United States Court of Appeals 

for the Federal Circuit ______________________ 

KEITH RANIERE,

Plaintiff-Appellant

v.

MICROSOFT CORPORATION, AT&T CORP.,

Defendants-Appellees

______________________ 

2017-1400, 2017-1401

______________________ 

Appeals from the United States District Court for the 

Northern District of Texas in Nos. 3:15-cv-00540-M, 3:15-

cv-02298-M, Chief Judge Barbara M.G. Lynn.

______________________ 

Decided: April 18, 2018

______________________ 

ROBERT DALE CROCKETT, Crockett & Associates, Santa Clarita, CA, argued for plaintiff-appellant. Also represented by CHASE TAJIMA, LISA DEARDEN TREPANIER. 

 STEPHEN BLAKE KINNAIRD, Paul Hastings LLP, Washington, DC, argued for defendants-appellees. Defendantappellee AT&T Corp. also represented by IGOR VICTOR 

TIMOFEYEV; CHRISTOPHER WOOD KENNERLY, Palo Alto, 

CA.

 CONSTANTINE L. TRELA, JR., Sidley Austin LLP, Chicago, IL, for defendant-appellee Microsoft Corporation. 
2 RANIERE v. MICROSOFT CORPORATION

Also represented by RICHARD ALAN CEDEROTH, DOUGLAS 

LEWIS; JOSHUA JOHN FOUGERE, Washington, DC.

______________________ 

Before LOURIE, O’MALLEY, and WALLACH, Circuit Judges.

O’MALLEY, Circuit Judge. 

Keith Raniere (“Raniere”) appeals from the district 

court’s decisions awarding attorney fees and costs to 

Microsoft Corporation and AT&T Corporation (together, 

“Appellees”). Raniere v. Microsoft Corp., Nos. 15-0540 & 

15-2298, 2016 WL 4626584 (N.D. Tex. Sept. 2, 2016) (Fees 

Decision); Raniere v. Microsoft Corp., Nos. 15-0540 & 15-

2298, slip op. (N.D. Tex. Dec. 22, 2016) (J.A. 34–40). 

Because the district court did not err in finding that 

Appellees are prevailing parties under 35 U.S.C. § 285

(2012), and did not abuse its discretion in awarding 

attorney fees and costs under that provision, we affirm.

BACKGROUND

Raniere sued Appellees for patent infringement, asserting five patents against AT&T (U.S. Patent Nos. 

6,373,936, 6,819,752, 7,215,752 (“the ’5752 patent”), 

7,391,856, and 7,844,041 (“the ’041 patent”)) and two of 

these five patents against Microsoft (the ’5752 patent and 

the ’041 patent). Fees Decision, 2016 WL 4626584, at *1. 

In 1995, Raniere and the other named inventors of the 

patents at issue assigned all rights in these patents to 

Global Technologies, Inc. (“GTI”). Id. at *2. Raniere is 

not listed on GTI’s incorporation documents as an officer, 

director, or shareholder. GTI was administratively dissolved in May 1996. Id. 

In December 2014, Raniere executed a document on 

behalf of GTI, claiming to be its “sole owner,” that purportedly transferred the asserted patents from GTI to 

himself. Id. Raniere’s suits against Appellees identified 

himself as the owner of the patents at issue. 
RANIERE v. MICROSOFT CORPORATION 3

In 2015, Microsoft moved to dismiss Raniere’s suit for 

lack of standing, noting that the PTO’s records indicated 

that Raniere did not own the patents at issue. Raniere’s 

counsel represented to the district court that GTI’s ownership passed to Raniere in its entirety at some point, and 

that Raniere properly transferred ownership of the patents from GTI to himself. Id. The court ordered Raniere 

to produce documentation proving these representations. 

Id. Raniere produced various documents that, according 

to the district court, failed to indicate that Raniere had an 

ownership interest in GTI at any time or that Raniere had 

the right to assign the patents at issue from GTI to himself. Id. at *3. Given Raniere’s failure to produce evidence to support his standing, the district court permitted 

Appellees to conduct limited discovery into the standing 

issue and stayed the cases pending its resolution. Id. 

