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Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 

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NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

INTEGRATED TECHNOLOGY CORPORATION, 

NEVADA INTEGRATED TECHNOLOGY 

CORPORATION,

Plaintiffs-Appellees

v.

RUDOLPH TECHNOLOGIES, INC., MARINER 

ACQUISITION COMPANY LLC,

Defendants-Appellants

______________________ 

2014-1820

______________________ 

Appeal from the United States District Court for the 

District of Arizona in No. 2:06-cv-02182-ROS, Senior 

Judge Roslyn O. Silver.

______________________ 

Decided: October 21, 2015

______________________ 

 JOSHUA MICHAEL RYLAND, Tucker Ellis LLP, Cleveland, OH, argued for plaintiffs-appellees. Also represented 

by JAY REED CAMPBELL; TODD ROBERTS TUCKER, Calfee, 

Halter & Griswold LLP. 

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 DANIEL W. MCDONALD, Merchant & Gould P.C., 

Minneapolis, MN, argued for defendants-appellants. Also 

represented by RACHEL C. HUGHEY, MICHAEL A. ERBELE.

______________________ 

Before PROST, Chief Judge, MOORE and WALLACH, Circuit 

Judges.

PROST, Chief Judge. 

On appeal for the second time, Rudolph Technologies, 

Inc. and Mariner Acquisition Company LLC (collectively 

“Rudolph”) challenge the district court’s determinations 

that this case is exceptional and that Rudolph is bound by 

an earlier stipulation regarding the amount of attorneys’ 

fees it owes. We affirm the district court’s exceptionality 

finding, but we hold that the district court erred in interpreting the stipulation to be binding in this circumstance. 

We therefore vacate the district court’s fee award and 

remand for the district court to calculate the amount of 

reasonable attorneys’ fees Integrated Technology Corporation and Nevada Integrated Technology Corporation 

(collectively “ITC”) incurred as a result of Rudolph’s 

misconduct.

I. BACKGROUND

Rudolph and ITC are the sole competitors in the market for inspection equipment for probe cards, which are 

testers for semiconductor chips. Probe cards test semiconductor chips by probing them with thousands of small 

wires. Those wires (called probes) can become bent, 

damaged, or misaligned. Rudolph’s technology tests the 

probes by taking images of the probes as they contact a 

“window” of the testing system.

A key limitation of U.S. Patent No. 6,118,894, the patent at issue in this appeal, is that the images of the probe 

tip are obtained “in a first state where said probe tip is 

driven in contact with said window with a first force, and 

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in a second state where said probe tip is driven in contact 

with said window with a second force . . . .” J.A. 183. 

Rudolph’s products—various PRVX models and the 

ProbeWoRx product—were designed not to contact the 

window in the first state. However, after ITC sued Rudolph, Ronald Seubert, who was the CEO at the time, 

tested the PRVX products and found that, due to manufacturing tolerances, the PRVX products sometimes did 

contact the window in the first state. Rudolph then 

slightly modified its software to account for manufacturing tolerances so that the PRVX products could not contact the window in the first state. Rudolph introduced the 

redesigned PRVX products on August 15, 2007, seven 

months after being sued, and four months after ITC’s 

initial infringement contentions. The next day, ITC took 

Mr. Seubert’s deposition, and Mr. Seubert disclosed the 

redesign. However, when ITC asked Mr. Seubert whether 

the probe tips contacted the window in Rudolph’s products, Mr. Seubert responded that he did not know. Mr. 

Seubert did not disclose the testing he performed or its 

results. Mr. Seubert left the company in December 2007.

The parties cross-moved for summary judgment in 

early 2009. ITC sought summary judgment of infringement on all products. As to the original products, Rudolph argued that the accused products did not practice a 

means-plus-function limitation. With respect to the 

redesigned products, Rudolph argued that the redesign 

caused the products to no longer literally infringe because 

they cannot contact the window in the first state. Rudolph’s motion for summary judgment of noninfringement 

also argued that the redesigned products do not infringe 

under the doctrine of equivalents based on prosecution 

history estoppel. The district court granted ITC’s summary judgment motion as to the original products, finding 

that Rudolph’s means-plus-function argument was not a 

“serious defense.” J.A. 17748. The district court denied 

both parties’ motions with respect to the redesigned 

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products, though the district judge did not resolve the 

prosecution history estoppel issue. Finally, the court 

granted Rudolph summary judgment of noninfringement 

as to a second asserted patent no longer at issue in this 

case.

Three main issues proceeded to trial: willfulness on 

the original products, and infringement and willfulness as 

to the redesigned products. The jury returned a verdict of 

infringement and willfulness on the redesigned products, 

but the jury found that Rudolph’s infringement before the 

redesign was not willful. Presumably, the jury must have 

credited ITC’s argument that the redesigned products 

infringed under the doctrine of equivalents and that the 

redesign was an intentional sham. ITC alleged copying to 

establish willfulness on the original products, which the 

jury apparently rejected.

