Court Opinion

ID: 620114
Source: CourtListenerOpinion
Date Created: 2012-01-03 16:30:07+00
Date Added: 2024-06-11T17:50:50.969744
License: Public Domain

United States Court of Appeals
      for the Federal Circuit
               __________________________

                   MARCTEC, LLC,
                   Plaintiff-Appellant,
                            v.
       JOHNSON & JOHNSON AND CORDIS
              CORPORATION,
             Defendants-Appellees.
               __________________________

                       2010-1285
               __________________________

   Appeal from the United States District Court for the
Southern District of Illinois in Case No. 07-CV-825, Chief
Judge David R. Herndon.
               _________________________

                Decided: January 3, 2012
               _________________________

     WILLIAM L. MENTLIK, Lerner, David, Littenberg,
Krumholz & Mentlik, LLP, of Westfield, New Jersey,
argued for plaintiff-appellant. With him on the brief was
ROY H. WEPNER. Of counsel were ROBERT G. KRUPKA and
CHRISTOPHER R. LIRO, Kirkland & Ellis LLP, of Chicago,
Illinois.

    GREGORY L. DISKANT, Patterson Belknap Webb & Ty-
ler LLP, of New York, New York, argued for defendants-
MARCTEC   v. JOHNSON & JOHNSON                            2

appellees. With him on the brief were EUGENE M.
GELERNTER, IRENA ROYZMAN, and CHARLES D. HOFFMANN.
              __________________________

 Before NEWMAN, PROST, and O’MALLEY, Circuit Judges.
O’MALLEY, Circuit Judge.
    In this patent case, MarcTec, LLC (“MarcTec”) filed
suit in the Southern District of Illinois against Cordis
Corporation and Johnson & Johnson (collectively,
“Cordis”) 1 alleging infringement of U.S. Patent Nos.
7,128,753 (“the ’753 Patent”) and 7,217,290 (“the ’290
Patent”) (collectively, “the patents-in-suit”). After claim
construction, the district court granted Cordis’s motion for
summary judgment of noninfringement. MarcTec, LLC v.
Johnson & Johnson, 638 F. Supp. 2d 987 (S.D. Ill. 2009)
(“Noninfringement Order”). On appeal, this court af-
firmed the district court’s construction of the term
“bonded” in the patents-in-suit and its judgment of nonin-
fringement based on that construction. MarcTec, LLC v.
Johnson & Johnson, 394 Fed. Appx. 685 (Fed. Cir. 2010)
(“Prior Appeal”). On February 23, 2010, the district court
granted Cordis’s motion to: (1) declare this case excep-
tional under 35 U.S.C. § 285; and (2) award Cordis its
reasonable attorney and expert witness fees. Specifically,
the district court awarded Cordis attorney fees and ex-
penses in the amount of $3,873,865.01, and expert fees
and expenses of $809,788.02, for a total award of
$4,683,653.03. MarcTec, LLC v. Johnson & Johnson, No.
07cv825, 2010 U.S. Dist. LEXIS 15789 (S.D. Ill. Feb. 23,
2010) (“Exceptional Case Order”). MarcTec appeals only

   1    According to Appellees, Johnson & Johnson is the
parent company of Cordis Corporation and is not involved
in making or selling the accused product at issue. Consis-
tent with this representation, and for ease of reference,
we refer to Appellees as “Cordis.”
3                           MARCTEC   v. JOHNSON & JOHNSON

from the district court’s final judgment declaring this case
exceptional and awarding attorney and expert fees to
Cordis – it does not challenge the reasonableness of the
amount of fees awarded. Because the district court did
not err in finding this case exceptional under 35 U.S.C.
§ 285, and did not abuse its discretion in awarding expert
witness fees under its inherent authority, we affirm.
                       BACKGROUND
                 A. Factual Background
                 1. The Patents-in-Suit
    Dr. Peter Bonutti is an orthopedic surgeon and is a
named inventor on numerous patents, including the
patents-in-suit. The ’753 Patent, which is entitled “Surgi-
cal Devices Having a Polymeric Material with a Thera-
peutic Agent and Methods for Making Same,” issued on
October 31, 2006. The ’290 Patent, which issued on May
15, 2007, is entitled “Surgical Devices Containing a Heat
Bondable Material with a Therapeutic Agent.” The
patents-in-suit have been assigned to Dr. Bonutti’s re-
search company – MarcTec.
    As this court noted in the prior appeal, the patents-in-
suit have identical specifications and are “directed to a
surgical implant in which a polymeric material is bonded
by heat to an expandable implant, where the polymer
includes a therapeutic agent such as an antibiotic.” Prior
Appeal, 394 Fed. Appx. at 686. Importantly, both patents
provide for “heat bondable material” that is “bonded” to a
surgical device or implant.
                 a. The Claims at Issue
    MarcTec alleged that Cordis infringed at least Claims
1, 3, and 4 of the ’753 Patent. Claim 1, the only inde-
pendent claim of the ’753 Patent, recites:
MARCTEC   v. JOHNSON & JOHNSON                           4

