Patent cases are risky and expensive — often extremely expensive. The U.S. Supreme Court’s recent decisions in Octane Fitness LLC and Highmark, Inc. enhance litigation risks in patent infringement suits where high stakes are already at play.1 Those litigation risks are increased by granting the trial judge broader discretion to make an attorney’s fee award in favor of the prevailing party and by granting more deference to the discretionary award when appealed. The broader discretion/lower threshold imposes a disincentive against bringing a meritless suit. But the broader discretion also requires an ongoing risk-reward analysis for both plaintiffs and defendants. That analysis starts before the case is filed and continues throughout the case. The analysis requires more scrutiny after a party learns of material information affecting the merits of its litigation position and after the judge makes material decisions, intimating that the case is exceptional and may warrant a fee award “considering the totality of the circumstances.”
A recent industry survey on the costs of taking a patent infringement lawsuit all the way through trial pegs the price tag anywhere between $1.5 to $2 million for simple cases, and $5 million or more for complicated cases. Confronted with these litigations costs, companies have a tremendous incentive to settle the case rather than pay to litigate the claim, even when faced with marginal claims for patent infringement.
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