Make Your Opponent Pay Your Attorney Fees

October 9, 2015

In 2014 the Supreme Court handed down one of several critical patent decisions that have given defendants leverage against infringement claims. In Octane Fitness v. Icon Health & Fitness, the Court significantly altered the standard for shifting attorneys’ fees. Not only is the Octane decision a tool for recouping fees, it’s also a powerful settlement tool.

In Octane, the Supreme Court rejected the Federal Circuit’s rigid standard requiring, in the absence of litigation misconduct, clear and convincing evidence of both subjective bad faith and objective baselessness. The Court held that “[A]n ‘exceptional’ case is simply one that stands out from others with respect to the substantive strength of a party’s litigation position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated. District courts may determine whether a case is ‘exceptional’ in a case-by-case exercise of their discretion.”

The author suggests that once sued, counsel should assess all the allegations, including non-infringement or invalidity arguments, and if the case is unfair they should start building an appropriate Octane record.

He summarizes what that record should consist of. He recommends making sure outside counsel closely track overly aggressive conduct to show a pattern that was intended to be abusive, and reminding the district court that you are only asking that fees be awarded because the plaintiff brought a case that was too weak, not one that violated Rule 11.

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