Costs Awarded to Defendant After Case Dismissed for Mootness

B.E. TECHNOLOGY, L.L.C. v. FACEBOOK, INC.

Before Lourie, Plager, and O’Malley. Appeal from the United States District Court for the Western District of Tennessee.

Summary: A decision on the merits is not a prerequisite to a finding of prevailing party status. 

B.E. Technology, L.L.C. (“B.E.”) filed suit in the Western District of Tennessee accusing Facebook of patent infringement. Facebook petitioned for inter partes review of the asserted claims. The Board held the asserted claims were unpatentable—a decision affirmed on appeal. Facebook then moved in District Court for judgment on the pleadings—seeking dismissal with prejudice and costs under Rule 54(d). B.E. agreed that the dismissal was appropriate, but argued that the claims should be dismissed for mootness. The District Court dismissed the case for mootness and awarded Facebook costs under Rule 54(d). B.E. appealed the District Court’s decision to award costs to the Federal Circuit.

The Federal Circuit affirmed the District Court’s decision. B.E. argued that because the case was dismissed as moot, and not on its merits, Facebook did not “prevail” in District Court and should not have been awarded costs. The Federal Circuit looked to the Supreme Court’s guidance on the interpretation of the term “prevailing party.” The Federal Circuit relied on CRST Van Expedited, Inc. v. E.E.O.C., 136 S. Ct. 1642 (2016), which held that a merits decision is not a prerequisite to a finding of prevailing party status and explained that a “defendant has… fulfilled its primary objective whenever the plaintiff’s challenge is rebuffed, irrespective of the precise reason for the court’s decision.” The Federal Circuit found that Facebook obtained the outcome it sought via the mootness dismissal because it had rebuffed B.E.’s attempt to alter the parties’ legal relationship in an infringement suit. 

Editor: Paul Stewart