   A surgical device for implantation in a body com-
   prising: an implant, at least a portion of which is
   expandable; and a polymeric material bonded to
   the implant, wherein the polymeric material is
   thermoplastic, includes a therapeutic agent, is
   non-flowable and non-adherent at room tempera-
   ture, and becomes flowable, tacky, and adherent
   upon the application of heat.
’753 Patent col.16 ll. 7-14 (emphases added).
    With respect to the ’290 Patent, MarcTec alleged that
Cordis infringed at least Claims 1-8, 10 and 14. Claim 1,
the only independent claim of the ’290 Patent, recites, in
pertinent part:
   An implant for implantation in a human body
   comprising: a tubular member having a channel
   and mechanically expandable upon activation of a
   delivery mechanism . . . and a first component
   bonded to at least a portion of the tubular member
   and formed of a heat bondable material that in-
   cludes a therapeutic agent selected from the group
   consisting of a tissue ingrowth promoter and an
   antibiotic, wherein the heat bondable material is
   non-flowable and non-adherent at room tempera-
   ture and becomes flowable, tacky, and adherent
   upon the application of heat.
’290 Patent col.16 ll.5-26 (emphases added). The parties’
dispute focused, in large part, on the emphasized limita-
tions and the proper construction of the term “bonded.”
The specifications explain that the terms “bondable” or
“bondable material” refer “to any material, suitable for
use in surgical applications, which can be softened and
made flowable by the application of heat, and which,
when softened, will become tacky and bond to other
5                            MARCTEC   v. JOHNSON & JOHNSON

materials and will flow to fill available space.” ’753 Patent
col.3 ll.52-57; ’290 Patent col.3 ll.48-53.
               b. The Prosecution History
    Dr. Bonutti, through his attorneys, filed the applica-
tions that led to the patents-in-suit in 2002 and 2003.
These applications claimed priority from Dr. Bonutti’s
1990 patent application, which was entitled “Surgical
Devices Assembled Using Heat Bondable Materials.”
Exceptional Case Order, 2010 U.S. Dist. LEXIS 15789, at
*5. During prosecution, the Patent and Trademark Office
(“PTO”) rejected Dr. Bonutti’s proposed claims as invalid
over U.S. Patent No. 5,102,417 (“the ’417 Patent”), which
issued to Dr. Julio Palmaz, “the inventor of the balloon-
expandable stent.” Id.
    In response to the examiner’s rejection, Dr. Bonutti
explained that the ’417 Patent teaches “an absorbable
polymer coating placed upon wall surfaces of tubular
shaped members.” Joint Appendix (“J.A.”) 929. In con-
trast, Dr. Bonutti’s claimed “implant includes a heat
bondable material which is bonded to an implant by the
application of heat.” Id. Based on the rejection, Dr.
Bonutti, through his attorneys, amended his patent
claims to highlight the fact that the material bonded to
the claimed implant “is non-flowable and non-adherent at
room temperature and becomes flowable, tacky, and
adherent upon the application of heat.” Exceptional Case
Order, 2010 U.S. Dist. LEXIS 15789, at *6.
    Dr. Bonutti also distinguished the ’417 Patent on
grounds that it discloses “an expandable intraluminal
vascular graft, or expandable prosthesis for a body pas-
sageway . . . . Applicants, on the other hand, disclose,
inter alia, an assembly for use in surgical applications in
humans.” J.A. 928. During claim construction, the
district court construed this distinction as a representa-
MARCTEC   v. JOHNSON & JOHNSON                           6

tion that Dr. Bonutti’s invention did not include “intralu-
minal grafts” (i.e., stents). Exceptional Case Order, 2010
U.S. Dist. LEXIS 15789, at *5.
                  2. The Cypher Stent
    Cordis develops, manufactures, and sells products
that are used to treat coronary artery disease, including
the accused Cypher stent. The Cypher stent is a balloon
expandable drug-eluting stent which utilizes technology
invented by Dr. Palmaz – “the same technology that Dr.
Bonutti disclaimed to obtain allowance.” Exceptional
Case Order, 2010 U.S. Dist. LEXIS 15789, at *7. At this
stage of the proceedings, it is undisputed that the Cy-
pher’s drug/polymer coating is sprayed onto the stent at
room temperature and bonds to it at room temperature –
not by the application of heat. Prior Appeal, 394 Fed.
Appx. at 686.
                  B. Procedural History
     On November 27, 2007, MarcTec filed suit against
Cordis alleging that the Cypher stent infringes the ’753
Patent and the ’290 Patent.       In response, Cordis:
(1) denied infringement; and (2) asserted counterclaims
seeking declaratory judgment that the patents-in-suit are
invalid and not infringed.
                 1. Claim Construction
    On February 19, 2009, the district court conducted a
Markman hearing. In its claim construction briefing and
at the hearing, MarcTec told the court that no construc-
tion of the disputed claim terms was needed because each
term had a plain and ordinary meaning. In fact, during
the Markman hearing, counsel for MarcTec instructed the
court that it should focus on the claim language and look
to the specification only if there is ambiguity in that
language.
7                            MARCTEC   v. JOHNSON & JOHNSON