Appellees suspended discovery when the parties began negotiating terms of settlement, but Raniere refused 

to finalize the settlement. Id. AT&T then filed a motion 

for an order to show cause why the action should not be 

dismissed under Federal Rule of Civil Procedure 41(b) for 

lack of standing. Id. AT&T also noted that Raniere was 

seeking third-party discovery in violation of the district 

court’s discovery order. Id. Raniere informed the district 

court that he could produce evidence to establish his 

standing, but he required a subpoena to obtain evidence 

from Alan Rubens, a Washington state attorney. Id. The 

district court permitted this limited discovery request and 

ordered Rubens to produce all relevant documentation. 

Id. Rubens’s documents showed the GTI shareholders’ 

consent to a transfer of shares from Raniere’s exgirlfriend—who owned 75% of GTI’s shares—to Raniere. 

The documents Raniere proffered did not indicate that 

any such transfer was ever completed, however, and did 

not establish that Raniere owned the patents at issue. 

In light of these documents, Appellees filed a renewed 

motion to dismiss for lack of standing. Id. In response, 
4 RANIERE v. MICROSOFT CORPORATION

Raniere filed a motion seeking the court’s permission to 

submit additional evidence showing that he had sole 

ownership over GTI. Id. The district court granted-inpart and denied-in-part this motion, stating that Raniere 

had received “more than a fair opportunity to adduce 

evidence to establish his standing.” J.A. 2340.

The district court held a hearing on Appellees’ motion 

to dismiss. Fees Decision, 2016 WL 4626584, at *4. Raniere testified, over Appellees’ objection, that the other 

inventors had disavowed any interest in GTI and given 

their ownership interests to Raniere. Id. Raniere also 

testified that his ex-girlfriend held her shares in the 

corporation in trust for him, based on a side letter executed between these parties, but he did not have possession 

of that letter nor did he know where the letter could be. 

Id. The district court found that Raniere’s testimony 

surrounding the alleged transfer contradicted Raniere’s 

earlier representation that the shares had already been 

transferred to him and was “wholly incredible and untruthful.” Id. 

The district court concluded that Raniere was unlikely to be able to cure the standing defect, and dismissed 

the case with prejudice. Id.; J.A. 2362. The district court 

also stated that it dismissed with prejudice because it 

found that Raniere’s conduct demonstrated “a clear 

history of delay and contumacious conduct.” Fees Decision, 2016 WL 4626584, at *4. 

Raniere appealed the district court’s decision on 

standing. We summarily affirmed the district court’s 

dismissal with prejudice of Raniere’s action for lack of 

standing. Raniere v. Microsoft Corp., 673 F. App’x 1008 

(Fed. Cir. 2017). 

While the merits appeal was pending, Appellees filed 

a motion seeking attorney fees and costs pursuant to 

35 U.S.C. § 285. The district court concluded that, because it dismissed Raniere’s claims with prejudice, Appel-
RANIERE v. MICROSOFT CORPORATION 5

lees were prevailing parties for the purposes of § 285. 

Fees Decision, 2016 WL 4626584, at *4. Although Raniere 

disputed that dismissal for lack of standing with prejudice 

was sufficient to confer prevailing-party status on Appellees, the district court explained that “[a] dismissal with 

prejudice alters the relationship between the parties and 

is sufficient to confer prevailing party status for purposes 

of considering a claim for fees under section 285.” Id. The 

district court also concluded that dismissal with prejudice 

is an appropriate remedy where it is unlikely that the 

plaintiff will be able to cure the standing defect. On this 

point, the district court explained that it had given Raniere multiple opportunities to cure the identified standing 

defect, but “[n]one of the evidence produced or arguments 

advanced by [Raniere] in support of his alleged standing 

gave the Court any reason to believe that the problem 

could be cured.” Id. at 2. 

The district court next concluded that this case was 

exceptional because it stood out from other cases “with 

respect to the unreasonable manner in which it was 

litigated. [Raniere]’s conduct throughout this litigation, 

culminating in his untruthful testimony at the hearing on 

the motion to dismiss, demonstrates a pattern of obfuscation and bad faith.” Id. at *5. The district court noted 

that Raniere promised repeatedly that he could produce 

evidence that would cure the standing defect identified by 

Appellees and the district court. Id. But Raniere failed to 

satisfy these promises, according to the district court, as 

“[d]espite numerous representations, [Raniere] failed to 

produce any written document or other credible evidence 

that he had an interest in GTI that would allow him to 

transfer the patents to himself.” Id. Raniere’s conduct 

required Appellees “to expend significant resources to 

oppose [Raniere]’s arguments, which the Court now finds 

were made in bad faith to vexatiously multiply these 

proceedings and avoid early dismissal.” Id. The district 

court rejected Raniere’s attempts to recharacterize his 
6 RANIERE v. MICROSOFT CORPORATION

conduct as “zealous pursuit of his good faith claim of 

ownership,” noting its finding that Raniere “made false 

and misleading representations to Defendants and the 

Court that resulted in, among other things, prejudice to 

Defendants in the form of significant legal fees incurred 

in defending this action.” Id. The district court awarded 

fees and non-taxable costs for the period of time between 

the Federal Rule of Civil Procedure 16 conference and the 

district court’s order of dismissal. Id.

