Extremity Medical, LLC v. Nextremity Solutions, Inc.

N OTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
EXTREMITY MEDICAL, LLC,
Plaintiff-Cross-Appellant
v.
NEXTREMITY SOLUTIONS, INC.,
Defendant-Appellant
ZIMMER BIOMET HOLDINGS, INC., ZIMMER,
INC.,
Defendants
______________________
2025-1160, 2025-1185
______________________
Appeals from the United States District Court for the
District of Delaware in No. 1:22-cv-00239-GBW, Judge
Gregory Brian Williams.
______________________
Decided: May 11, 2026
______________________
MICHAEL J. ZINNA, Kelley Drye & Warren, LLP, New
York, NY, for plaintiff-cross-appellant. Also represented
by ABHISHEK BAPNA, VINCENT F ERRARO.
N ICHOLAS MESITI, Heslin, Rothenberg, Farley & Mesiti,
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EXTREMITY MEDICAL, LLC v. NEXTREMITY SOLUTIONS, INC. 2
P.C., Albany, NY, for defendant-appellant. Also repre-
sented by BRETT MICHAEL HUTTON, T HOMAS SICA.
______________________
Before M OORE, Chief Judge, L OURIE and C UNNINGHAM ,
Circuit Judges.
L OURIE, Circuit Judge.
This appeal arises from parallel proceedings.
Extremity Medical, LLC (“Extremity”) sued Nextremity
Solutions, Inc. (“Nextremity”) for infringement of U.S.
Patent 8,303,589 (“the ’589 patent”) in the United States
District Court for the District of Delaware. That action was
stayed pending resolution of an inter partes review (“IPR”)
of the ’589 patent. After the Patent Trial and Appeal
Board’s (“the Board”) final decision finding
unpatentability, Nextremity moved in the district court to
recover attorney fees and costs that it incurred arising from
both the district court litigation and IPR proceeding under
35 U.S.C. § 285. The district court found the case was
“exceptional” under § 285 and awarded attorney fees and
costs to Nextremity for the district court litigation in the
amount of $52,573 but denied attorney fees and costs to
Nextremity in the amount of $343,660.86 for the IPR
proceeding.
Nextremity now appeals from the final decision of the
district court denying its motion for attorney fees and costs
incurred during the IPR proceeding. See Extremity Med.,
LLC v. Nextremity Sols., Inc., No. CV 22-239-GBW,
2024 WL 4384202, at *1 (D. Del. Oct. 3, 2024) (“Decision”).
Extremity cross-appeals from the exceptional-case
determination and award of attorney fees and costs to
Nextremity for the district court litigation. Id. For the
reasons below, we affirm.
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EXTREMITY MEDICAL, LLC v. NEXTREMITY SOLUTIONS, INC. 3
BACKGROUND
Extremity owns the ’589 patent, which relates to
orthopedic implant devices. J.A. 22; ’589 patent col. 1
ll. 14–15. In January 2018, Extremity sent Nextremity a
letter accusing a Nextremity product system of infringing
claim 59 of the ’589 patent. See J.A. 129–30. Nextremity
responded, denying infringement and providing a list of
prior art that it argued rendered claim 59 invalid. Id. The
prior art included U.S. Patents 4,622,959 (“Marcus”) and
6,579,293 (“Chandran”). Id. In November 2021, Extremity
sent Nextremity another letter alleging that Nextremity’s
InCore Lapidus System infringed claim 59 of the ’589
patent. See Decision, 2024 WL 4384202, at *2;
J.A. 122–23. In January 2022, Nextremity responded,
again denying infringement and providing a list of prior art
that it argued rendered claim 59 invalid, which again
included Marcus and Chandran. Decision, 2024 WL
4384202, at *2; J.A. 125–26.
In February 2022, Extremity sued Nextremity,1
asserting that the InCore Lapidus System infringed
claim 59 of the ’589 patent. J.A. 20–33. Nextremity then
filed a petition for IPR at the Board, asserting that claim
59 was unpatentable as anticipated by, inter alia, Marcus
and Chandran. J.A. 132–94. In August 2022, the Board
granted institution of the IPR. J.A. 196–230. The district
court then stayed its case upon stipulation of the parties.
J.A. 17; J.A. 93–95.
