Section 285 of the Patent Act provides: “The court in exceptional cases may award reasonable attorney fees to the prevailing party.” But, does the Seventh Amendment require a jury trial to decide the facts forming the basis of an award of attorney’s fees under § 285 of the Patent Act? In AIA America v. Avid Radiopharma (Fed. Cir. 2017), the Federal Circuit has ruled that the factual basis for an attorney fee award need not be decided by a jury — affirming a $4 million fee award that followed a jury trial on the sole issue of whether the plaintiff (AIA) owned the asserted patents. U.S. Patent Nos. 5,455,169 and 7,538,258.
AIA America, Inc. appealed the district court’s award of attorney’s fees to the Federal Circuit and argued that, when an award of attorney’s fees is based in part or in whole on a party’s state of mind, intent, or culpability, only a jury may decide those issues. The Federal Circuit rejected the argument and ruled that AIA’s right to a jury trial under the Seventh Amendment was not violated.
The Seventh Amendment provides that: “In Suits at common law,… the right of trial by jury shall be preserved…. “ The Federal Circuit reasoned:
“ The phrase “suits at common law” refers to suits in which only legal rights and remedies were at issue, as opposed to equitable rights and remedies. … A legal remedy requires a jury trial on demand, while an equitable remedy does not implicate the right to a jury trial. … A two-step inquiry determines whether a modern statutory cause of action involves only legal rights and remedies. Tull v. United States, 481 U.S. 412, 417–18 (1987). First, we must ‘compare the statutory action to 18th-century actions brought in the courts of England prior to the merger of the courts of law and equity.’ Id. at 417. ‘Second, we examine the remedy sought and determine whether it is legal or equitable in nature..’ Id. at 417–18.”
The Court concluded that “[b]oth steps of the Tull test reflect that requests for attorney’s fees under § 285 are equitable and do not invoke the Seventh Amendment right to a jury trial.” Further, the Court rejected the argument that “if a decision on attorney’s fees involves considerations of a party’s state of mind, intent, and culpability, then those questions must be presented to a jury under the Seventh Amendment,” noting that AIA failed to cite any cases finding that the Seventh Amendment can attach to equitable issues. Further, “In 18th-century England, if a claim was in the court of equity, the equity court had the discretion to submit a claim to a jury but was never required to submit any issue to a jury, regardless of whether it was deciding issues of state of mind, intent, and culpability. Garsed v. Beall, 92 U.S. 685, 695 (1875).