 sons, we deny that request.
                        BACKGROUND
      Almirall markets ACZONE® (dapsone) 7.5% topical
 gel, a prescription medication used to treat acne. The Food
 and Drug Administration (“FDA”) lists two patents owned
 by Almirall in the Orange Book as claiming ACZONE: U.S.
 Patent No. 9,161,926 (“the ’926 patent”) and U.S. Patent
 No. 9,517,219 (“the ’219 patent”).
      In advance of seeking regulatory approval to market a
 generic version of ACZONE, Amneal filed a petition for an
 IPR in February 2018 (which the Patent Office granted in
 August 2018) challenging claims of the ’926 patent, and
 filed a second petition concerning the ’219 patent (not the
 subject of this appeal) in October 2018. In February 2019,
 Amneal filed its Abbreviated New Drug Application with
 the FDA, submitting Paragraph IV certifications for the
 ’219 patent and the ’926 patent.
     Almirall subsequently sued Amneal in district court,
 alleging infringement of only the ’219 patent. Amneal filed
 a counterclaim seeking declaratory judgment that the ’926
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 AMNEAL PHARMACEUTICALS LLC     v. ALMIRALL, LLC              3



 patent is invalid and is not infringed. Shortly after that
 suit was filed, the parties engaged in settlement discus-
 sions between April 22 and 29, 2019. The parties have dif-
 fering accounts about what happened during those
 discussions, but there appears to be some agreement that
 Almirall offered to enter into a covenant-not-to-sue on the
 ’926 patent contingent on dismissal of this IPR.
      With the parties unable to reach a settlement, the un-
 derlying IPR on the ’926 patent proceeded to trial on
 June 5, 2019. On August 27, 2019, the Board issued its
 final written decision finding claims 1–6 of the ’926 patent
 not unpatentable. Amneal filed a timely appeal with this
 court on October 28, 2019. On March 30, 2020, Amneal
 filed this motion to voluntarily dismiss its appeal. Almirall
 argues that Amneal litigated this matter in an unreasona-
 ble manner by continuing to litigate the IPR after the cov-
 enant-not-to-sue was offered, and Almirall had asked the
 FDA to remove the patent from the Orange Book. Almirall
 “seeks only fees and costs incurred during the relatively
 marginal window of time from [April 29, 2019], the date
 settlement negotiations were terminated, to the date of
 trial in the underlying IPR, June 5, 2019,” Opp. at. 18,
 along with the fees and costs for filing the opposition to this
 motion.
                          DISCUSSION
     Generally, our legal system adheres to the “American
 Rule” under which “each party in a lawsuit ordinarily shall
 bear its own attorney’s fees.” Hensley v. Eckerhart, 461
 U.S. 424, 429 (1983). However, in certain categories of
 cases, Congress has carved out exceptions to the American
 Rule and allowed for recovery of reasonable attorney fees.
 See Pennsylvania v. Del. Valley Citizens’ Council for Clean
 Air, 478 U.S. 546, 561–62 (1986); Alyeska Pipeline Serv. Co.
 v. Wilderness Soc’y, 421 U.S. 240, 247 (1975).
     The provision asserted here, section 285 of the Patent
 Act, provides that “[t]he court in exceptional cases may
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 4              AMNEAL PHARMACEUTICALS LLC   v. ALMIRALL, LLC



 award reasonable attorney fees to the prevailing party.” It
 does not appear that we have yet had occasion to consider
 to what extent section 285 applies to IPR appeals. Almirall
 argues that the Federal Circuit is a “court” authorized by
 section 285 to award fees in exceptional cases and that we
 have authority to award fees that were incurred during the
 entirety of this matter, including for work at the Board be-
 fore Amneal’s appeal was filed. We disagree. Whether or
 not this court can award fees for work on appeal from a
 decision in an IPR, section 285 does not authorize this court
 to award fees for work that was done before the agency on
 appeal from an IPR.
     We have long recognized this court’s ability to award
 attorney fees under section 285 for work done in district
 court patent infringement actions. See Rohm & Haas Co.
 v. Crystal Chem. Co., 736 F.2d 688, 692 (Fed. Cir. 1984). In
 that specific context, we have explained that “a case should
 be viewed more as an ‘inclusive whole’ rather than as a
 piecemeal process when analyzing fee-shifting under
 § 285.” Therasense, Inc. v. Becton, Dickinson & Co., 745
 F.3d 513, 516–17 (Fed. Cir. 2014) (citation omitted).
     Appeals from the Board are a different matter. The
 Court of Customs and Patent Appeals, a predecessor court
 whose decisions are binding on us, see S. Corp. v. United
 States, 690 F.2d 1368, 1370 (Fed. Cir. 1982) (en banc),
 which notably heard appeals from the Patent Office but not
 from district courts, on several occasions refused to read
 section 285 as pertaining to such administrative proceed-
 ings. Relying on the placement of section 285 in Chap-
 ter 29, the court explained that “[s]ection 285, which
 appears in the chapter of Title 35 concerning infringement
 actions, is clearly inapplicable to this court.” Reddy v.
 Dann, 529 F.2d 1347, 1349 (C.C.P.A. 1976). Similarly, the
 court in Meitzner v. Mindick, 549 F.2d 775, 784 (C.C.P.A.
 1977) held that section 285 did not apply to “exceptional
 interference cases.” See also Bowmar Instr. Corp. v. Tex.
 Instr., Inc., No. F74-137, 1978 WL 21733, at *1 (N.D. Ind.
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 AMNEAL PHARMACEUTICALS LLC     v. ALMIRALL, LLC              5