Before the Board, Extremity moved to amend claim 59,
J.A. 248, but did not submit arguments in support of claim
59’s patentability, see J.A. 236–42. In response to the
motion to amend, the Board issued a Preliminary Guidance
1 Extremity also sued Zimmer Biomet Holdings, Inc.
and Zimmer Inc. for the same alleged infringement, but
that case is not before us. J.A. 20–21, 24.
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EXTREMITY MEDICAL, LLC v. NEXTREMITY SOLUTIONS, INC. 4
stating that Nextremity had shown a reasonable likelihood
that the proposed substitute claim was unpatentable. J.A.
247–57. Extremity then filed a revised motion to amend
claim 59. See J.A. 297.
In July 2023, the Board issued its final written decision
finding that Nextremity proved by a preponderance of the
evidence that claim 59 of the ’589 patent was unpatentable
as anticipated by, inter alia, Marcus or Chandran. J.A.
263, 267, 286–97. The Board also found Extremity’s
proposed substitute claim unpatentable because it would
have been rendered obvious by Marcus, Chandran, and a
third reference. Id. at 263, 320–22. The Board noted that
Extremity “d[id] not provide[] specific arguments
challenging [Nextremity’s] position regarding the
patentability of [claim 59]” with regard to both Marcus and
Chandran. J.A. 286, 292. Extremity did not appeal the
Board’s decision. J.A. 96.
After the Board issued its final written decision, the
district court lifted the stay and dismissed the action with
prejudice. J.A. 17. Nextremity then moved for attorney
fees and costs. J.A. 98–99. It sought attorney fees and
costs incurred in both the district court litigation and the
IPR proceeding under 35 U.S.C. § 285. J.A. 696–97, 710–
18. The district court granted the motion with respect to
the district court litigation but denied it with respect to the
IPR proceeding. Decision, 2024 WL 4384202, at *1.
Both parties timely appealed, and we have jurisdiction
under 28 U.S.C. § 1295(a)(1).2
2 This case was originally scheduled for oral argu-
ment, but after counsel for Extremity moved to continue
the argument date, ECF 48, we determined that oral argu-
ment was not necessary and now decide the case without
oral argument, see Fed. R. App. P. 34(a)(2).
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EXTREMITY MEDICAL, LLC v. NEXTREMITY SOLUTIONS, INC. 5
D ISCUSSION
Nextremity appeals the denial of attorney fees and
costs incurred during the IPR proceeding. Nextremity
Open. Br. 7. Extremity cross-appeals the grant of attorney
fees and costs incurred during the district court litigation.
Extremity Open. Br. 7.
I
We first consider Nextremity’s appeal, which turns on
whether the district court should have awarded attorney
fees and costs under § 285 for the IPR proceeding.
Nextremity Open. Br. 14. Section 285 provides that “[t]he
court in exceptional cases may award reasonable attorney
fees to the prevailing party.” We review the district court’s
determination as to the scope of § 285 de novo. Dragon
Intell. Prop. LLC v. DISH Network L.L.C., 101 F.4th 1366,
1371 (Fed. Cir. 2024) (citing Waner v. Ford Motor Co.,
331 F.3d 851, 857 (Fed. Cir. 2003)).
The district court, relying on our decision in Dragon,
concluded that Nextremity could not recover attorney fees
and costs incurred during the IPR proceeding. Decision,
2024 WL 4384202, at *5 (citing 101 F.4th at 1371). We
agree.
In Dragon, we held that § 285 does not permit a party
to collect attorney fees and costs from a “voluntarily
undertaken parallel IPR proceeding[].” 101 F.4th at 1372.
There, after the accused infringer petitioned for IPR and
the district court stayed the case, the Board found the
asserted claims unpatentable. Id. at 1369. The accused
infringer then moved for attorney fees incurred during the
IPR proceeding, arguing that the IPR was “part and parcel”
of the district court litigation such that attorney fees and
costs were recoverable under § 285. Id. at 1371. We
rejected that argument, stating that the accused infringer
strategically pursued the IPR proceeding in lieu of
litigating invalidity before the district court. Id. In doing
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EXTREMITY MEDICAL, LLC v. NEXTREMITY SOLUTIONS, INC. 6
so, we highlighted the voluntary nature of the IPR
proceeding. Id. at 1371–72 (citing PPG Indus., Inc. v.