In the alternative, the district court sanctioned Raniere’s conduct under its inherent authority. Id. The 

district court reiterated that Raniere had “acted in bad 

faith and vexatiously multiplied these proceedings” by 

failing to seize on any of the multiple opportunities to 

correct the standing issue. Id. “From the inception of the 

litigation, [Raniere] engaged in a pattern of obfuscation, 

offering inconsistent theories and arguments and promising to produce evidence that never materialized.” Id. The 

district court noted that Raniere failed to voluntarily 

dismiss the case when confronted with the fatal standing 

defect, instead imposing expenses on both Appellees and 

the district court. Id. According to the district court, 

“[t]his deplorable conduct constitutes an abuse of the 

judicial process and warrants an imposition of sanctions 

under the Court’s inherent powers.” Id.

Although Raniere argued that his conduct was not 

sufficiently egregious to justify imposition of sanctions 

under the district court’s inherent powers, the district 

court rejected Raniere’s characterization of his actions, 

noting that it “requires full candor on all matters from the 

parties who come to it seeking relief. [Raniere]’s submission of a document that contained a knowingly false 

representation constitutes an abuse of the judicial process 

that warrants sanctions.” Id. The district court found 

“that an award of fees is the least severe sanction adequate to deter similar conduct by [Raniere] in the future 

and to preserve the integrity of the Court.” Id.
RANIERE v. MICROSOFT CORPORATION 7

In the order granting attorney fees, the district court 

directed Appellees to submit evidence of their reasonable 

fees and costs. Id. at *6. AT&T submitted evidence that 

it incurred $395,050.30 in attorney fees and $13,917.10 in 

costs, and Microsoft submitted evidence that it incurred 

$176,166.40 in attorney fees and $2,073.68 in costs. 

Raniere objected to these figures. 

The district court applied the lodestar method to determine the appropriate amount of attorney fees. The 

district court found that the hourly rates Appellees’ 

counsel charged were reasonable. Although Raniere 

argued that AT&T improperly redacted its invoices and 

included unintelligible time entries, thus justifying a 

lower fee award, the district court found that “[t]he allegedly objectionable time entries are not block billed, or so 

vague or unintelligible as to prevent meaningful review.” 

J.A. 30. The district court found Appellees were not 

entitled to fees spent on certain matters after the district 

court issued its stay order. And, the district court reduced 

the lodestar for both Appellees by twenty percent due to 

duplication of efforts between Microsoft and AT&T attorneys. In view of these determinations, the district court 

awarded $300,295.71 to AT&T and $143,719.26 to Microsoft in attorney fees and costs. J.A. 33. 

Raniere appeals the district court’s fee award. We 

have jurisdiction to review this appeal under 28 U.S.C. 

§ 1295(a). 

DISCUSSION

A district court “in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U.S.C. 

§ 285. An exceptional case, though rare,

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 
8 RANIERE v. MICROSOFT CORPORATION

manner in which the case was litigated. District 

courts may determine 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). As such, “the exceptional-case 

determination is to be reviewed only for abuse of discretion.” Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 

134 S. Ct. 1744, 1748 (2014). “An abuse of discretion 

occurs when a district court’s decision commits legal error 

or is based on a clearly erroneous assessment of the 

evidence.” Univ. of Utah v. Max-Planck-Gesellschaft Zur 

Foerderung der Wissenschaften e.V., 851 F.3d 1317, 1322 

(Fed. Cir. 2017). “A factual finding is clearly erroneous if, 

despite some supporting evidence, we are left with the 

definite and firm conviction that a mistake has been 

made.” Id. (quoting Insite Vision Inc. v. Sandoz, Inc., 783 

F.3d 853, 858 (Fed. Cir. 2015)). 

