by Dennis Crouch
The Federal Circuit has affirmed a $3.2 million fee-and-expense award against the Carnegie Institution of Washington and its now-bankrupt licensee M7D (the company behind WD Lab Grown Diamonds) following their failed infringement suit against Fenix Diamonds. Carnegie Inst. of Wash. v. Fenix Diamonds LLC, Nos. 2024-1804, -1824 (Fed. Cir. Sept. 17, 2026) (nonprecedential). The panel held that District Judge Rakoff did not abuse his discretion in finding the case exceptional under 35 U.S.C. § 285, because plaintiffs’ infringement positions became objectively baseless in July 2020, about a month after Fenix produced its Indian supplier’s manufacturing evidence. The court also affirmed an inherent-power award of expert fees and other non-taxable expenses, and it held Carnegie, the patent owner, jointly and severally liable with M7D for the full amount.
If you have been following fee-awards in patent cases, you might ask something like: Why is a 2026 fee decision still talking about objective baselessness? The Supreme Court eliminated it as a requirement for § 285 fees in 2014.
Although fees can still be awarded even if the case was not objectively baseless, the standard survives because it is a clear standard that is easy to review and is certainly enough to support a fee award. In this case, the panel expressly declined to reach Judge Rakoff’s alternative finding that plaintiffs litigated unreasonably — a question that involves much more nuance — since it was able to affirm on objectively baseless.
An interesting footnote in the case suggests that the patentee might have actually had a good argument to raise – but failed to do so. The court goes on to conclude that the baselessness inquiry is limited to arguments the patentee actually made, not those that could have been pursued.
