The decided cases, and the commentators, are consentient in the view that Rule 37(b)(2)'s plain language means exactly what it says. See, e.g., Badalamenti v. Dunham's, Inc. 896 F.2d 1359, 1362 (Fed. Cir.), cert. denied, ___ U.S. ___, 111 S.Ct. 142, 112 L.Ed.2d 109 (1990); Salahuddin v. Harris, 782 F.2d 1127, 1131 (2d Cir. 1986); Laclede Gas Co. v. G. W. Warnecke Corp., 604 F.2d 561, 565 (8th Cir. 1979); 4A J. Moore J. Lucas, Moore's Federal Practice ¶ 37.03[2], at 37-62 to 37-64 (2d ed. 1991); 8 C. Wright A. Miller, Federal Practice and Procedure § 2289, at 790 (1970). In this case, therefore, the propriety of dismissing plaintiffs' complaint under Rule 37(b)(2) hinges on the answer to the following question: Did either Ward's refusal to answer the tax exemption questions during his deposition or the plaintiffs' failure to produce the Impex documents transgress "an order to provide or permit discovery," Fed.R.Civ.P. 37(b)(2), then in effect?

Gilead contends that there were better and more efficacious alternatives such as Viread® and another generic product that were on the doorstep of entering the market. As previously discussed, it is within the court's discretion whether or not to award attorney's fees. Machinery Corp. of Am., 774 F.2d at 471; Badalamenti v. Dunham's, Inc., 896 F.2d 1359, 1364 (Fed. Cir. 1990). It is equally clear that the defendant bears the burden of proving, by clear and convincing evidence, that this case is exceptional.

An award of fees is a two-step process. First, the court must find that the case is an "exceptional case". If the court determines an exceptional case exists, it then, in its discretion, must decide whether to award attorney's fees. Badalamenti v. Dunham's, Inc., 896 F.2d 1359, 1365 (Fed. Cir. 1990) ( Badalamenti). The party seeking an exceptional case status has the burden of proving that its case is exceptional by clear and convincing evidence.

" The purpose of the statute is to allow the district court discretion to award fees "where it would be grossly unjust that the winner be left to bear the burden of his own counsel which prevailing litigants normally bear." Badalamenti v. Dunham's, Inc., 896 F.2d 1359, 1364 (Fed. Cir. 1990) (quoting J.P. Stevens Co., Inc. v. Lex Tex Ltd., 822 F.2d 1047, 1052 (Fed. Cir. 1987)) (internal quotation marks omitted). Congress intended that district courts use this discretion sparingly, as the statute is a departure from the usual "American" rule that counsel fees are not awarded to the prevailing party in an action at law.

Plaintiff asserts these discrepancies are attributable to the lapse of time between the sale of the prototypes in 1981 and 82 and the preparation of the declaration in October 1984. Plaintiff states they may have been careless, negligent, or inattentive in attempting to review 2-3 year old sales records but that doesn't amount to intent to deceive. Plaintiff asserts that this is not an "exceptional case" warranting attorney's fees. Plaintiff asserts that the purpose of 35 U.S.C. § 285 is to provide the district court with the discretion to award attorneys fees where it would be grossly unjust for the winner be left to bear the burden of his counsel fees. Badalamenti v. Dunham's, Inc., 896 F.2d 1359, 1364 (Fed. Cir. 1989). Plaintiff contends that the cases cited by the defendant are distinguishable and this court should follow Western Marine Electronics v.Furuno Electric Co., Ltd., 764 F.2d 840, 842 (Fed. Cir. 1985) where the court affirmed the district court's denial of attorney's fees in an action involving the on-sale bar issue even though the district court had determined that the patentee had not been forthright in producing certain documents and that some of its interrogatory answers may have been deliberately misleading.

That sanction hasn't yet been approved by the district court and isn't before us. Relying on Badalamenti v. Dunham's, Inc., 896 F.2d 1359 (Fed. Cir. 1990), defendants contend that the court abused its discretion because they had objected to the discovery requests as ambiguous, and plaintiffs never "tested" those objections. But plaintiffs' motion to compel discovery is the only testing that Rule 37(a)(4) requires.

[ 32] Relying on Badalamenti v. Dunham's, Inc., 896 F.2d 1359 (Fed. Cir. 1990), defendants contend that the court abused its discretion because they had objected to the discovery requests as ambiguous, and plaintiffs never "tested" those objections. But plaintiffs' motion to compel discovery is the only testing that Rule 37(a)(4) requires.

The imposition of sanctions for misconduct during discovery is not unique to this court's jurisdiction. See, e.g., Wexell v. Komar Indus., Inc., 18 F.3d 916, 919, 29 USPQ2d 2017, 2020 (Fed. Cir. 1994) (reviewing discovery sanctions under Sixth Circuit standards); Badalamenti v. Dunham's, Inc., 896 F.2d 1359, 1362, 13 USPQ2d 1967, 1970 (Fed. Cir. 1990) (same). Accordingly, this court applies the law of the pertinent regional circuit, in this case the United States Court of Appeals for the Sixth Circuit. See Pro-Mold Tool Co. v. Great Lakes Plastics, Inc., 75 F.3d 1568, 1574, 37 USPQ2d 1626, 1631 (Fed. Cir. 1996).

See J.P. Stevens Co. v. Lex Tex Ltd., 822 F.2d 1047, 1050, 3 USPQ2d 1235, 1237 (Fed. Cir. 1987). The first step concerns a question of fact which we review for clear error, see Badalamenti v. Dunham's Inc., 896 F.2d 1359, 1364, 13 USPQ2d 1967, 1972 (Fed. Cir.), cert. denied, 498 U.S. 851, 111 S.Ct. 142, 112 L.Ed.2d 109 (1990), and the second lies within the discretion of the trial judge, which we review for abuse, see Mathis v. Spears, 857 F.2d 749, 754, 8 USPQ2d 1029, 1033 (Fed. Cir. 1988).

This court applies the law of the pertinent regional circuit when the precise issue to be addressed involves an interpretation of the Federal Rules of Civil Procedure. Biodex Corp. v. Loredan Biomedical, Inc., 946 F.2d 850, 857 n. 10, 20 USPQ2d 1252, 1258 n. 10 (Fed. Cir. 1991), cert. denied, ___ U.S. ___, 112 S.Ct. 2957, 119 L.Ed.2d 579 (1992); Badalamenti v. Dunham's, Inc., 896 F.2d 1359, 1362, 13 USPQ2d 1967, 1970 (Fed. Cir.) (reviewing Rule 37(b) discovery sanctions under Sixth Circuit standard), cert. denied, 498 U.S. 851, 111 S.Ct. 142, 112 L.Ed.2d 109 (1990). In the Sixth Circuit, review of the district court's dismissal of a complaint pursuant to Rule 37(b)(2)(C) is for an abuse of discretion. Bank One of Cleveland, N.A. v. Abbe, 916 F.2d 1067, 1073 (6th Cir. 1990).