     On March 31, 2009, the district court issued its claim
construction order. MarcTec, LLC v. Johnson & Johnson,
No. 07cv825, 2009 U.S. Dist. LEXIS 27011 (S.D. Ill. Mar.
31, 2009) (“Claim Construction Order”). Consistent with
our guidance in Phillips v. AWH Corp., 415 F.3d 1303,
1313-19 (Fed. Cir. 2005) (en banc), the district court
considered the language of the claims, the specification,
and statements made during the prosecution history in
reaching its conclusions regarding the proper construction
of the claims. The district court rejected MarcTec's at-
tempts to minimize the role of the specification, noting
that, in Phillips, we indicated that the specification "is the
single best guide to the meaning of a disputed term."
Claim Construction Order, 2009 U.S. Dist. LEXIS 27011,
at *9 (quoting Phillips, 415 F.3d at 1320-21). Based on
the specification and prosecution history, the court con-
strued the term “bonded” – which appears in both of the
patents-in-suit – to mean bonded by the application of
heat. Id. at *6-11. Specifically, the court found that:
(1) “[h]eat bonding is the only form of bonding taught by
the patent”; and (2) during prosecution, Dr. Bonutti
limited his claims to heat bonding to overcome the Palmaz
’417 Patent. Id. at *28-31. Next, the court construed the
terms “surgical device” (’753 Patent) and “implant” (’290
Patent) to exclude stents. Id. at *6 (“There is no descrip-
tion in the specification of any non-surgical devices, such
as stents.”). The court further found that Dr. Bonutti
“disclaimed stents during prosecution in order to obtain
allowance.” Id. at *13.
       2. Summary Judgment of Noninfringement
    Cordis moved for summary judgment of noninfringe-
ment on grounds that: (1) the patents-in-suit require heat
to bond a polymeric material to the implant, while the
drug/polymer coating on the Cypher stent adheres at
room temperature; and (2) it is undisputed that the
MARCTEC   v. JOHNSON & JOHNSON                            8

Cypher device is a stent, not a surgical device. Based on
these differences, Cordis argued that the Cypher stent
cannot infringe the asserted claims either literally or
under the doctrine of equivalents.
    In response, MarcTec argued that Cypher’s coating is,
in fact, bonded by heat. In support of this position, Marc-
Tec offered expert testimony that spraying the
drug/polymer coating onto the Cypher stent at nearly the
speed of sound would cause an increase in temperature
such that heat is involved in bonding the coating to the
stent. MarcTec also pointed to evidence that heat is used
in some of the manufacturing steps before the
drug/polymer coating is sprayed onto the Cypher stent.
With respect to the disclaimer of stents, MarcTec did not
dispute that Cypher is a stent, but instead argued that
nothing in the specification or the prosecution history
precluded coverage of stents and that the device described
in Dr. Palmaz's ’417 Patent involved an “expandable
intraluminal vascular graft,” not a stent.
    On June 15, 2009, the district court granted Cordis’s
motion for summary judgment of noninfringement with
respect to all asserted claims of the patents-in-suit. In
reaching this decision, the court relied on undisputed
evidence that Cypher’s drug/polymer coating is sprayed
onto the device at room temperature and bonds at room
temperature. Noninfringement Order, 638 F. Supp. 2d at
1001 (“Undisputed evidence establishes that the polymers
in Cypher’s drug-eluting coating adhere to the stent at
room temperature.”). Because the court construed the
asserted claims to require bonding by the application of
heat, it concluded that the patents-in-suit do not cover the
Cypher stent. Id. at 1002.
   With respect to MarcTec’s proffered expert testi-
   mony, the court found that:
9                           MARCTEC   v. JOHNSON & JOHNSON

    Dr. Sojka’s theory that spraying droplets at an
    unrealistic speed, approaching the speed of sound
    (and unrelated to anything that happens in the
    Cypher coating process) would increase the tem-
    perature of the droplets – in ways that cannot be
    measured – for 5 millionths of a second (0.000005
    seconds) is an untested and untestable theory that
    is neither reliable nor relevant to the issues at
    hand.
Id. at 1004. Accordingly, the court excluded Dr. Sojka’s
testimony on grounds that it was unreliable and thus
inadmissible under Daubert v. Merrill Dow Pharms. Inc.,
509 U.S. 579 (1993), and Rule 702 of the Federal Rules of
Evidence. Id. at 1004-1005. The court also rejected
MarcTec’s arguments that the use of heat at an earlier
stage of the Cypher manufacturing process could satisfy
the heat bonding limitations. Specifically, the court found
that use of heat at other stages of the process has no
“bearing on whether the polymers are bonded to the
device by the application of heat,” and that MarcTec’s
expert testimony to the contrary ignored the court’s claim
construction, “is irrelevant to the question of infringe-
ment,” and is inadmissible under Daubert. Id. at 1006.
    As a separate and independent basis for granting
summary judgment, the court found that MarcTec could
not show infringement because: (1) it disclaimed stents
during prosecution to overcome the ’417 Palmaz Patent;
and (2) the Cypher device is a stent. Id. at 998-99.
                   3. The Prior Appeal
    MarcTec appealed the district court’s decision grant-
ing summary judgment in favor of Cordis. 2 In an August

    2   In an order dated September 23, 2009, the district
court granted the parties’ joint request to dismiss Cordis’s
MARCTEC   v. JOHNSON & JOHNSON                            10

