How much discretion should a district court have in determining whether a case is “exceptional,” thereby entitling the prevailing accused infringer to an award of attorney fees?
Icon Health & Fitness sued Octane Health, alleging patent infringement over an elliptical exercise machine. After Octane won in federal district court on summary judgment, it moved for an award of attorney’s fees, arguing that the suit was an “exceptional case” under 35 U.S.C § 285. The district court denied the motion, and the Federal Circuit affirmed. In this case, the Supreme Court may determine the scope of a district court’s discretion in granting fees under § 285. Although affirming the Federal Circuit’s standard would prevent attorney fees in most instances, it would follow the usual American rule that each party generally bears its own costs of litigation. However, if the Supreme Court decides to broaden the lower courts’ discretion, this may limit frivolous or predatory patent suits. Icon argues that the Supreme Court should affirm the Federal Circuit’s two-part test because it comports with the legislative intent behind § 285 and prior judicial interpretation of that provision. Octane argues that the Supreme Court should overturn the Federal Circuit’s test because the test is not party neutral and violates principles of statutory construction.
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?
This case began as a patent infringement lawsuit filed by Respondent Icon Health & Fitness, Inc. (“Icon”). See Icon Health & Fitness, Inc. v. Octane Fitness, LLC, No. 09-319, 2011 WL 2457914, at *1 (D. Minn. June 17, 2011).
- Dennis Crouch, Supreme Court’s New Patent Cases, Patently-O, Oct. 1, 2013.
- Peter Strand, Taking Exception to “Exceptional Case”? Supreme Court Scrutinizes Rules, IpQ, Oct. 2013.
- Greg Stohr, Patent-Suit Abuse Targeted as Supreme Court Accepts Case, Bloomberg, Oct. 1, 2013.