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U.S. Supreme Court to Review Two Cases Based on Proper Standard to Award Fees to Prevailing Defendant

Highmark v. Allcare Health Management Systems, Case No. 12-1163

Octane Fitness v. Icon Health & Fitness, Case No. 12-1184

In the Highmark case, Allcare brought a counterclaim for patent infringement.  The trial court eventually granted summary judgment in favor of Highmark, and determined that the case was exceptional and awarded nearly $5M in fees and costs.  The Federal Circuit affirmed for one claim as it determined that Allcare’s position was “objectively unreasonable,” but reversed with regards to a different claim, and remanded for a determination as to the proper award of fees for just the one claim.  The question presented on certiorari is “whether a district court’s award of fees based on a determination that a claim is objectively baseless is entitled to deference?”

In the Octane case, Icon had alleged that Octane infringed its patent.  The District Court determined that there was no infringement, and refused to award fees.  Octane appealed the District Court’s determination that the case was not exceptional, and, in particular, argued that the standard for a prevailing defendant should be lowered to allow a collection of fees where the plaintiff’s assertions were “objectively unreasonable.”  The Federal Circuit affirmed, and in particular determined that it would not revisit the established standard for determining whether a case is exceptional.

Octane’s petition for certiorari asks the court to decide “does the Federal Circuit’s promulgation of a rigid and exclusive two-part test for determining whether a case is ‘exceptional’ under 35 U.S.C. 285 improperly appropriate a district court’s discretionary authority to award attorney fees to prevailing accused infringers in contravention of statutory intent and this Court’s precedent, thereby raising the standard for accused infringers (but not patentees) to recoup fees and encouraging patent plaintiffs to bring spurious patent cases to cause competitive harm or coerce unwarranted settlements from defendants?”