Octane Fitness, LLC v. ICON Health & Fitness, Inc.
134 S. Ct. 1749
| SCOTUS | 2014Background
- ICON sued Octane for patent infringement of U.S. Patent No. 6,019,710 (elliptical machine). The District Court granted summary judgment of noninfringement for Octane.
- Octane moved for attorney’s fees under 35 U.S.C. §285; the District Court denied fees under the Federal Circuit’s Brooks Furniture framework.
- The Federal Circuit affirmed the denial, applying Brooks Furniture’s two-category test (misconduct or both objectively baseless and subjectively in bad faith) and its clear-and-convincing proof rule.
- Octane sought certiorari arguing Brooks Furniture’s standard and evidentiary requirement were too rigid and not grounded in §285’s text.
- The Supreme Court reversed: it held §285 grants district courts flexible, case-by-case discretion to award fees in “exceptional” cases, rejected Brooks Furniture’s rigid categories and the clear-and-convincing burden, and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper standard for “exceptional” under §285 | Brooks Furniture is too restrictive; courts should apply flexible, totality-of-the-circumstances test | Brooks Furniture reflects settled Federal Circuit law requiring either misconduct or objectively baseless + subjective bad faith | Court held §285 requires a flexible, discretionary inquiry; “exceptional” means uncommon or not ordinary and may be shown by substantive weakness or unreasonable litigation conduct |
| Role of Professional Real Estate Investors (PRE) test | PRE’s dual requirement (objective baselessness + subjective bad faith) is inappropriate to import into §285 | PRE supports requiring both elements to protect petitioning rights and avoid chilling litigation | Court rejected importing PRE into §285; PRE addresses Noerr-Pennington antitrust context and is not rooted in §285 text |
| Whether fee entitlement must be proved by clear and convincing evidence | Fee entitlement requires only the ordinary civil standard (preponderance); clear-and-convincing is not in §285 | Brooks Furniture requires clear-and-convincing proof because of presumption that patent assertions are made in good faith | Court held clear-and-convincing is unjustified; §285 imposes no special evidentiary burden and ordinary civil standard applies |
| Whether District Court properly denied fees in this case | Octane argued ICON’s suit was objectively baseless or brought in bad faith and thus exceptional | ICON argued its infringement case was reasonable and not frivolous; evidence (e‑mails, no commercialization) insufficient to show bad faith | Court reversed on standard grounds and remanded for district court to reassess fee request under the correct, flexible §285 standard (did not itself decide entitlement) |
Key Cases Cited
- Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378 (Fed. Cir. 2005) (Federal Circuit’s prior two-category test for §285 entitlement)
- Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994) (copyright fee-shifting discretionary factors; totality-based inquiry)
- Professional Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49 (1993) (Noerr-Pennington “sham” standard: requires objective baselessness + bad faith)
- Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975) (inherent judicial authority to award fees for bad faith conduct)
- Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978) (refusing to construe fee statutes narrowly to avoid superfluity of statutory fee provisions)
- Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (1990) (evidentiary standards in fee-shifting contexts)
- iLOR, LLC v. Google, Inc., 631 F.3d 1372 (Fed. Cir. 2011) (Federal Circuit’s formulation of objective baselessness and subjective knowledge)
- Kilopass Tech., Inc. v. Sidense Corp., 738 F.3d 1302 (Fed. Cir. 2013) (post-certiorari Federal Circuit clarification regarding subjective component)