 Aug. 1, 1978) (explaining that, under Reddy and Meitzner,
 section 285 does “not authorize it to award fees to a party
 prevailing in that court in an interference proceeding”).
      Moreover, even were we to accept that section 285 is
 not limited to district court proceedings, the plain meaning
 of section 285’s reference to “[t]he court” speaks only to
 awarding fees that were incurred during, in close relation
 to, or as a direct result of, judicial proceedings. See Blyew
 v. United States, 80 U.S. (13 Wall.) 581, 595 (1872) (“The
 words ‘case’ and ‘cause’ are constantly used as synonyms in
 statutes and judicial decisions, each meaning a proceeding
 in court, a suit, or action.”). This language is simply incon-
 sistent with Almirall’s position that we can award fees in-
 curred for work in Patent Office proceedings before this
 court has ever asserted its jurisdiction.
     That conclusion, though specific to section 285, accords
 with conclusions reached under other fee-shifting provi-
 sions containing similar language. See, e.g., Kahane v.
 UNUM Life Ins. Co. of Am., 563 F.3d 1210, 1215 (11th Cir.
 2009) (joining other circuits that have unanimously held
 that 29 U.S.C. § 1132(g)(1), which allows for fee awards in
 “any action under this subchapter,” does not authorize
 awards for work done in pre-litigation administrative pro-
 ceedings); see also W. Watersheds Project v. U.S. Dep’t of
 the Interior, 677 F.3d 922, 926–27 (9th Cir. 2012) (collect-
 ing similar cases under the Equal Access to Justice Act,
 which provides for fees “incurred by that party in any civil
 action,” 28 U.S.C. § 2412(d)); Levernier Constr., Inc. v.
 United States, 947 F.2d 497, 502 (Fed. Cir. 1991) (“The trial
 judge erred in Levernier I by ruling that even though the
 consultant fees were incurred at the administrative level
 (and thus not in a ‘civil action’), Levernier would be entitled
 to recover those fees.”).
     The cases upon which Almirall relies—Sullivan v.
 Hudson, 490 U.S. 877 (1989) and Therasense—are not to
 the contrary. It is true that in Sullivan, the Supreme Court
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 6              AMNEAL PHARMACEUTICALS LLC      v. ALMIRALL, LLC



 explained that fees could be awarded for administrative
 proceedings that are “intimately tied to the resolution of
 the judicial action and necessary to the attainment of the
 results Congress sought to promote by providing for fees,”
 490 U.S. at 888. But the “narrow class of qualifying admin-
 istrative proceedings” that Hudson was referring to were
 those “where ‘a suit has been brought in a court,’ and where
 ‘a formal complaint within the jurisdiction of a court of law’
 remains pending and depends for its resolution upon the
 outcome of the administrative proceedings.” Melkonyan v.
 Sullivan, 501 U.S. 89, 97 (1991) (quoting Hudson, 490 U.S.
 at 892). Similarly, in Therasense, while we explained that
 “case” under section 285 should be more viewed as an in-
 clusive whole, 745 F.3d at 516, we were clearly only refer-
 ring to district court and appellate court proceedings.
      Nor are we aware of any case that would support
 awarding fees incurred before the Board here. We note
 that PPG Indus., Inc. v. Celanese Polymer Specialties Co.,
 840 F.2d 1565, 1569 (Fed. Cir. 1988), which was not cited,
 is consistent with Hudson and our conclusion. In PPG, this
 court allowed for the award of fees where Patent Office
 “proceedings substituted for the district court litigation on
 all issues considered by the PTO and the Board.” Id. But
 it did so only with respect to fees incurred after the filing of
 a civil action, and the fees were awarded in that district
 court proceeding. The Patent Office proceedings were
 found by the district court to be intimately tied to the res-
 olution of that action. Those are clearly not the circum-
 stances here. *



     *   The court notes that the Board has its own means
 for regulating litigation misconduct. 37 C.F.R. § 42.12 al-
 lows the Board to impose sanctions including “attorney
 fees” against a party for misconduct including “[a]dvancing
 a misleading or frivolous argument or request for relief”
 and “actions that harass or cause unnecessary delay or an
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 AMNEAL PHARMACEUTICALS LLC    v. ALMIRALL, LLC              7



     For these reasons, we reject Almirall’s request for at-
 torney fees under section 285. Even if we could award fees
 in appeals from the Board in an IPR for work in the appel-
 late proceedings, Almirall is impermissibly seeking fees
 that were incurred for work at the Patent Office before this
 case was commenced. Although Almirall also requests fees
 incurred in preparing its opposition to Amneal’s motion, its
 contentions as to unreasonable behavior to support such an
 award have nothing to do with conduct before this court
 and entirely relate to work before the Patent Office. We
 therefore deny its request for fees. We also see no separate
 basis here to award its request for costs. We therefore
 grant the motion to dismiss on the terms proposed.
    Accordingly,
    IT IS ORDERED THAT:
     (1) The motion to dismiss is granted.
     (2) The request for fees and costs is denied.
     (3) Each side shall bear its own costs.


                                  FOR THE COURT

          June 4, 2020            /s/ Peter R. Marksteiner
             Date                 Peter R. Marksteiner
                                  Clerk of Court



 ISSUED AS A MANDATE: June 4, 2020




 unnecessary increase in the cost of the proceeding.”
 § 42.12(a)(2), (7); (b)(6).