Celanese Polymer Specialties Co., 840 F.2d 1565 (Fed. Cir.
1988)).
We further explained that that conclusion follows from
our precedent that IPR proceedings are not “cases” under
§ 285, id. (citing Amneal Pharms. LLC v. Almirall, LLC,
960 F.3d 1368, 1371–72 (Fed. Cir. 2020)), and that
allowing such recovery under § 285 would undermine the
principle that “a district court is particularly well-
positioned to determine whether a case before it is
exceptional because it ‘lives with the case over a prolonged
period of time,’” id. at 1372 (quoting Highmark Inc. v.
Allcare Health Mgmt. Sys., Inc., 572 U.S. 559, 564 (2014)).
We conclude that Dragon applies here. Just like the
accused infringer in Dragon, Nextremity “voluntarily
pursued parallel proceedings at the Board instead of
arguing invalidity before the district court.” See id. at
1371; J.A. 132 (Nextremity’s petition for IPR). And § 285
does not provide for recovery of attorney fees and costs
incurred during a voluntarily undertaken parallel IPR
proceeding. Dragon, 101 F.4th at 1372. That Nextremity
notified Extremity of prior art in its pre-suit letters, that
Extremity stipulated to the stay pending the IPR, or that
Extremity attempted to amend claim 59 does not change
the voluntary nature of the IPR proceeding; they did not
compel Nextremity to argue unpatentability at the Board.
See id. at 1371.
Nextremity’s arguments to the contrary are
unavailing. It first argues that the “rigid rule” from
Dragon conflicts with the Supreme Court case of Sullivan
v. Hudson, 490 U.S. 877 (1989). Nextremity Open. Br. 19.
Specifically, Nextremity points to the language in Sullivan
that “where administrative proceedings are intimately tied
to the resolution of the judicial action and necessary to the
attainment of the results Congress sought to promote by
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EXTREMITY MEDICAL, LLC v. NEXTREMITY SOLUTIONS, INC. 7
providing for fees, they should be considered part and
parcel of the action for which fees may be awarded.” Id.
(quoting 490 U.S. at 888) (emphasis added). Nextremity
argues that the IPR here was “intimately tied” to the
district court action because the parties “knew in advance”
that an IPR would be commenced, that the IPR decision
would be binding on the parties, it would have an estoppel
effect on the district court litigation, and Extremity
attempted to use the IPR proceeding to amend claim 59.
Id. at 21–22.
Those arguments are unpersuasive, as Nextremity
takes the quote from Sullivan out of context. Sullivan
involved a mandatory administrative proceeding on
remand from a district court. 490 U.S. at 889–90. But
here, there is no such mandatory administrative
proceeding. As stated above, Nextremity petitioned for IPR
of its own volition. Furthermore, we have previously
explained that Sullivan applies to a “narrow class of
qualifying administrative proceedings . . . where a suit has
been brought in a court, and where a formal complaint
within the jurisdiction of a court of law remains pending
and depends for its resolution upon the outcome of the
administrative proceedings.” Amneal, 960 F.3d at 1372
(cleaned up) (emphasis in original). That is not the case
here. The fact that the IPR may have downstream effects
on district court litigation does not convert it into a
proceeding “intimately tied” to the district court case under
Sullivan. See id.
Nextremity finally argues that precluding the recovery
of attorney fees and costs from IPR proceedings under
§ 285 conflicts with the “‘holistic, equitable approach’ that
must consider the ‘totality of circumstances’ in determining
whether a case is ‘exceptional’ under § 285.” Nextremity
Open. Br. 19–20 (quoting Octane Fitness, LLC v. ICON
Health & Fitness, Inc., 572 U.S. 545, 550, 553–54 (2014)).
That argument too is unpersuasive. The district court
considered the totality of the circumstances in the case
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EXTREMITY MEDICAL, LLC v. NEXTREMITY SOLUTIONS, INC. 8
before it. See Dragon, 101 F.4th at 1372. As we noted in
Dragon, if “‘cases’ under § 285 [were] to include IPR
proceedings, district court judges would be tasked with
evaluating the exceptionality of arguments, conduct, and
behavior in a proceeding in which they had no
involvement.” Id.