2010 decision, we affirmed: (1) the district court’s con-
struction of the term “bonded”; and (2) the judgment of
noninfringement based on that construction. Prior Ap-
peal, 394 Fed. Appx. at 685. First, we found that the
“specification’s discussion of bonding, in the context of the
invention, is uniformly directed to heat bonding.” Id. at
687. Looking to the prosecution history, we noted that,
“[d]uring prosecution of the patents, the Applicants lim-
ited the claimed ‘bonding’ to heat bonding, in order over-
come [the Palmaz prior art],” and that “[l]imitations
clearly adopted by the applicant during prosecution are
not subject to negation during litigation.” Id. As such, we
found that prosecution history estoppel prevented Marc-
Tec from asserting a claim scope that includes bonding
without the application of heat. Although MarcTec ar-
gued that the doctrine of claim differentiation under-
mined the district court's claim construction because
dependent Claim 8 of the ’753 Patent “specifically de-
scribes the polymeric material as one that ‘is bonded to
the implant by the application of heat,’” we rejected this
argument on grounds that claim differentiation cannot
broaden claims beyond the scope that is consistent with
the specification and prosecution history. Id. Finally, we
noted that, although MarcTec argued that heat is used in
making the Cypher stent, it failed to produce sufficient
evidence of the use of heat during the bonding process to
avoid summary judgment. Id.
    As Cordis correctly notes, because we affirmed the
district court’s construction that “bonded” means bonded
by the application of heat, we did not reach the district

pending invalidity counterclaims, without prejudice, and
to enter a final judgment so that the case could proceed on
appeal.    MarcTec, LLC v. Johnson & Johnson, No.
07cv825, 2009 U.S. Dist. LEXIS 87426, *5 (S.D. Ill. Sept.
23, 2009).
11                          MARCTEC   v. JOHNSON & JOHNSON

court’s alternative basis for granting summary judgment,
which involved MarcTec’s disclaimer of stents.
        4. Motion for Attorney and Expert Fees
     After the district court granted summary judgment in
its favor, Cordis moved to have MarcTec’s suit declared
exceptional under 35 U.S.C. § 285, and to be compensated
for its reasonable attorney and expert witness fees. In its
motion, Cordis argued that MarcTec engaged in litigation
misconduct by, among other things: (1) misrepresenting
claim construction law to avoid intrinsic evidence;
(2) mischaracterizing the district court’s claim construc-
tion; and (3) offering “junk science” that was unreliable,
untestable, and had no relevance to this case. Cordis
further argued that MarcTec filed a frivolous and baseless
lawsuit and acted in bad faith by continuing to pursue its
claims without any evidence of infringement.
    In a February 23, 2010 decision, which is the subject
of the present appeal, the district court agreed with
Cordis and declared this case exceptional under § 285.
Specifically, the court found that MarcTec’s allegations of
infringement were “baseless” and “frivolous,” and that
MarcTec acted in “bad faith” in bringing and maintaining
this litigation. Exceptional Case Order, 2010 U.S. Dist.
LEXIS 15789, at *24-30. The court criticized MarcTec for
ignoring the specification and prosecution history in its
claim construction argument, both of which were fatal to
MarcTec’s proposed construction of the term “bonded.” Id.
at *25. The court found that, even after it had evidence
that the Cypher stent’s coating is applied at room tem-
perature and does not bond using heat, MarcTec contin-
ued to pursue its frivolous case “by relying on
mischaracterizations of the claim construction adopted by
this Court and expert testimony that did not meet the
requirements for scientific reliability or relevance re-
MARCTEC   v. JOHNSON & JOHNSON                            12

quired by FRE 702 and Daubert.” Id. at *26. The court
further noted that, “[w]ith Dr. Bonutti having represented
to the PTO that the claims exclude stents in order to
obtain allowance, MarcTec cannot turn around in litiga-
tion and assert the patents-in-suit against the Cypher
stent.” Id. at *24-25. Finally, the court held that the
“fees and expenses incurred by Cordis were reasonable in
light of the scope of patent litigation, the magnitude of the
damages sought by MarcTec and MarcTec’s litigation
misconduct.” Id. at *28 (emphasis added).
    Based on these findings, the district court awarded
Cordis $3,873,865.01 in attorney fees and expenses under
§ 285. In addition, pursuant to its inherent powers, the
court awarded Cordis its expert fees in the amount of
$809,788.02. MarcTec timely appealed. We have jurisdic-
tion pursuant to 28 U.S.C. § 1295(a)(1).

                        DISCUSSION
    MarcTec argues that the district court: (1) applied the
wrong standard in declaring this case exceptional under
35 U.S.C. § 285; and (2) abused its discretion in awarding
expert witness fees. We address each argument in turn.
For the reasons explained below, we find no error in the
district court’s decision and therefore affirm the attorney
and expert fees awarded.
     A. The District Court Did Not Err in Awarding
             Attorney Fees Under § 285.
    A district court has discretion to award reasonable at-
torney fees to a prevailing party in a patent case if the
court determines that the case is “exceptional.” 35 U.S.C.
§ 285. This discretion is not unbridled, however. Old
Reliable Wholesale, Inc. v. Cornell Corp., 635 F.3d 539,
543 (Fed. Cir. 2011) (citing Wedgetail, Ltd. v. Huddleston
Deluxe, Inc., 576 F.3d 1302, 1304 (Fed. Cir. 2009)). Given
13                           MARCTEC   v. JOHNSON & JOHNSON