Raniere challenges the district court’s decision on four 

grounds. First, he contends that the district court erred 

in finding that Appellees are prevailing parties under

§ 285. Second, he argues that the district court abused its 

discretion in finding this case “exceptional.” Third, he 

asserts that the district court erred in sanctioning Raniere under its inherent authority, in the alternative to a 

fee award under § 285. Finally, he argues that the district court abused its discretion in determining the 

amount of the fee award. 

We conclude that Appellees are prevailing parties, 

and that the district court did not abuse its discretion in 

finding this case exceptional under § 285 or in its fee 

award. We, thus, need not reach the district court’s 

sanction under its inherent authority in the alternative. 
RANIERE v. MICROSOFT CORPORATION 9

A. Appellees Are Prevailing Parties

Raniere first disputes whether Appellees are prevailing parties under § 285. Raniere contends that dismissal 

with prejudice for lack of standing is not an adjudication 

on the merits, as he contends is required to find that a 

defendant is a “prevailing party” under our case law. 

Raniere also asserts that dismissal with prejudice, without adjudication of a patent infringement claim, should 

preclude finding that a defendant has prevailed in a 

litigation. We disagree with these statements, particularly in light of the Supreme Court’s recent decision in CRST 

Van Expedited, Inc. v. EEOC, which held that a favorable 

judgment on the merits is not necessary for a defendant to 

be deemed a prevailing party for purposes of statutory 

fee-shifting. 136 S. Ct. 1642, 1651 (2016). Even without 

CRST, we conclude that the district court’s dismissal with 

prejudice of Raniere’s case for lack of standing is tantamount to a judgment on the merits. Under either of these 

rationales, Appellees have in fact prevailed in this case.

The Supreme Court has addressed the issue of what 

constitutes a “prevailing party” on several occasions. In 

Buckhannon Board & Care Home, Inc. v. West Virginia 

Department of Health & Human Resources, 532 U.S. 598 

(2001), the Supreme Court rejected the “catalyst” theory 

for identifying a prevailing party, under which a plaintiff 

is a “prevailing party” in a lawsuit if it achieves the 

desired result by bringing about a voluntary change in the 

defendant’s behavior. There, the Court stated:

Our “[r]espect for ordinary language requires that 

a plaintiff receive at least some relief on the merits of his claim before he can be said to prevail.” 

. . . . 

A defendant’s voluntary change in conduct, although perhaps accomplishing what the plaintiff 

sought to achieve by the lawsuit, lacks the neces-
10 RANIERE v. MICROSOFT CORPORATION

sary judicial imprimatur on the change. Our 

precedents thus counsel against holding that the 

term “prevailing party” authorizes an award of attorney[] fees without a corresponding alteration in 

the legal relationship of the parties

. . . . 

We cannot agree that the term “prevailing party” 

authorizes federal courts to award attorney[] fees 

to a plaintiff who, by simply filing a nonfrivolous 

but nonetheless potentially meritless lawsuit (it 

will never be determined), has reached the 

“sought-after destination” without obtaining any 

judicial relief. 

Id. at 603–06 (emphasis in original) (quoting Hewitt v. 

Helms, 482 U.S. 755, 760 (1987)). 

We have interpreted Buckhannon and its application 

to jurisdictional dismissals in prior cases. We interpreted 

Buckhannon to require that, “[i]n determining whether a 

party is a prevailing party in patent litigation, we apply 

the general principle that ‘to be a prevailing party, one 

must receive at least some relief on the merits, which 

alters . . . the legal relationship of the parties.’” Inland 

Steel Co. v. LTV Steel Co., 364 F.3d 1318, 1320 (Fed. Cir. 

2004) (quoting Former Emps. of Motorola Ceramic Prods. 

v. United States, 336 F.3d 1360, 1364 (Fed. Cir. 2003)

(internal quotations omitted)). We clarified later that 

“‘relief on the merits’ at least required that the party 

obtain a court order materially changing the legal relationship of the parties.” Rice Servs., Ltd. v. United States, 

405 F.3d 1017, 1023 (Fed. Cir. 2005) (citing Buckhannon, 

532 U.S. at 604−05). 

Raniere argues that Appellees cannot be prevailing 

parties because Appellees did not prevail on the merits. 

In his view, Appellees only “won” a judgment that Raniere 

did not possess standing to bring his suit, which is merely 
RANIERE v. MICROSOFT CORPORATION 11

jurisdictional. And, he contends that we have previously 

made clear that a dismissal for lack of standing is generally to be without prejudice because it is not an adjudication on the merits. Univ. of Pittsburgh v. Varian Med. 

