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Is Octane Fitness a Defining Moment?

Posted by William P. Ramey III | May 01, 2014 | 0 Comments

On Tuesday, the Supreme Court in Octane Fitness, LLC  v. Icon Health and Fitness, Inc.,  reversed the Federal Circuit as to the standard for awarding attorneys' fees in patent cases and defined what makes an exceptional case.  The Court held “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.

It is unlikely this change will result in a watershed of awards of attorneys fees as the case must still be exceptional.  Aside from the presently pending House legislation, US courts have been reluctant to find cases exceptional and thereby award attorneys' fees.  The Supreme Court's decision simply refocused patent cases on the totality of the circumstances and gave broader discretion to the District Court.

That same day, in Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., the Supreme Court  held “that an appellate court should apply an abuse-of-discretion standard in reviewing all aspects of a district court's attorneys' fee decision, i.e., its § 285 determination.  Therefore, district court's will be judged on an application of the facts to the law and therefore, except in cases where the litigant was unreasonable in its litigation conduct, the award of attorneys' fees is still unlikely.

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William P. Ramey III

Managing Partner; Office: Houston


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