the “substantial economic and reputational impact” of an
award of attorney fees, we must carefully examine the
record to determine whether the trial court clearly erred
in finding the case exceptional. Id. (quoting Medtronic
Navigation, Inc. v. BrainLAB Medizinische Computersys-
teme GmbH, 603 F.3d 943, 953 (Fed. Cir. 2010)).
    When deciding whether to award attorney fees under
§ 285, a district court engages in a two-step inquiry.
First, the court must determine whether the prevailing
party has proved by clear and convincing evidence that
the case is exceptional. Forest Labs., Inc. v. Abbott Labs.,
339 F.3d 1324, 1327 (Fed. Cir. 2003); see also Aspex
Eyewear Inc. v. Clariti Eyewear, Inc., 605 F.3d 1305, 1314
(Fed. Cir. 2010) (“The party seeking attorney fees under
§ 285 must establish, by clear and convincing evidence,
that the case is exceptional.”). Whether the district court
applied the correct legal standard under § 285 is a ques-
tion this court reviews de novo, and we review the court’s
exceptional case finding for clear error. Forest Labs., 339
F.3d at 1328. If the district court finds that the case is
exceptional, it must then determine whether an award of
attorney fees is justified. Cybor Corp. v. Fas Techs. Inc.,
138 F.3d 1448, 1460 (Fed. Cir. 1998) (en banc). We review
the district court’s decision to award attorney fees under
an abuse of discretion standard. Id.
     A case may be deemed exceptional under § 285 where
there has been “willful infringement, fraud or inequitable
conduct in procuring the patent, misconduct during
litigation, vexatious or unjustified litigation, conduct that
violates Federal Rule of Civil Procedure 11, or like infrac-
tions.” Serio-US Indus., Inc. v. Plastic Recovery Techs.
Corp., 459 F.3d 1311, 1321-22 (Fed. Cir. 2006). Where, as
here, the alleged infringer prevails in the underlying
action, factors relevant to determining whether a case is
exceptional include “the closeness of the question, pre-
MARCTEC   v. JOHNSON & JOHNSON                             14

filing investigation and discussions with the defendant,
and litigation behavior.” Computer Docking Station Corp.
v. Dell, Inc., 519 F.3d 1366, 1379 (Fed. Cir. 2008). Where
a patentee “prolongs litigation in bad faith, an exceptional
finding may be warranted.” Id.
     Absent litigation misconduct or misconduct in secur-
ing the patent, a district court can award attorney fees
under § 285 only if the litigation is both: (1) brought in
subjective bad faith; and (2) objectively baseless. Old
Reliable, 635 F.3d at 543-44 (quoting Brooks Furniture
Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378, 1381 (Fed.
Cir. 2005)). Under this standard, a patentee’s case “must
have no objective foundation, and the plaintiff must
actually know this.” iLOR, LLC v. Google, Inc., 631 F.3d
1372, 1377 (Fed. Cir. 2011). Whether a case is objectively
baseless requires an “objective assessment of the merits.”
Id. (quoting Brooks Furniture, 393 F.3d at 1382).
    On appeal, MarcTec argues that the district court ap-
plied the wrong standard in declaring this an exceptional
case under § 285. Specifically, MarcTec claims that the
district court erred as a matter of law when it deemed this
case exceptional “without first finding that the litigation
was brought in subjective bad faith, given the fact that
inequitable conduct by MarcTec was never alleged, and
given the fact that the district court consciously declined
to find MarcTec guilty of litigation misconduct.” Appel-
lant’s Br. 19. In response, Cordis argues that the district
court correctly deemed this case exceptional because the
court found that “MarcTec acted in ‘bad faith’ in pursuing
its baseless allegations and engaged in litigation miscon-
duct.” Appellee’s Br. 28.
    For the reasons set forth below, we agree with Cordis
and find that the district court’s decision, when read in its
entirety, reflects its determination that MarcTec: (1) acted
15                            MARCTEC   v. JOHNSON & JOHNSON

in bad faith in filing a baseless infringement action and
continuing to pursue it despite no evidence of infringe-
ment; and (2) engaged in vexatious and unjustified litiga-
tion conduct that unnecessarily prolonged the proceedings
and forced Cordis to incur substantial expenses.
      1. Subjective Bad Faith & Objectively Baseless
    In its decision awarding fees, the district court stated
as follows:
     MarcTec contends that subjective bad faith is
     needed to find a case exceptional under § 285.
     That is not the law. As discussed above, evidence
     that a plaintiff has ‘brought a baseless or frivolous
     suit . . . is a sufficient basis to require a district
     court to deem the case exceptional under § 285.’
Exceptional Case Order, 2010 U.S. Dist. LEXIS 15789, at
*20 (quoting Digeo, Inc. v. Audible, Inc., 505 F.3d 1362,
1367 (Fed. Cir. 2007)). Based on this language, MarcTec
argues that the district court applied the wrong law by
failing to recognize that, absent litigation misconduct, a
case cannot be deemed exceptional without a finding of
subjective bad faith. Specifically, MarcTec argues that:
(1) Cordis failed to prove, by clear and convincing evi-
dence, that MarcTec acted with subjective bad faith;
(2) the court ignored MarcTec’s evidence that it acted in
good faith; and (3) the litigation was not “objectively
baseless” because MarcTec advanced “substantial and
legitimate positions on claim construction.” Appellant’s
Br. 20, 25. We disagree.
    Regardless of the district court’s description of the
law, it is clear that the court made sufficient factual
findings to support the conclusion that MarcTec filed an
objectively baseless lawsuit in bad faith. Indeed, the
district court specifically found that MarcTec’s allegations
MARCTEC   v. JOHNSON & JOHNSON                           16

of infringement were “baseless” and “frivolous” and that it
acted in “bad faith in bringing and pressing this suit
when it had no basis for asserting infringement.” Excep-
tional Case Order, 2010 U.S. Dist. LEXIS 15789, at *24-
30. Although the district court used the term “bad faith,”
and did not specifically state that the bad faith found was
“subjective,” the court’s language, and its express findings
of fact, are consistent with and fully support a finding of
subjective bad faith. See Eltech Sys. Corp. v. PPG Indus.,
Inc., 903 F.2d 805, 810 (Fed. Cir. 1990) (“Under the head-
ing ‘Bad Faith Litigation,’ the court there set forth in
detail an overwhelming basis for finding that OxyTech
brought and maintained this suit in bad faith. Though
the court did not expressly find that OxyTech knew its
suit was baseless, many of its findings are compatible
with and only with that view.”). And, importantly, at oral
argument, counsel for both parties agreed that courts
normally use the term “bad faith” to mean subjective bad
faith. 3
    The district court made several findings supporting
its conclusion that MarcTec knew its allegations were
baseless but pursued them anyway. See Forest Labs., 339
F.3d at 1330. Specifically, the court found that:

