TAKEAWAY: Infringement suits initiated before the Supreme Court’s holding in Alice cannot avoid attorney fees for a meritless case after Alice.

In Inventor Holdings, LLC v. Bed Bath & Beyond, the Federal Circuit addressed the propriety of an attorney fees award for a lawsuit initiated pre-Alice and maintained by the patent owner post-Alice. The district court determined that Inventor Holdings was liable for Bed Bath & Beyond’s attorney fees because, following the Supreme Court’s decision in Alice, Inventor Holdings’ patent claims were meritless.

Inventor Holdings argued that the area of § 101 patent eligibility was an “evolving area of law” and uncertain after Alice. However, the Court upheld the district court’s ruling that this case was “exceptional” and that Inventor Holdings was liable for attorney fees from the time of the Supreme Court’s decision through the eventual dismissal of the lawsuit. In particular, the Court affirmed the decision that the case was exceptional because of the overall weakness of Inventor Holdings’ post-Alice patent-eligibility arguments, and even noted that the arguments were dubious under pre-Alice case law. Specifically, the claims of the patent were manifestly directed to the abstract idea of “local processing of payments for remotely purchased goods,” and the only components described in the specification for implementing the method claims were clearly conventional and did not supply an inventive concept. The Court emphasized that even though analyzing claims under the Supreme Court’s framework can be difficult at times, there is no uncertainty that the claims at issue are ineligible.

The Court’s decision stands as a reminder that, even though the law is evolving and may be difficult to interpret, a patent’s merits must be continuously reevaluated.