Sys., Inc., 569 F.3d 1328, 1332 (Fed. Cir. 2009). But as 

noted, the Supreme Court recently clarified Buckhannon’s 

rule in CRST, holding that “a defendant need not obtain a 

favorable judgment on the merits in order to be a ‘prevailing party.’” 136 S. Ct. at 1651. 

In CRST, the Court first summarized its prior precedent on the issue of prevailing parties, noting that the 

“touchstone of the prevailing party inquiry must be the 

material alteration of the legal relationship of the parties.” Id. at 1646 (quoting Tex. State Teachers Ass’n v. 

Garland Indep. Sch. Dist., 489 U.S. 782, 792–93 (1989)). 

Acknowledging Buckhannon’s requirement that the 

change in relationship between the parties “must be 

marked by ‘judicial imprimatur,’” the Court explained 

that, “when a plaintiff secures an ‘enforceable judgmen[t] 

on the merits’ or a ‘court-ordered consent decre[e],’ that 

plaintiff is the prevailing party because he has received a 

‘judicially sanctioned change in the legal relationship of 

the parties.’” Id. (alterations in original) (quoting Buckhannon, 532 U.S. at 604–05). 

The Court explained, though, that, before CRST, it 

had “not set forth in detail how courts should determine 

whether a defendant has prevailed.” Id. On this point, it 

concluded that “[c]ommon sense undermines the notion 

that a defendant cannot ‘prevail’ unless the relevant 

disposition is on the merits,” and that “[t]he defendant 

may prevail even if the court’s final judgment rejects the 

plaintiff’s claim for a nonmerits reason.” Id. at 1651. 

This is logical, explained the Court, because “[t]he defendant has . . . fulfilled its primary objective whenever 

the plaintiff’s challenge is rebuffed, irrespective of the 

precise reason for the court’s decision,” even if the defendant “might prefer a judgment vindicating its position 
12 RANIERE v. MICROSOFT CORPORATION

regarding the substantive merits of the plaintiff’s allegations.” Id. 

The Court further noted that, in the context of 

42 U.S.C. § 2000e-5(k), the fee-shifting provision of Title 

VII of the Civil Rights Act of 1964: 

[C]ongressional policy regarding the exercise of 

district court discretion in the ultimate decision 

whether to award fees does not distinguish between merits-based and non-merits-based judgments. . . . [O]ne purpose of the fee-shifting 

provision is to deter the bringing of lawsuits without foundation. . . . The Court, therefore, has interpreted the statute to allow prevailing 

defendants to recover whenever the plaintiff’s 

“claim was frivolous, unreasonable, or groundless.” It would make little sense if Congress’ policy of sparing defendants from the costs of 

frivolous litigation[] depended on the distinction 

between merits-based and non-merits-based frivolity. Congress must have intended that a defendant could recover fees expended in frivolous, 

unreasonable, or groundless litigation when the 

case is resolved in the defendant’s favor, whether 

on the merits or not.

Id. at 1652 (emphasis in original) (internal quotations and 

citations omitted). 

Although CRST considered the fee-shifting provision

of Title VII, the Court explained there that “Congress has 

included the term ‘prevailing party’ in various fee-shifting 

statutes, and it has been the Court’s approach to interpret 

the term in a consistent manner.” Id. at 1646 (citing 

Buckhannon, 532 U.S. at 602–03); see Buckhannon, 532 

U.S. at 602 (“Congress . . . has authorized the award of 

attorney[] fees to the ‘prevailing party’ in numerous 

statutes in addition to those at issue here.”); Hensley v. 

Eckerhart, 461 U.S. 424, 433 n.7 (1983) (holding that 
RANIERE v. MICROSOFT CORPORATION 13

interpretation of “prevailing party” in a case involving the

Civil Rights Attorney’s Fees Awards Act of 1976, 42 

U.S.C. § 1988, is “generally applicable in all cases in 

which Congress has authorized an award of fees to a 

‘prevailing party’”). 

Our sister circuits have interpreted CRST to mean 

that, if a defendant succeeds on a jurisdictional issue, it 

may be a prevailing party. The First Circuit recently 

examined a similar issue: whether a defendant that 

prevailed because plaintiffs failed to demonstrate their 

standing can be a “prevailing party” under 17 U.S.C. 

