I. Introduction

The Federal Circuit's May 2026 decision in mCom IP, LLC v. City National Bank of Florida[1] is a quietly significant reaffirmation that the “exceptional case” doctrine of 35 U.S.C. § 285—even after Octane Fitness[2] replaced the prior two-pronged test with a discretionary, case-by-case inquiry—retains genuine substantive content. Writing for a unanimous panel of Judges Dyk, Mayer, and Taranto, Judge Taranto affirmed dismissal of the patentee's amended complaint while simultaneously reversing fee awards entered against both the patentee under § 285 and its counsel, Victoria Brieant, under 28 U.S.C. § 1927. The opinion functions as a corrective gloss on two recurring district-court missteps in post-Octane practice: treating any invalidity ruling as quasi-automatic proof of “exceptionality,” and conflating an attorney's failure to investigate with the bad-faith conduct that § 1927 actually demands. Read alongside the companion mCom v. HSBC opinion issued the same day,[3] mCom draws a workable line between cases that “stand out” and cases that merely lose.

II. Background

The asserted patent—U.S. Patent No. 8,862,508—claims a “unified electronic banking system” capable of coordinating disparate “touch points” such as ATMs, kiosks, websites, and mobile devices. In a 2023 inter partes review brought by Unified Patents, the Patent Trial and Appeal Board canceled all but four of the patent's claims for obviousness.[4] mCom thereafter sued City National Bank of Florida on the surviving claims (2, 8, 14, and 17). After mCom's initial complaint was struck as a “shotgun pleading,” the Southern District of Florida dismissed the amended complaint with prejudice, ruling—without separately reaching the bank's § 101 challenge—that the surviving claims “do not add patentable substance” to those held unpatentable in the IPR and that infringement had not been plausibly pleaded.[5] The court then awarded $33,986.43 against mCom under § 285 and $50,619.59 personally against attorney Brieant under § 1927, treating the two motions as essentially coextensive.[6]

III. Analysis

A. The § 285 Reversal: “Substantive Strength,” Not “Substantive Correctness.”

Of greatest doctrinal interest is the panel's careful re-articulation of what makes a case “exceptional.” Octane Fitness famously held that an “exceptional” case is “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.”[7] Since then, district courts have at times collapsed the two prongs, reasoning that any losing patentee whose claim was dispositively dismissed has, by definition, advanced a position that did not “stand out” in substantive strength. The mCom panel rejects that elision in unusually direct terms, quoting SFA Systems, LLC v. Newegg Inc. for the proposition that “it is the ‘substantive strength of the party's litigating position' that is relevant … not the correctness … of that position.”[8] Borrowing from Munchkin, Inc. v. Luv n' Care, Ltd., the court emphasized that the district court “never adequately explain[ed] why [the patentee's] validity position was unreasonable.”[9]

Three features of the opinion warrant the patent bar's attention. First, the panel treats the statutory presumption of validity under § 282 as more than a default tiebreaker; it functions as a baseline against which a § 285 movant must affirmatively demonstrate that the patentee could not reasonably have litigated to maintain its claim.[10] Second, the panel's reliance on Kroy IP Holdings, LLC v. Groupon, Inc.[11] and ParkerVision, Inc. v. Qualcomm Inc.[12] reinforces the asymmetry between an IPR's preponderance-of-the-evidence standard and the clear-and-convincing burden in district court—meaning that PTAB cancellation of related claims is not automatically dispositive of obviousness for uncanceled claims, and a patentee's belief otherwise is not “exceptionally weak.” Third, the panel methodically dismantles three subsidiary rationales relied upon below: the prior “shotgun pleading” mishap (a “purely formal” defect),[13] the unproven NCR licensure defense (which appellee conceded at oral argument remained “unadjudicated”),[14] and “oblique references” to mCom's “previous litigation” unsupported by any record evidence of nuisance-value settlements.[15] This methodical demolition signals that conclusory invocations of “serial filer” status will no longer carry water absent evidentiary substantiation.

The practical consequence for the patent-litigation defense bar is meaningful. Fees motions following IPR-adjacent dismissals have become a near-reflexive next step in patent cases since Octane Fitness was decided in 2014, and district courts have shown a marked willingness to grant them where the operative claims have been wounded in collateral proceedings. mCom recalibrates that calculus. The would-be § 285 movant must now build a record-grounded narrative addressing four discrete elements: (i) why the surviving claims, viewed under the patentee's burden of persuasion in district court, were not merely invalid but so obviously invalid that no reasonable patentee could have pressed them; (ii) why any contemporaneous infringement theory was so untenable that maintaining suit was unreasonable; (iii) why an asserted licensure or other affirmative defense was sufficiently established that a diligent patentee would have abandoned the case; and (iv) what specific, documented features of the patentee's broader litigation history support an inference of abusive intent. mCom makes plain that conclusory averments at any of these steps will not do, even when the merits ruling has gone the movant's way.

B. The § 1927 Reversal: Lack of Diligence Is Not “Needless Obstruction.”

The panel's § 1927 analysis is, if anything, more consequential for the patent bar's attorneys. Applying Eleventh Circuit law, the court held that the district court had erred by sanctioning Ms. Brieant on a theory of insufficient investigative diligence rather than on findings of frivolousness or “needless[] obstruct[ion].”[16] Citing Amlong & Amlong, P.A. v. Denny's, Inc., the court reaffirmed that § 1927 reaches only “egregious” and “objectively reckless” attorney conduct “tantamount to bad faith.”[17] Because the underlying case was not frivolous—a conclusion compelled by the § 285 analysis—Ms. Brieant could not have “needlessly obstructed” non-frivolous litigation by carrying it through a Rule 12(b)(6) ruling. The takeaway for plaintiff-side patent counsel is unmistakable: a § 1927 sanction cannot be back-built from a post hoc judgment that an earlier dismissal showed counsel “should have known better.” The Federal Circuit has thus aligned § 1927 review with the PersonalWeb and Bayer CropScience line: the inquiry runs prospectively from the information reasonably available to counsel, not retrospectively from the merits outcome.[18]

C. Doctrinal Synthesis and Open Questions.

Read structurally, mCom is the latest installment in the Federal Circuit's post-Octane effort to calibrate § 285 doctrine. Highmark granted district courts deferential review.[19] SFA Systems and Bayer CropScience policed the outer bounds of that discretion. Munchkin required reasoned explanation. mCom adds an emphatically articulated rule that mere invalidity is not stand-out weakness; that an unadjudicated affirmative defense cannot retroactively prove pre-suit unreasonableness; and that aggregated “litigation history” must be evidentially substantiated, not rhetorically invoked. Open questions remain—most notably, how a fee movant should marshal a “serial filer” theory consistent with mCom's evidentiary demand, and whether the panel's reasoning extends to post-judgment fee motions following bench trials, where the record is presumptively richer. Likewise, by declining to remand for further proceedings on the § 285 issue, the court signaled—consistent with the Supreme Court's admonition in Fox v. Vice that fee determinations not become a “second major litigation”[20]—a meaningful limit on second bites at the exceptionality apple.

IV. Conclusion

mCom IP, LLC v. City National Bank of Florida is, in the end, a quiet but instructive decision. Its reversal restores discipline to the § 285 inquiry that Octane Fitness envisioned: discretion exercised case-by-case, but anchored in substantive strength rather than substantive outcome, and explained with reasoning a reviewing court can test. The companion treatment of § 1927 shields counsel from sanction by hindsight. Together, the holdings draw a workable line between losing and litigating-without-merit—a distinction that, as the patent bar has long understood, is precisely the difference between a hard case and an exceptional one.

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.