Judge Lucy Koh of the United States District Court for the Northern District of California asked this very question during a panel discussion before a packed room of patent litigators that included Chief Judge Randall Rader of the United States Court of Appeals for the Federal Circuit. The panel’s discussion was focused on the proper exceptional case standard for patent cases. As a district court judge, most of Judge Koh’s cases involve areas of law other than patent law. But given her recent experience at the center of the epic battle between Apple and Samsung, which no doubt takes much of her time away from the other cases on her docket, her question is understandable. Indeed, what makes patent cases so special, or, in the cases of Octane Fitness, LLC v. Icon Health & Fitness, Inc. and Highmark, Inc. v. Allcare Health Management System, so exceptional?
The United States Supreme Court on February 26, 2014 grappled with this question and other important questions during oral arguments in the Octane Fitness and Highmark cases. The question presented in Octane Fitness is what standard should district courts apply in finding a case “exceptional” under 35 U.S.C. § 285 before awarding “reasonable attorney fees to the prevailing party.” In Highmark, the Court considered the question of whether deference should be given to district courts when finding a patent case exceptional. These questions are special to patent infringement cases only, and do not apply to other areas of law.
Many patent practitioners believe that how the Supreme Court decides the Octane Fitness and Highmark cases will affect the number of patent infringement cases brought by so-called “patent trolls,” non-practicing entities (or “NPEs”), and patent assertion entities (or “PAEs”). Of course, no consensus exists among “patent experts” regarding the appropriate definitions of patent troll, NPE, and PAE. Yet these terms are all too casually used to describe and denigrate holders of valid patent rights—usually small inventors and entities that dare to assert their rights against the “superior manufacturing corporations” that make products and allegedly are the “true innovators” of technology.
Because of the irresponsible use of these terms, the lobbying efforts in Washington, D.C. to combat the perceived threat from patent trolls, NPEs, and PAEs, and the pressure the federal courts are experiencing to act before Congress passes its proposed anti-patent troll legislation, the United States patent system is at a crossroads. Unless responsible parties on both sides of the “v.” work together soon to resolve their differences, the United States patent system may be irrevocably ruined for everyone.