One moment at trial is particularly relevant to the 

present appeal. At trial, Mr. Seubert disclosed for the 

first time upon questioning that he actually performed 

testing on his products when Rudolph was sued. Then, 

when Mr. Seubert was asked, “You determined that the 

machine actually was covered by the claims in the patent; 

right?” he responded “Yes.” J.A. 9480. Mr. Seubert also

confirmed that the testing occurred in April of 2007. J.A. 

9479. In its judgment as a matter of law order, the district court called this “a startling admission under oath” 

because Rudolph continued to contest infringement even 

though the CEO personally thought that Rudolph infringed. J.A. 17737.

The district court denied Rudolph’s motion for judgment as a matter of law. In so doing, the district court 

trebled damages, granted a broad injunction, and found 

the case exceptional under § 285. The district court’s 

analysis was brief: “Rudolph’s conduct during this litigation and the willfulness finding are ample support for 

finding this case exceptional.” J.A. 17751. Rudolph then 

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drafted a stipulation in which it agreed not to contest the 

reasonableness of ITC’s requested fee award of 

$3,252,228.50. The relevant text of the stipulation is as 

follows:

We are mindful, however, that disputing the reasonableness of your request will result in additional fees for both sides. Therefore, Rudolph will 

not contest the reasonableness of ITC’s request for 

fees in the amount of $3,252,228.50. This agreement solely relates to the reasonableness of the 

dollar amount and does not in any way limit Rudolph’s ability to contest or appeal ITC’s entitlement to attorneys’ fees on appeal or otherwise as 

may be appropriate, which right Rudolph specifically reserves.

J.A. 18396.1. The judge accepted the stipulation and 

awarded $3,252,228.50 in fees. The court then denied a 

motion to stay the injunction pending appeal (though this 

court ultimately granted the motion). Rudolph appealed.

On appeal, we found that prosecution history estoppel 

applied as a matter of law, so we reversed the infringement findings on the redesigned products. Integrated 

Tech. Corp. v. Rudolph Techs., Inc., 734 F.3d 1352, 1356–

60 (Fed. Cir. 2013). We therefore also vacated the willfulness finding, the trebled damages, and the injunction. 

Id. at 1360. Finally, this court remanded the attorneys’ 

fees issue to the district court because the exceptional 

case finding relied on the vacated willful infringement 

finding. Id. at 1360–61.

On remand, the district court reinstated its exceptional case determination. The substance of the order is 

below in full:

In brief, the record establishes the following: Rudolph hid its infringement for years, provided 

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ment papers even though it knew its product infringed, argued a never fully explained theory 

that ITC did not own the underlying patent, and 

during and after trial played semantic games regarding what its machines did and what functions 

were important to it and its customers. (Doc. 546 

at 20 n.9) (explaining Rudolph refused “to be 

forthright regarding how its machines operate” 

and the terms of injunction were an attempt to 

prevent “Rudolph from simply redefining certain 

terms in such a manner so it can claim its machines are outside literal coverage”). The striking 

weakness of Rudolph’s position regarding its pre2007 PRVX machines, as well as the unreasonable 

manner in which it litigated the case through trial 

and post-trial motions, satisfy the Supreme 

Court’s standard under § 285 for awarding fees. 

In fact, either the substantive strength of many of 

Rudolph’s litigating positions or the “unreasonable manner in which the case was litigated” make 

this case stand out from others. An award of fees 

is appropriate. The parties previously stipulated 

to the amount of fees. (Doc. 550-1 at 4).

J.A. 72. Rudolph appeals. This court has jurisdiction 

under 28 U.S.C. § 1295(a)(1).

II. DISCUSSION

Under 35 U.S.C. § 285, a “court in exceptional cases 

may award reasonable attorney fees to the prevailing 

party.” In Octane Fitness, the Supreme Court clarified 

that:

an “exceptional” case is simply one that stands out 

from others with respect to the substantive 

strength of a party’s litigating position (considering both the governing law and the facts of the 

case) or the unreasonable manner in which the 

case was litigated. District courts may determine 

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whether a case is “exceptional” in the case-by-case 

exercise of their discretion, considering the totality of the circumstances.

Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 

S. Ct. 1749, 1756 (2014) (footnote omitted). On appeal, we 

review the district court’s exceptional case determination 

under § 285 for an abuse of discretion. Highmark Inc. v. 

Allcare Health Mgmt. Sys., 134 S. Ct. 1744, 1747 (2014).

A. Waiver

As an initial matter, ITC asserts that Rudolph waived 

all of its challenges to the district court’s findings that 

Rudolph committed misconduct because, in the first 

appeal, Rudolph stated that the district court’s misconduct findings were “wholly irrelevant to the issues on 

appeal . . . .” Appellants’ Reply Br. ECF No. 59 at 22, 

Integrated Tech. Corp. v. Rudolph Techs., Inc., No. 12-

1593. According to ITC, because Rudolph did not appeal 

the misconduct findings in the first appeal, Rudolph 

cannot challenge them now.

