If you own a patent and you enforce it, sooner or later someone will call your case a “nuisance suit” and your settlement demand “nuisance value.” The phrase is meant to do work that the law will not do on its own: to convert a perfectly legitimate enforcement decision into evidence of bad faith, and to turn an ordinary, rational settlement number into grounds for shifting your opponent's fees onto you. It is rhetoric dressed up as doctrine. And when it is actually tested on appeal, it tends to fall apart.

It fell apart recently in a case I argued. In mCom IP, LLC v. City National Bank of Florida, No. 2024-2089 (Fed. Cir. May 15, 2026), the Federal Circuit reversed both a 35 U.S.C. § 285 “exceptional case” fee award entered against the patent owner and a 28 U.S.C. § 1927 sanction entered against its counsel. One of the defendant's central themes below had been that the patent owner filed suits to extract “nuisance-value” settlements. The Federal Circuit's answer was direct: there was “no record support for the asserted premise about other mCom lawsuits.” mCom, slip op. at 17. That single sentence is the whole problem with “nuisance value” rhetoric, captured by the court that supervises patent law.

This article makes the case that courts should retire the term “nuisance value” entirely, and that the only coherent line is the sham-litigation line. For patent owners, the practical takeaway is simpler: a low number is not a confession, hard bargaining is not bad faith, and a fee motion built on the economics of your settlement posture — rather than on proof that your case was baseless — is vulnerable. You just have to be willing to make the court do the analysis the law actually requires.

I. “Nuisance value” is doctrinally empty and constitutionally dangerous

The phrase is not a neutral descriptor. It smuggles a legal conclusion — that a lawsuit is illegitimate or abusive — into what should be a disciplined merits analysis. Once a court calls an offer “nuisance value,” it has already tilted the field.

Under the Noerr-Pennington doctrine, as applied in Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49 (1993) (“PRE”), and brought into patent law in Globetrotter Software, Inc. v. Elan Computer Group, Inc., 362 F.3d 1367 (Fed. Cir. 2004), there is a clear constitutional rule. Litigation and its attendant communications are immune from sanctions and tort liability unless the case is a sham, meaning it is both:

1.     Subjectively baseless — the suit is brought to use the governmental process itself as a weapon, rather than to obtain a favorable outcome; and

2.     Objectively baseless — no reasonable litigant could realistically expect success on the merits.

Globetrotter squarely treats patent enforcement letters, threats of suit, and efforts to compromise the dispute as acts reasonably and normally attendant upon effective litigation — protected unless the underlying claim is a sham.

Once that is understood, the category “nuisance-value settlement offer” dissolves. There are only two possibilities. If the case is a sham, then all enforcement conduct — including low, cost-of-defense, “pay us to go away” settlements — may be used as evidence of bad faith and can support fee-shifting. If the case is not a sham, then the enforcement and settlement communications are protected petitioning, and the amount demanded — whether $1,000, $50,000, or “less than the cost of defense” — has no independent legal significance. It is simply bargaining.

The label “nuisance value” pretends to occupy some middle ground: a supposedly distinct class of “too-cheap” settlements that can be punished even when the litigation is concededly non-sham. Noerr-Pennington and Globetrotter reject that middle ground. Courts are not permitted to downgrade constitutional immunity because they disapprove of a plaintiff's bargaining strategy.

II. Octane Fitness did not authorize courts to punish protected settlement bargaining

Some district courts, and the Federal Circuit's nonprecedential decision in Ortiz v. Vizio, have treated “nuisance value” settlements as a freestanding factor in the § 285 “exceptional case” analysis, as if Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014), opened the door. It did not.

Octane did one thing: it replaced a rigid, clear-and-convincing standard with a flexible totality-of-the-circumstances test, defining an exceptional case as “one that stands out from others with respect to the substantive strength of a party's litigating position . . . or the unreasonable manner in which the case was litigated.” 572 U.S. at 554. It did not purport to alter the constitutional limits on what conduct the government may penalize. When the conduct being scrutinized is petitioning — filing suits and negotiating settlements — Octane must be read in harmony with PRE and Globetrotter, not as an end-run around them. The threshold question remains whether the litigation is sham. Only after that predicate is met may a court draw adverse inferences from settlement posture.

III. Blake v. Robertson shows why “small money” is not “abuse”

The Supreme Court settled, well over a century ago, that the economic size of a patent claim has nothing to do with its legitimacy. In Blake v. Robertson, 94 U.S. 728 (1876), the patentee prevailed on validity and infringement but ultimately recovered only nominal damages because of proof problems in apportioning profits. The Court did not hint that the case was improper, vexatious, or “nuisance-level.” The right to enforce a patent did not depend on the prospect of a large monetary award.

