Summary: The issue in this case is: how much deference should an appeals court give to the trial court with respect to whether a case is “objectively unreasonable” within the meaning of the fee-shifting provision of the patent statute?
The Federal Circuit has set the standard extremely high: a winning defendant must prove by clear and convincing evidence that the patent owner’s claims were objectively baseless (meaning that no reasonable person would think they would succeed) and brought in subjective bad faith (meaning that the patent owner knows that claims are baseless). In practice, it’s rare that a defendant can meet this standard, and because the statute only awards attorneys’ fees but not expenses, it’s common for defendants to just walk away without asking for fees.
The Federal Circuit gives no deference at all to the trial court, instead deciding the issue de novo (i.e., from scratch).
On April 29, 2014, the Supreme Court issued an opinion holding that the trial court’s decision is entitled to deference, and vacating the Federal Circuit’s decision.