Last year, the U.S. Supreme Court issued a number of landmark decisions that can be argued as geared toward reforming patent litigation and, in particular, toward curbing questionable litigation strategies, typically associated with patent trolls. We wrote in April regarding the benefits of an accused infringer moving for an early dismissal under Federal Rule of Civil Procedure 12 based on the patent ineligibility guidelines set forth in the Supreme Court’s decision in Alice Corp. Pty. Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014). This article explores another deterrent against such litigation tactics: the enhanced prospect of fee-shifting arising from the Supreme Court’s decisions in Octane Fitness LLC v. Icon Health & Fitness, 134 S. Ct. 1749 (2014), and Highmark v. Allcare Health Management System, 134 S. Ct. 1744, 1749 (2014). A year of decisions following Octane demonstrates that courts have taken heed and are not hesitant to award fees.
For patent cases, 35 U.S.C. Section 285 provides a statutory basis for an award of attorney fees, but only when a case is deemed “exceptional.” Before Octane, district courts could only find a case “exceptional” when “there has been some material inappropriate conduct related to the matter in litigation, such as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Fed. R. Civ. P. 11, or like infractions,” according to Brooks Furniture Manufacturing v. Dutailier International, 393 F.3d 1378, 1381 (Fed.Cir. 2005).