§ 505 (2012), the fee-shifting provision of the Copyright 

Act. See Small Justice LLC v. Xcentric Ventures LLC, 873 

F.3d 313 (1st Cir. 2017). The First Circuit concluded that, 

under CRST and its circuit law, the district court did not 

abuse its discretion in awarding fees when that court 

“resolved the parties’ copyright dispute on standing 

grounds without reaching the merits of ownership.” Id. at 

327–28 (internal quotation marks omitted). 

Similarly, the Ninth Circuit concluded that CRST

overruled its earlier holding in Branson v. Nott, 62 F.3d 

287 (9th Cir. 1995) that, when a defendant wins based on 

a dismissal for lack of subject matter jurisdiction, that 

defendant is not a prevailing party under 42 U.S.C. 

§ 1988. Amphastar Pharms. Inc. v. Aventis Pharma SA, 

856 F.3d 696, 710 (9th Cir. 2017). The district court in 

the Amphastar qui tam case applied Branson’s holding, 

but the Ninth Circuit panel concluded that, even though 

the defendant in the action did not win on the “merits,” it 

had spent significant time and resources fighting the 

lawsuit, and fees should be awarded to deter future 

frivolous filings. Id. In other words, “[c]ommon sense 

says that [the defendant] has won a significant victory
14 RANIERE v. MICROSOFT CORPORATION

and permanently changed the ‘legal relationship of the 

parties.’” Id. (quoting CRST, 136 S. Ct. at 1646).1

We reach the same conclusion our sister circuits have 

reached regarding CRST, which clarified the application 

of Buckhannon to defendants seeking prevailing-party 

status. The relevant inquiry post-CRST, then, is not

limited to whether a defendant prevailed on the merits, 

but also considers whether the district court’s decision—

“a judicially sanctioned change in the legal relationship of 

the parties”—effects or rebuffs a plaintiff’s attempt to 

effect a “material alteration in the legal relationship 

between the parties.” CRST, 136 S. Ct. at 1646, 1651. 

And the same policy rationales the CRST Court emphasized in support of its holding underscore § 285 actions: 

the statute deters filing of “exceptional” cases—those 

“that stand[] 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.” 

Octane Fitness, 134 S. Ct. at 1756. 

Raniere has not persuasively explained why we 

should make a distinction between § 285 and other statutory provisions that award attorney fees to “prevailing 

parties,” and we see no reason to make such a distinction 

in light of the Supreme Court’s clear command to construe 

the term “prevailing party” consistently across feeshifting regimes. We hold CRST applies to our analysis of 

1 Other circuits also have applied CRST to conclude 

that a defendant need not prevail on the merits to be a 

“prevailing party.” See LeFande v. Mische-Hoeges, 712 F. 

App’x 9, 11 (D.C. Cir. 2018); In re Nat. Gas Royalties Qui 

Tam Litig., 845 F.3d 1010, 1025–26 (10th Cir. 2017); 

United States v. Thirty-two thousand eight hundred 

twenty dollars & fifty-six cents ($32,820.56) in United 

States Currency, 838 F.3d 930, 936 (8th Cir. 2016). 

 
RANIERE v. MICROSOFT CORPORATION 15

prevailing-party status under § 285, and that defendants 

need not prevail on the merits to be classified as a “prevailing party.” To the extent inconsistent with this conclusion, our prior case law to the contrary—Inland Steel

and its progeny—is abrogated accordingly.

Even if the district court’s decision to dismiss with 

prejudice for lack of standing is not based on the substantive merits of a plaintiff’s case, CRST makes clear that a 

merits decision is not required. Appellees spent significant time and resources to prevail in this action, as reflected by their request for attorney fees and costs. And 

here, Appellees “won” through the court’s dismissal of 

Raniere’s case with prejudice—they prevented Raniere 

from achieving a material alteration of the relationship 

between them, based on a decision marked by “judicial 

imprimatur.” CRST, 136 S. Ct. at 1646. Appellees received all relief to which they were entitled. The district 

court’s findings entitle Appellees to a finding that they 

have prevailed in this litigation, such that an award of 

attorney fees would be appropriate.

Even without the benefit of CRST’s clarification of 

Buckhannon, moreover, we still would conclude that the 

district court did not err in finding that Appellees are 

prevailing parties. The district court’s dismissal with 

prejudice of Raniere’s infringement suit was tantamount 

to a decision on the merits, making it sufficient to establish Appellees as prevailing parties. 

