U.S. Supreme Court Rules That the Decision to Award Attorney Fees in Patent Cases Rests Squarely in the District Court’s Discretion

The Supreme Court, on April 29, 2014, unanimously ruled on two cases related to the Patent Act’s fee shifting provision under 35 U.S.C. § 285.1 In Octane Fitness LLC v. Icon Health & Fitness Inc. (case number 12-1184), the Court reversed the decision of the Court of Appeals for the Federal Circuit upholding the district court’s denial of attorney fees to Octane, the prevailing party and accused patent infringer. Striking down the framework established by the Federal Circuit in Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F. 3d 1378 (Fed. Cir. 2005) as “unduly rigid” and inconsistent with statutory context, the Court in Octane held that “[d]istrict courts may determine whether a case is ‘exceptional’ in the case-by-case exercise of their discretion, considering the totality of the circumstances.” (Octane, slip op. at 8 (emphasis added)). Dovetailing off of this decision, the Court in Highmark Inc. v. Allcare Health Mgmt. Sys. Inc. (case number 12-1163) vacated the Federal Circuit’s judgment denying attorney fees to Highmark, the accused infringer, as being improperly based on a de novo review of the district court’s decision. In view of Octane’s clear delegation of the § 285 inquiry to the district court’s discretion, the Court in Highmark held that “an appellate court should review all aspects of a district court’s § 285 determination for abuse of discretion.” (Highmark, slip op. at 1 (emphasis added)). Justice Sotomayor delivered the opinion of the Court in both cases.

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Topics:  Attorney's Fees, Brooks Furniture, Highmark v. Allcare, Octane Fitness v. ICON, Patent Infringement, Patent Litigation, Patents, SCOTUS

Published In: Civil Procedure Updates, Civil Remedies Updates, Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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