Octane Fitness v. Icon Health and Fitness

Court:

  • Case Number: 12-1184

Summary: The issue in this case is: when is a case “exceptional” 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 Supreme Court issued an opinion on April 29, 2014, reversing the Federal Circuit, and holding that “an ‘exceptional’ case is simply one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.”