Raniere objects to this conclusion, arguing that Varian makes clear that a dismissal for lack of standing is not 

an adjudication on the merits under Rule 41(b). But 

Varian examined whether dismissal with prejudice is 

appropriate when jurisdictional defects exist, and explained that “a dismissal for lack of standing should 

generally be without prejudice, particularly when the 

defect is curable.” 569 F.3d at 1332. Varian did not hold 

that a dismissal with prejudice is never appropriate in 
16 RANIERE v. MICROSOFT CORPORATION

such circumstances, however. Here, the district court 

found explicitly that the standing defect was unlikely to 

be curable, based on Raniere’s repeated failures to correct 

the defect. Fees Decision, 2016 WL 4626584, at *4. The 

district court also based its decision to dismiss the matter 

with prejudice on Raniere’s pattern of delay and “contumacious conduct.” Id. This case is, thus, materially 

distinguishable from Varian because the dismissal here 

was with prejudice.2 

As we noted in Highway Equipment Co. v. FECO, 

Ltd., a voluntary dismissal with prejudice under Federal 

2 To the extent Raniere’s objection to the district court’s 

prevailing party determination relies on a dispute with

the district court’s dismissal of his case with prejudice, 

Raniere cannot challenge that finding at this stage of the 

proceeding—we have already affirmed that finding in the 

appeal of the merits proceeding. Raniere, 673 F. App’x at 

1008. Even if we could review this determination, we 

have explained on numerous occasions that, where standing cannot be cured, a dismissal with prejudice is appropriate. See, e.g., Fieldturf, Inc. v. Sw. Recreational Indus., 

357 F.3d 1266, 1269 (Fed. Cir. 2004) (“Ordinarily, dismissal for lack of standing is without prejudice. On occasion, 

however, a dismissal with prejudice is appropriate, especially where it is plainly unlikely that the plaintiff will be 

able to cure the standing problem.” (internal citations, 

quotation marks, and alterations omitted)); Sicom Sys. 

Ltd. v. Agilent Techs. Inc., 427 F.3d 971, 980 (Fed. Cir.

2005) (affirming district court’s dismissal with prejudice 

because the suit “was Sicom’s second suit that was dismissed for lack of standing” and “Sicom already had a 

chance to cure the defect and failed”); Textile Prods., Inc. 

v. Mead Corp., 134 F.3d 1481, 1484–85 (Fed. Cir. 1998) 

(affirming district court’s dismissal with prejudice because the standing defect was unlikely to be cured).

 
RANIERE v. MICROSOFT CORPORATION 17

Rule of Civil Procedure 41(a)(2) “has the necessary judicial imprimatur to constitute a judicially sanctioned 

change in the legal relationship of the parties, such that 

the district court properly could entertain [the defendant’s] fee claim under 35 U.S.C. § 285.” 469 F.3d 1027, 

1035 (Fed. Cir. 2006). And in Power Mosfet Technologies, 

LLC v. Siemens AG, where the plaintiff voluntarily dismissed one defendant from the case with prejudice, we 

concluded that the district court erred in not finding that 

defendant to be a prevailing party as to Federal Rule of 

Civil Procedure 54 costs.3 378 F.3d 1396, 1416 (Fed. Cir. 

2004). There, we stated that “[t]he dismissal of a claim 

with prejudice, however, is a judgment on the merits 

under the law of the Federal Circuit.” Id. (citing Hallco 

Mfg. Co. v. Foster, 256 F.3d 1290, 1297 (Fed. Cir. 2001)). 

Raniere objects, but does not explain why this principle would not apply to dismissals under Rule 41(b). To 

the contrary, the Supreme Court has explained, in the 

context of discussing the differences between Rule 41(a) 

and Rule 41(b), that “an ‘adjudication upon the merits’ is 

the opposite of a ‘dismissal without prejudice.’” Semtek 

Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 505 

(2001) (emphasis added). Semtek cites to Wright & Miller 

for the propositions that “[b]oth parts of Rule 41 . . . use 

the phrase ‘without prejudice’ as a contrast to adjudication on the merits,” id. (citing 18 Wright, Miller, & 

Cooper, Federal Practice & Procedure § 4435, at 329 n.4

(1981)), and that “‘with prejudice’ is an acceptable form of 

shorthand for ‘an adjudication upon the merits,’” id.

