High Court Takes Up Patent Case Fee Awards
(CN) - The Supreme Court said Tuesday it will hear a case that could make it easier for accused patent infringers who successfully defend themselves in court to collect attorneys' fees.
Octane Fitness was sued by Icon Health & Fitness in 2011 for allegedly infringing on its patent for a component in elliptical machines, a product both companies manufacture.
After successfully defending itself, Octane sought $1.3 million in fees, but the trial court declined to award them, saying the case didn't meet the standard by which they'd be warranted.
The Federal Circuit later upheld this decision, citing the U.S. Patent Act and its own longstanding "test" for determining whether attorneys' fees should be awarded in a case stemming from alleged patent infringement.
The Patent Act states that fees can only be awarded in exceptional cases, and the Federal Circuit has set a high bar for securing them: the case filed against the prevailing party must be "objectively baseless" and filed in bad faith.
The question the high court has agreed to determine is whether the Federal Circuit erred when it held that the case filed against Octane was not "exceptional" enough to warrant the award of attorneys' fees in contravention of both the Patent Act's statutory intent and Supreme Court precedent.
In its request for certiorari, Octane argued that the Federal Circuit's test conflicts with the Supreme Court's 1994 decision in the copyright case Fogerty v. Fantasy, in which it held that "prevailing plaintiffs and prevailing defendants are to be treated alike."
Specifically, the justices agreed to settle the following question: "Does the Federal Circuit's promulgation of a rigid and exclusive two-part test for determining whether a case is 'exceptional' under 35 U.S.C. § 285 improperly appropriate a district court's discretionary authority to award attorney fees to prevailing accused infringers in contravention of statutory intent and this court's precedent, thereby raising the standard for accused infringers (but not patentees) to recoup fees and encouraging patent plaintiffs to bring spurious patent cases to cause competitive harm or coerce unwarranted settlements from defendants?"
Octane argues that the Federal Circuit's two-part test is "rigid and virtually insurmountable," while Icon Health & Fitness claims there was nothing exceptional about its lawsuit.