II
We next consider Extremity’s cross-appeal, which
turns on whether the district court properly considered the
case to be “exceptional” under § 285.3 Extremity Open.
Br. 7.
“[A]n ‘exceptional’ case is simply one that stands out
from others with respect to the substantive strength of a
party’s litigating position . . . or the unreasonable manner
in which the case was litigated.” Octane Fitness, 572 U.S.
at 554. “District courts may determine whether a case is
‘exceptional’ in the case-by-case exercise of their discretion,
considering the totality of the circumstances.” Id. We
review exceptionality determinations for an abuse of
discretion. Dragon, 101 F.4th at 1370 (citing Highmark,
572 U.S. at 564). “A district court abuses its discretion
when it ‘fail[s] to conduct an adequate inquiry.’” Id.
(quoting Atl. Rsch. Mktg. Sys., Inc. v. Troy, 659 F.3d 1345,
1360 (Fed. Cir. 2011)).
The district court concluded that the case was
“exceptional” because Extremity (1) conducted no pre-
litigation investigation, even though it was on notice of the
Marcus and Chandran prior art; (2) did not defend claim
59 before the Board; and (3) put forth no substantive
3 Section 285 also requires that Nextremity be a
“prevailing party.” See 35 U.S.C. § 285. The parties agreed
that Nextremity was a prevailing party before the district
court, Decision, 2024 WL 4384202, at *1, and do not
dispute that issue on appeal.
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EXTREMITY MEDICAL, LLC v. NEXTREMITY SOLUTIONS, INC. 9
arguments in favor of its litigation position throughout the
district court case. Decision, 2024 WL 4384202, at *3–5.
Extremity first argues that the district court erred by
shifting the burden of proof and drawing adverse
inferences against Extremity. Extremity Open. Br. 52–56.
We disagree. Nextremity made a claim for attorney fees
and costs, but Extremity failed to rebut the evidence
regarding a lack of pre-suit investigation and validity
defenses; the district court properly considered the totality
of the evidence before it. See Decision, 2024 WL 4384202,
at *3–5. There was no shifting of the burden of proof or
drawing of adverse inferences.
Extremity next argues that the district court
improperly weighed the evidence. Extremity Open.
Br. 56–63. Again, we disagree. As stated below, the
district court acted within its discretion in finding that
Nextremity’s pre-suit letters, when combined with
Extremity’s lack of pre-suit investigation and its failure to
make its validity case at the district court, support an
exceptional-case determination.4
The district court thus did not abuse its discretion in
finding the case to be “exceptional” under § 285 on the
record before us. Despite awareness of relevant prior art
years before commencing the suit, Extremity failed to
conduct any meaningful investigation into the prior art.
See Decision, 2024 WL 4384202, at *3; see also J.A. 129–30.
Furthermore, it did not develop or maintain a substantive
validity defense for claim 59 and offered no meaningful
4 Extremity, only on reply, contends that the district
court abused its discretion when it considered Extremity’s
failure to defend claim 59 during the IPR. Extremity Reply
Br. 21 (citing Decision, 2024 WL 4384202, at *4). To the
extent that was error, it was harmless because we do not
rely on it.
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EXTREMITY MEDICAL, LLC v. NEXTREMITY SOLUTIONS, INC. 10
arguments in support of its position throughout the district
court litigation. See Decision, 2024 WL 4384202, at *5.
Viewed together, the record reflects more than ordinary
litigation weakness; it supports the district court’s
conclusion that Extremity’s litigating position “stands out”
from typical patent disputes in which parties advance and
defend colorable validity theories. See Octane Fitness,
572 U.S. at 554. Extremity’s asserted good-faith belief and
efficiency arguments, see Extremity Open. Br. 47–51, do
not outweigh this pattern of unsupported litigation
conduct, and the district court, using the required “holistic
and equitable approach,” Bayer CropScience AG v. Dow
AgroSciences LLC, 851 F.3d 1302, 1306 (Fed. Cir. 2017),
acted within its discretion in deeming the case exceptional.
CONCLUSION
We have considered the remainder of the parties’
arguments but find them unpersuasive. For the foregoing
reasons, the judgment of the district court is affirmed.
AFFIRMED
COSTS
No costs.
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