We disagree. The district court’s opinion on remand 

is a new opinion with new factual findings. In the first 

appeal, we vacated the district court’s attorneys’ fees 

determination because it was inextricably intertwined 

with the district court’s vacated willfulness finding. 

Therefore, on remand, the district court had to consider 

anew whether the facts of the case supported an exceptionality determination under § 285. Accordingly, Rudolph was free to defend against ITC’s renewed 

misconduct allegations. As Rudolph disputed ITC’s 

misconduct allegations on remand, the arguments are 

preserved for this appeal.

B. Exceptionality

On the merits, we affirm the district court’s exceptionality determination. The district court provided five 

independent bases supporting exceptionality. Upon 

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review, we cannot say that the district court, considering 

the totality of the circumstances, abused its discretion in 

finding the case exceptional under § 285. See, e.g., J.A. 

7917 (p. 108, ll. 10–17), 9425 (illustrating Mr. Seubert’s 

inconsistent deposition and trial testimony).

C. Stipulation

Rudolph argues that, if we affirm the exceptionality 

finding, Rudolph should not be held to the stipulation it 

drafted prior to the first appeal regarding the amount of 

attorneys’ fees. We agree. We review contract interpretation de novo and the district court’s ultimate decision for 

abuse of discretion. Doe I v. Wal-Mart Stores, Inc., 572 

F.3d 677, 681 (9th Cir. 2009) (“Contract interpretation is 

a question of law that we review de novo.”); Bywaters v. 

United States, 670 F.3d 1221, 1228 (Fed. Cir. 2012) (“[I]n 

determining the amount of reasonable attorneys’ fees to 

award under federal fee-shifting statutes, the district 

court is afforded considerable discretion.”).

We interpret the stipulation’s text to be binding only 

when Rudolph is liable for fees for the entire case. The 

stipulation states that “Rudolph will not contest the 

reasonableness of ITC’s request for fees in the amount of 

$3,252,228.50.” J.A. 18396.1. This language assumes 

that the district court has already held Rudolph liable for 

fees encompassing the entire case—the stipulation relates 

only to “ITC’s request for fees.” Id. Even when a party is 

liable for fees covering the entire case, the losing party 

may still contest the reasonableness of the prevailing 

party’s fee request. The stipulation refers only to this 

issue: “the reasonableness of the dollar amount.” Id. 

Moreover, Rudolph explicitly reserves the right “to contest 

or appeal ITC’s entitlement to attorneys’ fees on appeal or 

otherwise as may be appropriate . . . .” Id. In other 

words, Rudolph remains able to contest the extent of its 

liability for fees. Therefore, as the scope of Rudolph’s 

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ness of ITC’s fees request—which is tied to a different 

amount of liability—is inapposite.

The context in which the stipulation was entered supports our textual interpretation. The district court had 

just resolved the judgment as a matter of law motions 

heavily in favor of ITC—the court upheld the jury’s infringement and willfulness verdict, it trebled damages, it 

held the case exceptional, and it entered a broad injunction. In that climate, Rudolph agreed not to contest the 

amount of ITC’s requested fees.

Now, however, the case’s posture has substantially 

changed. Indeed, ITC won only a fraction of its original 

claims. In this case, ITC asserted two patents against 

both Rudolph’s pre- and post-redesign products. It also 

accused Rudolph of willful infringement, and it sought 

treble damages and an injunction. After the initial district court proceedings had concluded, ITC won a complete 

victory on one of the two asserted patents. However, on 

appeal, we reversed the infringement finding as to the 

redesigned products, which vacated the willfulness finding, vacated the injunction, vacated the trebled damages, 

and vacated the exceptionality determination. After the 

appeal, ITC won only a portion of its original case—

simple infringement of one patent on only the preredesign products.

Furthermore, the district court provided no explanation in holding Rudolph to the stipulation. The court 

merely stated that “[t]he parties previously stipulated to 

the amount of fees,” without resolving Rudolph’s argument that the stipulation was no longer binding. J.A. 72. 

As the court provides no reasoning, it is difficult to defer 

to the district court’s view of the case.

Federal Circuit law requires that the amount of the 

fee award “bear some relation to the extent of the misconduct.” Special Devices, Inc. v. OEA, Inc., 269 F.3d 1340, 

1344 (Fed. Cir. 2001) (quoting Read Corp. v. Portec, Inc., 

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970 F.2d 816, 831 (Fed. Cir. 1992)). The district court 

based the amount of the attorneys’ fee award on an erroneous view of the stipulation, and consequently, the 

district court abused its discretion. On remand, the 

district court must award reasonable attorneys’ fees 

commensurate with Rudolph’s misconduct.

III. CONCLUSION

For the foregoing reasons, we affirm the district court 

finding that this is an exceptional case under § 285, 

vacate the district court’s fee award, and remand for a 

determination of the proper fee award.

AFFIRMED-IN-PART, VACATED-IN-PART, 

AND REMANDED

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