Octane Fitness, LLC v. Icon Health
572 U.S. 545
| SCOTUS | 2014Background
- Section 285 of the Patent Act allows a district court to award reasonable attorney's fees in exceptional patent cases.
- Brooks Furniture Mfg., Inc. v. Dutailier Int'l, Inc. established a rigid two-category framework for exceptionality.
- ICON sued Octane for patent infringement related to an elliptical machine; the district court granted summary judgment of noninfringement for Octane and later denied fee-shifting under §285.
- The Federal Circuit affirmed the denial, maintaining Brooks Furniture's standard and the requirement of clear and convincing evidence for entitlement to fees.
- The Supreme Court granted certiorari to review whether Brooks Furniture's framework aligns with the text of §285 and its ordinary meaning.
- The Court reversed, holding the Brooks framework is too rigid and that “exceptional” should be judged by totality of circumstances, not a two-prong test.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Brooks Furniture framework aligns with §285 text | Octane argues framework misreads text and is too rigid. | ICON defends Brooks framework as consistent with precedent. | Brooks framework is not consistent with §285. |
| Definition of 'exceptional' under §285 | Exceptional should be case-specific via totality of circumstances. | Brooks provides a precise, restrictive standard. | Exceptional means uncommon or out of the ordinary; case-by-case, totality-of-circumstances approach. |
| Whether subjective bad faith and objective baselessness are required | Plaintiff contends either factor could support exceptionality. | Brooks requires both subjective bad faith and objective baselessness. | No dual requirement; a case can be exceptional under a flexible totality-of-circumstances test. |
| Whether 'clear and convincing' burden of proof applies | Plaintiff argues Brooks's standard of clear and convincing proof is appropriate. | §285 imposes no specific evidentiary burden. | Clear and convincing evidence is not required; preponderance of the evidence suffices. |
Key Cases Cited
- Brooks Furniture Mfg., Inc. v. Dutailier Int'l, Inc., 393 F.3d 1378 (Fed. Cir. 2005) (two-category rigid standard for exceptionality under §285)
- Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49 (Supreme Court 1993) (Noerr-Pennington antitrust 'sham' standard cited)
- Fogerty v. Fantasy, Inc., 510 U.S. 517 (Supreme Court 1994) (nonexclusive list of fee-shifting factors; discretionary inquiry)
- Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (Supreme Court 1975) (inherent power to shift fees; broadening fee-shifting considerations)
- Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (Supreme Court 1978) (avoid narrowing fee-shifting provisions to prevent deterrence)
- Kilopass Technology, Inc. v. Sidense Corp., 738 F.3d 1302 (Fed. Cir. 2013) (discusses subjective bad faith standard after Brooks)
- Noerr-Pennington doctrine, Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (Supreme Court 1961) (immunity for petitioning government; sham exception discussed via PRE)
- Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49 (Supreme Court 1993) (PRE standard imported into Brooks Furniture)
- iLOR, LLC v. Google, Inc., 631 F.3d 1372 (Fed. Cir. 2011) (recklessness and inference of bad faith; objective baselessness sufficient)
- Noxell Corp. v. Firehouse No. 1 Bar-B-Que Restaurant, 771 F.2d 526 (D.C. Cir. 1985) (flexible interpretation of 'exceptional' in Lanham Act context)