Apply that lesson to today's rhetoric. If a patent suit that can yield only nominal damages is still a proper exercise of the right to petition, then a plaintiff's willingness to settle for a small number — or a number below a defendant's cost of defense — cannot, absent sham litigation, imply bad faith. Low-dollar settlements may simply reflect modest provable damages, serious litigation risk, or the same apportionment and proof problems that existed in Blake. When a court calls a cost-of-defense offer “nuisance value,” it implicitly announces a de facto economic floor for legitimate patent enforcement: “real” cases seek more; “nuisance” cases settle cheap. That is flatly at odds with Blake and with the structure of patent rights, which draws no distinction between high-value and low-value infringements.

IV. Cost-of-defense settlements are ordinary, rational economics — not a separate wrong

Modern patent discourse uses “nuisance” as if cost-of-defense settlements were unique to “trolls” or abusive campaigns. That is simply false. In every kind of litigation, rational actors compare the expected value of a judgment (discounted by likelihood of success), the expected cost to reach that judgment, and the time, risk, and opportunity cost of getting there. From that comparison arises a bargaining range. A defendant that settles for $150,000 rather than spend $900,000 on defense has not been “victimized by nuisance”; it has made a straightforward business decision — and one the plaintiff cannot control, because a patent owner rarely dictates what its opponent chooses to spend.

Courts that treat “nuisance value” as probative of abuse without a sham finding commit two serious errors. First, they punish routine bargaining: if any offer near or below cost of defense can later be weaponized as “evidence of exceptionality,” rational plaintiffs will stop making early, discounted proposals — producing fewer settlements and more litigation cost. Second, they erase the line between hard bargaining and bad faith. A tough opening demand is not bad faith. A discounted settlement proposal is not bad faith. Bad faith arises from pursuing claims that are both subjectively and objectively baseless.

V. The actual “nuisance” precedents do not support using the label in non-sham cases

The decisions most often cited for “nuisance value” language — Eon-Net LP v. Flagstar Bancorp, 653 F.3d 1314 (Fed. Cir. 2011); Blackbird Tech LLC v. Health In Motion LLC, 944 F.3d 910 (Fed. Cir. 2019); and Lumen View Technology LLC v. Findthebest.com, Inc., 811 F.3d 479 (Fed. Cir. 2016) — do not create a free-standing “nuisance settlement” doctrine. They all fit within the sham-litigation framework.

Eon-Net involved implausibly broad claim constructions, discovery abuses, and a pattern of suits leveraged solely to extract quick, cheap settlements; the “nuisance value” description was a symptom of a case that was already substantively and procedurally abusive. Blackbird featured weak claims, shifting theories, and settlement demands well below the anticipated cost of defense in the face of clear invalidity and non-infringement evidence; the low settlements corroborated bad faith already established on the merits. Lumen View rested on an objectively baseless theory and a predatory strategy aimed at extracting quick payouts; the reference to “nuisance settlement” identified motive — subjective baselessness — not low settlements as an independent ground for sanctions.

In each case, the wrong was sham-like litigation; “nuisance” language merely described how that wrong manifested in negotiations. None holds that a below-cost-of-defense offer, in an otherwise colorable case, is itself probative of exceptionality. Volume and low dollars are not the problem. Sham litigation is.

VI. Ortiz shows why the label is so dangerous

Ortiz v. Vizio illustrates how casual use of “nuisance value” invites doctrinal drift. The district court found exceptionality based on weaknesses in the damages theory, discovery lapses, a pattern of filings and dismissals, and a settlement demand below the cost of defense, which it labeled “nuisance value.” The Federal Circuit affirmed and approved that characterization as part of the totality of the circumstances — even though there was no finding that the claim was both subjectively and objectively baseless under PRE and Globetrotter. Ortiz took language from Eon-Net, Blackbird, and Lumen View — cases rooted in sham-like abuse — and divorced it from the sham requirement, while never engaging with Globetrotter or Noerr-Pennington at all. The result is a fact-specific, nonprecedential opinion that nonetheless encourages trial courts to treat any below-cost-of-defense offer as “nuisance value” and to weigh it against the plaintiff. The right response is not to expand Ortiz; it is to stop invoking “nuisance value” and force the analysis back to the only question that matters: sham or not.

VII. mCom v. City National: what happens when the rhetoric is actually tested

If Ortiz shows the danger, mCom IP, LLC v. City National Bank of Florida, No. 2024-2089 (Fed. Cir. May 15, 2026), shows the cure — and it is the case patent owners should know about, because it is what defeating a “nuisance value” fee attack looks like in practice.

The setup was about as unfavorable to the patent owner as it gets. After an inter partes review canceled most claims of the patent-in-suit, mCom sued City National on the four surviving claims. The district court dismissed the complaint with prejudice — holding the asserted claims invalid for obviousness on the same grounds as the IPR and finding infringement inadequately pleaded — and then awarded the defendant its fees: roughly $33,986 against the patent owner under § 285 and roughly $50,620 against its counsel under § 1927. mCom, slip op. at 7–9. Among the defendant's lead themes was that mCom had filed many suits without taking any to trial, “implying an improper goal of ‘quickly settling . . . for nuisance value.'” Id. at 8.

