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Octane Fitness, LLC v. ICON Health & Fitness, Inc.

Supreme Court of the United States

February 26, 2014, Argued; April 29, 2014, Decided

No. 12-1184

Opinion

 [1339]  JUSTICE Sotomayor delivered the opinion of the Court. 1

Section 285 of the Patent Act authorizes a district court to award attorney’s fees in patent litigation. It provides, in its entirety, that “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U. S. C. § 285. In Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378 (2005), the United States Court of Appeals for the Federal Circuit held that “[a] case may be deemed exceptional” under § 285 only in two limited circumstances: “when there has been some material inappropriate conduct,” or when the litigation is both “brought in subjective bad faith” and “objectively baseless.” Id., at 1381. The question [***822]  before us is whether the Brooks Furniture framework [**1753]  is consistent with the statutory text. We hold that it is not.

Prior to 1946, the Patent Act did not authorize the awarding of attorney’s fees to the prevailing party in patent litigation. Rather, the “American Rule” governed: “‘[E]ach litigant pa[id] his own attorney’s fees, win or lose . . . .’” Marx v. General Revenue Corp., 568 U.S. 371, 382, 133 S. Ct. 1166, 1175, 185 L. Ed. 2d 242, 253 (2013). In 1946, Congress amended the Patent Act to add a discretionary fee-shifting provision, then codified in § 70, which stated that a court “may in its discretion award reasonable attorney’s fees to the prevailing party upon the entry of judgment in any patent case.” 35 U. S. C. § 70 (1946 ed.). 2

Courts did not award fees under § 70 as a matter of course. They viewed the award of fees not “as a penalty for failure to win a patent infringement suit,” but as appropriate “only in extraordinary circumstances.” Park-In-Theatres, Inc. v.  [*549]  Perkins, 190 F.2d 137, 142 (CA9 1951). The provision enabled them to address “unfairness or bad faith in the conduct of the losing party, or some other equitable consideration of similar force,” which made a case so unusual as to warrant fee shifting. Ibid.; see also Pennsylvania Crusher Co. v. Bethlehem Steel Co., 193 F.2d 445, 451 (CA3 1951) (listing as “adequate justification[s]” for fee awards “fraud practiced on the Patent Office or vexatious or unjustified litigation”).

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572 U.S. 545 *; 134 S. Ct. 1749 **; 188 L. Ed. 2d 816 ***; 2014 U.S. LEXIS 3107 ****; 110 U.S.P.Q.2D (BNA) 1337; 82 U.S.L.W. 4330; 24 Fla. L. Weekly Fed. S 726; 2014 WL 1672251

OCTANE FITNESS, LLC, Petitioner v. ICON HEALTH & FITNESS, INC.

Notice: The LEXIS pagination of this document is subject to change pending release of the final published version.

Subsequent History: On remand at Icon Health & Fitness, Inc. v. Octane Fitness, LLC, 570 Fed. Appx. 936, 2014 U.S. App. LEXIS 13288 (Fed. Cir., July 14, 2014)

Prior History:  [****1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

Icon Health & Fitness, Inc. v. Octane Fitness, LLC, 496 Fed. Appx. 57, 2012 U.S. App. LEXIS 22096 (Fed. Cir., 2012)

Disposition: Reversed and remanded.

CORE TERMS

patent, bad faith, district court, baseless, exceptional case, infringement, misconduct, prevailing party, circumstances, fee-shifting, vexatious, immunity, machines, cases

Patent Law, Damages, Collateral Assessments, Attorney Fees, Governments, Legislation, Interpretation, Trademark Law, Types of Damages, Costs & Attorney Fees, Civil Procedure, Judicial Officers, Judges, Discretionary Powers, Copyright Law, Antitrust & Trade Law, Exemptions & Immunities, Noerr-Pennington Doctrine, Scope, Constitutional Law, Bill of Rights, Fundamental Freedoms, Freedom to Petition, Sham Exception, Attorney Fees & Expenses, Basis of Recovery, American Rule, Bad Faith Awards, Evidence, Burdens of Proof, Clear & Convincing Proof, Preponderance of Evidence