(citing 9 Wright, Miller, & Cooper, Federal Practice & 

Procedure § 2373, at 396 n.4 (1981)). As Wright & Miller 

3 We have treated the prevailing party issue under 

Rule 54 and § 285 in a similar fashion. See Highway 

Equip. Co., 469 F.3d at 1035; see also Inland Steel, 364 

F.3d at 1319–20.

 
18 RANIERE v. MICROSOFT CORPORATION

explains with respect to awarding costs to the prevailing 

party, “dismissal of the action, whether on the merits or 

not, generally means [the] defendant is the prevailing 

party,” and “[a] party who is only partially successful also 

can be deemed a prevailing party.” 10 Wright, Miller & 

Kane, Federal Practice and Procedure § 2667 (3d ed. 

2002); cf. Schwarz v. Folloder, 767 F.2d 125, 129–30 (5th 

Cir. 1985) (“Dismissal of an action with prejudice is a 

complete adjudication of the issues presented by the 

pleadings and is a bar to a further action between the 

parties. An adjudication in favor of the defendants, by 

court or jury, can rise no higher than this.” (quoting 

Smoot v. Fox, 340 F.2d 301, 303 (6th Cir. 1964))). 

The district court’s dismissal with prejudice of Raniere’s action gave Appellees the full relief to which they 

were legally entitled. Thus, to the extent any relief on the 

merits remains a necessary predicate to prevailing-party 

status after CRST, the dismissal with prejudice here was

such a judgment. This suffices to make Appellees “prevailing parties.”

For these reasons, we conclude the district court did 

not err in finding Appellees are “prevailing parties” for 

the purposes of § 285. We affirm this determination 

accordingly.

B. The District Court Did Not Abuse Its Discretion

in Finding This Case “Exceptional” 

Raniere also contends that the district court abused 

its discretion in finding this case exceptional. We disagree, and affirm the district court’s well-reasoned determination on this issue. Many of Raniere’s objections to 

the district court’s exceptionality determination raise 

factual disputes with the underlying merits ruling, which 

we cannot review at this stage of the proceeding. The 

attorney fee award is separately appealable here, and 

thus collateral, because it cannot “alter the [merits] order 

or moot or revise decisions embodied in the [merits] 
RANIERE v. MICROSOFT CORPORATION 19

order.” Budinich v. Becton Dickinson & Co., 486 U.S. 196, 

199 (1988). 

The district court specifically found that Raniere’s behavior throughout the litigation employed “a pattern of 

obfuscation and bad faith,” and that this behavior caused 

Appellees to incur significant fees and costs to oppose 

Raniere’s positions. These positions, in the district court’s 

view, “were made in bad faith to vexatiously multiply 

these proceedings and avoid early dismissal”—in effect, to 

stall the termination of the proceedings. Fees Decision, 

2016 WL 4626584, at *5. “Because the district court lives 

with the case over a prolonged period of time, it is in a 

better position to determine whether a case is exceptional 

and it has discretion to evaluate the facts on a case-bycase basis.” SFA Sys., LLC v. Newegg Inc., 793 F.3d 1344, 

1351 (Fed. Cir. 2015) (internal quotations, alterations, 

and citations omitted). The district court properly examined the totality of the circumstances in this case and 

found the case to be exceptional. We see no reason to 

disturb the district court’s well-reasoned determination.

Raniere requests that, if we affirm the district court’s 

finding of exceptionality, we reduce the amount of the fee

and costs award. We conclude, however, that the district 

court’s discretionary determination of fees and costs is 

well-supported and reflects the court’s careful consideration of the relevant billing rates, invoices, and records. 

The district court explicitly found that various time 

entries to which Raniere objected were “not block billed, 

or so vague or unintelligible as to prevent meaningful 

review.” J.A. 30. The district court exercised its discretion in electing to not accept Appellees’ fee request in its 

entirety—it made modifications to the lodestar for duplication in effort between Microsoft and AT&T’s lawyers, 

and it also declined to allow Appellees to recover all 

requested fees and costs. J.A. 30–33. On this record, we 

decline to modify the district court’s discretionary award. 
20 RANIERE v. MICROSOFT CORPORATION

CONCLUSION

For the foregoing reasons, we affirm the district 

court’s award of attorney fees and costs under 35 U.S.C. 

§ 285.

AFFIRMED

COSTS

Costs to Appellees.