The Federal Circuit affirmed the dismissal — and then reversed the fee award and the sanction outright. The reasoning is a clinic in the difference between rhetoric and proof:

•        Mere invalidity is not “exceptional.” “[M]ere invalidity is not legally sufficient to find a case exceptional.” Id. at 14. What matters is the substantive strength of the litigating position, “not the correctness . . . of that position.” Id. (quoting SFA Systems, LLC v. Newegg Inc., 793 F.3d 1344, 1348 (Fed. Cir. 2015)). The surviving claims enjoyed the statutory presumption of validity and had not even been challenged in the IPR, and a district-court obviousness challenge carries a higher burden than an IPR — so the patent owner could reasonably maintain its position. Id. at 14–15.

•        Procedural missteps and “lack of merit” are not enough. A stricken “shotgun” pleading was “purely formal,” and a dismissal for lack of merit “is not legally sufficient for § 285 purposes.” Id. at 15.

•        A licensure theory needs proof a license existed. The defendant conceded at oral argument that whether it was even covered by the relevant license was “unadjudicated,” so the asserted licensure defense could not support the award. Id. at 15–16.

•        And the “nuisance value” theme had nothing behind it. “[C]ity National has identified no record support for the asserted premise about other mCom lawsuits.” Id. at 17. The fee motion “did not furnish any information about the values of those alleged settlements, or even which such cases involved the [patent-in-suit].” Id. As the court put it, “the premise for any reliance on this kind of litigation activity is evidence establishing its character, which is missing here.” Id. The court declined to remand for the defendant to go build that record. Id. (citing Fox v. Vice, 563 U.S. 826, 838 (2011)).

The § 1927 sanction against counsel fell with it: absent any finding that the case was frivolous, counsel's decision to litigate a non-frivolous suit to a ruling on the motion to dismiss was not “needless obstruction.” Id. at 17–18.

Note what mCom did and did not do. It did not reach the constitutional petitioning argument — it never cited Noerr-Pennington — and decided the case on § 285 sufficiency grounds. But that makes the result more useful to patent owners, not less: even without invoking the constitutional floor, the Federal Circuit demanded actual evidence before “nuisance value” could mean anything. A defendant cannot gesture at a plaintiff's litigation history and a low number and call it abuse. It must prove the character of that conduct. Most “nuisance value” arguments — including the one in mCom — cannot.

VIII. A clear, administrable rule: sham vs. non-sham

Courts do not need, and should not construct, a special “nuisance value” doctrine. The existing framework already supplies a clean structure. Ask whether the patentee knew or should have known the claim was baseless and pursued it to use the process as leverage (subjective baselessness), and whether a reasonable litigant could realistically expect success (objective baselessness). If both are shown, the case is a sham, and low or cost-of-defense settlements may corroborate improper purpose. If either is missing, the case is non-sham, and settlement offers — whatever the amount — are protected, legally neutral bargaining. Within that framework, “nuisance value” does no analytical work. It adds only pejorative rhetoric: at best a distraction, at worst a backdoor to penalize protected conduct in non-sham cases.

The principled path forward is simple. Stop using the term “nuisance value” in opinions and orders. Insist on a sham-litigation finding before allowing settlement conduct to influence fee-shifting. And analyze patent enforcement on the merits and the manner of litigation — not on a visceral reaction to the dollar figure on the table.

What this means if you own a patent

If you enforce your patents, you should take three things from this.

First, a low or cost-of-defense settlement offer is not an admission of weakness, and you should not let anyone treat it as one. It is ordinary risk-adjusted economics, the same calculus every litigant makes.

Second, fee-shifting motions built on “nuisance value” rhetoric are beatable — frequently. Octane gave district courts discretion, but discretion is not license, and the Federal Circuit continues to require reasons and record support. A motion that leans on the size of your demand, your filing history, or “lack of merit” without proving baselessness is attacking the wrong target.

Third, the outcome turns on who frames the analysis. The patent owner in mCom walked in having lost the merits, with a fee award and a sanction against its lawyer already entered — and walked out with both reversed, because the right questions got put to the court. That is the difference experienced enforcement counsel makes: not pretending a hard case is easy, but refusing to let a defendant substitute a slur for the standard.

If you are weighing whether to assert your patents — or defending a fee motion that calls your legitimate enforcement “nuisance value” — that is a conversation worth having before the rhetoric hardens into a record.

The author argued and won the reversal of the § 285 and § 1927 awards in mCom IP, LLC v. City National Bank of Florida, No. 2024-2089 (Fed. Cir. May 15, 2026).

Ramey LLP is a Texas-based intellectual property law firm dedicated to representing small patent owners, startups, and independent inventors in disputes against larger corporations.