SCOTUS Arguments on Patent Fees
The Supreme Court heard oral arguments on Wednesday in two cases that could make it easier for companies to defeat patent infringement lawsuits. In both cases, Octane Fitness v. Icon Health & Fitness and Highmark v. Allcare Health Management Systems, the Court will deal with determining the appropriate rules that govern fee awards in patent litigations. Octane deals with the substantive issue of awarding attorney’s fees in the first instance. Highmark, on the other hand, is focused on determining the appropriate standard of review the Federal Circuit should use in reviewing district court decisions.
The cases turn on the language of Section 285 of the Patent Act. This section grants courts the discretion to award reasonable attorney’s fees in patent infringement cases that are deemed exceptional. In Octane, the district court found for Octane in the dispute between two manufacturers of elliptical machines. However, when it came time to award attorney’s fees the court denied Octane’s motion on the grounds that the case was not exceptional under the statute. The Federal Circuit affirmed. Octane’s main argument is that the standard used by the Federal Circuit, requiring a showing of objective baselessness and subjective bad faith, is out of line and requires reversal.
Matters are more complicated for Highmark, who was awarded substantial fees by the district court against Allcare. If Octane’s arguments lead the day, the statute would be read to permit fees in basically every case. As such, Highmark has to argue for a narrow abuse of discretion standard. If on the other had Icon has the winning argument, the outcome of Highmark is far more likely to be a higher standard of de novo review.
Check out further coverage of the oral arguments here.