   3     When asked if there is such a thing as “objective
bad faith,” counsel for Cordis responded: “Judge, I don’t
even know what objective bad faith is. To me, the differ-
ence in the court’s standard is objectively baseless . . .
subjectively bad faith -- bad faith is what’s in one’s mind
what’s in one’s heart.” Oral Argument at 18:47, available
at            http://www.cafc.uscourts.gov/oral-argument-
recordings/2010-1285/all. Likewise, when asked whether
bad faith is necessarily subjective, rather than objective,
counsel for MarcTec responded: “I believe it is your Honor.
I believe that bad faith, when it’s used in the cases . . .
references in the case law which don’t use the word sub-
jective do mean subjective bad faith.” Id. at 28:55.
17                           MARCTEC   v. JOHNSON & JOHNSON

     •   “Dr. Bonutti amended his claims during pat-
         ent prosecution to make clear that his inven-
         tion required the application of heat to a heat-
         bondable material . . . Documents produced to
         MarcTec in discovery show that Cypher’s
         polymer/drug coating is applied and adheres
         at room temperature without the use of heat.”
         Exceptional Case Order, 2010 U.S. Dist.
         LEXIS 15789, *8 (emphasis added).
     •   “With Dr. Bonutti having represented to the
         PTO that the claims exclude stents in order to
         obtain allowance, MarcTec cannot turn around
         in litigation and assert the patents-in-suit
         against the Cypher stent.” Id. at *24-25.
     •   “[E]ven after MarcTec had documentary evi-
         dence establishing that heat-bonding – which
         Dr. Bonutti told the Patent Office is required –
         is not used in the Cypher manufacturing proc-
         ess and Cordis moved for summary judgment
         on that ground, MarcTec pursued its frivolous
         action by relying on mischaracterizations of
         the claim construction adopted by this Court
         and expert testimony that did not meet the re-
         quirements for scientific reliability or rele-
         vance required by FRE 702 and Daubert.” Id.
         at *26.
    Each of these findings supports the conclusion that
MarcTec subjectively knew that it had no basis for assert-
ing infringement and therefore pursued this litigation in
bad faith. Although MarcTec argues that it had no way of
knowing that the district court would disagree with its
proposed claim construction, no reasonable application of
the principles this court enunciated in Phillips v. AWH
Corp., 415 F.3d 1303, 1313-19 (Fed. Cir. 2005) (en banc)
MARCTEC   v. JOHNSON & JOHNSON                            18

supports its position. As Cordis correctly argues, MarcTec
cannot claim to be ignorant of the references to heat in
the claims, the language in the specification discussing
the importance of heat to the bonding process, or Dr.
Bonutti’s statements to the PTO. Indeed, as we noted in
the prior appeal, the doctrine of prosecution history
estoppel prevented MarcTec from asserting its construc-
tion of the term “bonded.” After careful consideration and
review of the record, we agree with the district court that
MarcTec’s proposed claim construction, which ignored the
entirety of the specification and the prosecution history,
and thus was unsupported by the intrinsic record, was
frivolous and supports a finding of bad faith.
    MarcTec next argues that, because we did not de-
scribe its positions as frivolous or made in bad faith in the
prior appeal, we cannot endorse the district court’s deci-
sion to do so in this context. Specifically, MarcTec points
to language in our prior appeal where we addressed its
claim differentiation argument. MarcTec took the posi-
tion that the asserted claims did not require heat because
“dependent claim 8 of the ’753 patent specifically de-
scribes the polymeric material as one that ‘is bonded to
the implant by the application of heat.’” Prior Appeal, 394
Fed. Appx. at 687. Although we acknowledged that the
district court’s construction of “bonded” might render
some language in Claim 8 superfluous, we rejected the
conclusion that MarcTec’s construction could be rendered
viable on that ground alone, noting that “the doctrine of
claim differentiation can not broaden claims beyond their
correct scope, determined in light of the specification and
the prosecution history and any relevant extrinsic evi-
dence.”     Id. (quoting Multiform Desiccants, Inc. v.
Medzam, Ltd., 133 F.3d 1473, 1480 (Fed. Cir. 1998)).
Therefore, despite MarcTec’s suggestions to the contrary,
we rejected its claim differentiation argument and did so
19                           MARCTEC   v. JOHNSON & JOHNSON

readily; nothing in our discussion of that issue can be read
as an endorsement of that argument or a finding that it
was made in good faith. Simply put, the issue of bad faith
was not before us and not addressed in the earlier appeal.
    While it is clear that “[d]efeat of a litigation position,
even on summary judgment, does not warrant an auto-
matic finding that the suit was objectively baseless,” here
the record supports the district court’s finding that Marc-
Tec pursued objectively baseless infringement claims. See
Aspex, 605 F.3d at 1315. The district court found that the
“written description and prosecution histories of the
patents-in-suit, and other documentary evidence, demon-
strate that MarcTec’s patent infringement case was
baseless.” Exceptional Case Order, 2010 U.S. Dist. LEXIS
15789, at *24. The court further found that, because
MarcTec disclaimed stents to overcome the prior art, it
could not turn around and assert infringement against
the Cypher stent. Because the specification and prosecu-
tion history clearly refute MarcTec’s proposed claim
construction, the district court did not err in finding that
MarcTec’s infringement claims were objectively baseless.
See Netcraft Corp. v. eBay, Inc., 549 F.3d 1394, 1398 (Fed.
Cir. 2009) (noting that disputed claim language “must be
read in the context of the entire specification and prosecu-
tion history”); see also Eon-Net LP v. Flagstar Bancorp,
653 F.3d 1314, 1326 (Fed. Cir. 2011) (“[B]ecause the
written description clearly refutes Eon-Net’s claim con-
struction, the district court did not clearly err in finding
that Eon-Net pursued objectively baseless infringement
claims.”).
    MarcTec’s proposed claim construction was so lacking
in any evidentiary support that assertion of this construc-
tion was unreasonable and reflects a lack of good faith.
And, MarcTec’s decision to continue the litigation after
claim construction further supports the district court’s
MARCTEC   v. JOHNSON & JOHNSON                            20

finding that this is an exceptional case. Because MarcTec
has failed to show that the district court’s findings regard-
ing bad faith and objective baselessness were clearly
erroneous, we affirm the court’s decision awarding fees on
that ground.
                2. Litigation Misconduct
     In addition to finding that MarcTec filed an objec-
tively baseless lawsuit in bad faith, the district court
further found that MarcTec engaged in litigation miscon-
duct. This finding provides a separate and independent
basis for the court’s decision to award attorney fees.
Indeed, it is well-established that litigation misconduct
and “unprofessional behavior may suffice, by themselves,
to make a case exceptional under § 285.” Rambus Inc. v.
Infineon Techs. AG, 318 F.3d 1081, 1106 (Fed. Cir. 2003)
(citation omitted). Litigation misconduct typically “in-
volves unethical or unprofessional conduct by a party or
his attorneys during the course of adjudicative proceed-
ings.” Old Reliable, 635 F.3d at 549.
     Here, the district court found that the “fees and ex-
penses incurred by Cordis were reasonable in light of the
scope of patent litigation, the magnitude of the damages
sought by MarcTec and MarcTec’s litigation misconduct.”
Exceptional Case Order, 2010 U.S. Dist. LEXIS 15789, at
*28 (emphasis added). Despite this language, MarcTec
argues that the district court actually did not find that it
engaged in litigation misconduct. Specifically, MarcTec
points out that the district court: (1) did not adopt
Cordis’s proposed conclusions of law with respect to
litigation misconduct; and (2) never identified any par-
ticular acts that it felt constituted misconduct. In re-
sponse, Cordis argues that the district court’s “choice of
which proposed findings to adopt reflects nothing more
than its recognition that overlapping findings on this
21                           MARCTEC   v. JOHNSON & JOHNSON

subject were not needed.” Appellee’s Br. 49-50. And,
Cordis argues there are numerous factual findings de-
scribing MarcTec’s improper litigation tactics. We agree
with Cordis, and find that the district court’s decision,
taken in its entirety, reflects its conclusion that MarcTec
engaged in improper conduct sufficient to warrant an
award of attorney fees and expenses. Specifically, the
district court’s decision reveals that MarcTec engaged in
litigation misconduct when it: (1) misrepresented both the
law of claim construction and the constructions ultimately
adopted by the court; and (2) introduced and relied on
expert testimony that failed to meet even minimal stan-
dards of reliability, thereby prolonging the litigation and
the expenses attendant thereto.
     With respect to claim construction, MarcTec argues
that it was not improper for it to urge the district court to
adopt plain meaning constructions of the disputed claim
terms. While we agree that claim construction necessar-
ily involves consideration of the plain meaning of disputed
terms, here, as noted, MarcTec ignored language in the
specification and statements made during prosecution
that directly contradicted the plain meaning arguments it
advanced. In fact, as the district court found, counsel for
MarcTec misrepresented the law on claim construction
and encouraged the court to ignore the specification
unless it found an insoluble “ambiguity” in the claim
language. Exceptional Case Order, 2010 U.S. Dist. LEXIS
15789, at *9 (“The Federal Circuit has rejected this ap-
proach and held that the specification is ‘the single best
guide to the meaning of a disputed term.’”) (quoting
Phillips, 415 F.3d at 1320-21). While standing alone,
such mischaracterizations of Phillips would not warrant
an award of attorney fees, when coupled with MarcTec’s
decision to advance frivolous and unsupported allegations
of infringement premised on mischaracterizations of the
MARCTEC   v. JOHNSON & JOHNSON                            22

claim constructions adopted by the trial court, this misdi-
rection lends support to the district court’s finding of
litigation misconduct. 4
    Next, the district court found that MarcTec relied
upon inadmissible expert testimony that was “untested
and untestable” and did not meet the scientific reliability
standards set forth in Daubert. In particular, the court
excluded MarcTec’s expert’s theory that spraying the
drug/polymer coating onto the Cypher stent at nearly the
speed of sound would generate heat. Id. at *13-16. Al-
though we agree with MarcTec that exclusion of expert
testimony under Daubert does not automatically trigger a
finding of litigation misconduct, and in most cases likely
would not do so, we find that the circumstances of this
case were sufficiently egregious to support an award of
attorney fees.
    Finally, although the district court did not adopt all of
Cordis’s proposed findings on litigation misconduct, the
court’s decision to remove certain language could have
been motivated by a desire to avoid duplicity or to avoid
undue harshness. It is undisputed, however, that the
district court used the words “litigation misconduct” in its
order and set forth a litany of conduct in its factual find-
ings which it identified as mischaracterizations of the
facts, the law, and the court’s own rulings.

    4   Most pointedly, MarcTec argued that the court’s
construction did not actually require use of heat at the
point when the polymers were applied to the stent, only
that heat was needed to facilitate the manufacturing
process. Based on this faulty premise, MarcTec argued
that infringement could occur as long as heat was used at
any point during the manufacturing process – even long
before or long after bonding of the polymers to the stent
occurred. Even a cursory review of the record reveals how
frivolous this contention was when made. The district
court correctly concluded as much.
23                          MARCTEC   v. JOHNSON & JOHNSON

    Under the circumstances of this case, we find that the
district court’s findings are sufficient to support the
conclusion that MarcTec engaged in litigation misconduct.
MarcTec not only initiated a frivolous lawsuit, it persisted
in advancing unfounded arguments that unnecessarily
extended this litigation and caused Cordis to incur need-
less litigation expenses. This vexatious conduct is, by
definition, litigation misconduct, and provides a separate
and independent basis supporting the district court’s
determination that this case is exceptional. Accordingly,
we find that the district court did not abuse its discretion
in awarding the fees requested.
     B. The District Court Did Not Abuse its Discretion
                in Awarding Expert Fees.
     A district court has inherent authority “to impose
sanctions in the form of reasonable expert fees in excess of
what is provided for by statute.” Takeda Chem. Indus.,
Ltd. v. Mylan Labs., Inc., 549 F.3d 1381, 1391 (Fed. Cir.
2008). Use of this inherent authority is reserved for cases
where the district court makes a “finding of fraud or bad
faith whereby the ‘very temple of justice has been de-
filed.’” Amsted Indus. Inc. v. Buckeye Steel Castings Co.,
23 F.3d 374, 378 (Fed. Cir. 1994) (quoting Chambers v.
NASCO, Inc., 501 U.S. 32, 46 (1991)). Accordingly, not
every case that qualifies as exceptional under § 285 will
also qualify for sanctions under the court’s inherent
power. Id. We review a district court’s decision to award
expert fees under its inherent authority for an abuse of
discretion. Takeda, 549 F.3d at 1391.
    In its order awarding fees, the district court found
that: (1) “[e]xpert fees are recoverable in patent cases
where, as here, there was bad faith, such as the filing of a
frivolous action”; and (2) “[b]ecause of MarcTec’s bad faith
in bringing and pressing this suit when it had no basis for
MARCTEC   v. JOHNSON & JOHNSON                            24

asserting infringement, Cordis is awarded its expert fees
of $809,788.02 in the exercise of this Court’s inherent
power.” Exceptional Case Order, 2010 U.S. Dist. LEXIS
15789, at *30.
    On appeal, MarcTec argues that the district court
abused its discretion in awarding expert fees because: (1)
it “was not even accused of committing or attempting
fraud on the court or abusing the judicial process, or
otherwise defiling the judicial system”; and (2) the district
court did not find that § 285 was inadequate to “remedy
MarcTec's alleged misconduct.” Appellant's Br. 50. In
response, Cordis argues that the sums it expended on
experts were only necessary because MarcTec “pressed
forward after receiving documentary evidence that re-
futed its allegations, and because MarcTec had its experts
proffer junk science, including a bogus theory about
supposed temperature changes that were not capable of
being detected and an unrealistic test having no relation
to the accused product.” Appellee's Br. 29. We agree with
Cordis.
    Although, as a general matter, it is a better practice
for a district court to analyze expert witness fees sepa-
rately and to explain why an award of attorney fees under
§ 285 is insufficient to sanction the patentee, we find that
the circumstances in this case justify the district court’s
decision granting expert witness fees. See Takeda, 549
F.3d at 1392 (Bryson, J., concurring) (“Where, as here, the
district court’s award of attorney fees under section 285
and expert witness fees under its inherent authority are
predicated on the same conduct, the district court must
offer a reasoned explanation for why the award of attor-
ney fees and expenses under section 285 is not a sufficient
sanction for the conduct in question.”). This is particu-
larly true given that: (1) Cordis was forced to incur expert
witness expenses to rebut MarcTec's unreliable and
25                          MARCTEC   v. JOHNSON & JOHNSON

irrelevant expert testimony which was excluded under
Daubert; and (2) the amount Cordis was required to
expend on experts was not compensable under § 285.
Because MarcTec's vexatious conduct and bad faith
increased the cost of litigation in ways that are not com-
pensated under § 285, we find that the district court did
not abuse its discretion in awarding expert fees to Cordis.
                       CONCLUSION
     For the foregoing reasons, and because we find that
MarcTec’s remaining arguments are without merit, we
affirm the district court’s determination that this case is
exceptional within the meaning of 35 U.S.C. § 285, and its
award of attorney fees and expert fees to Cordis in the
amount of $4,683,653.03.
                      AFFIRMED