Octane Fitness v. Icon Health and Fitness

Whether the Federal Circuit's two-step test for determining that a case is "exceptional" for the purpose of awarding attorney's fees to a prevailing accused infringer is an appropriate interpretation of 35 U.S.C. § 285.

Respondent sued Petitioner for patent infringement, arguing that Petitioner’s elliptical exercise machine infringed upon patents owned by Respondent. After the district court granted Petitioner’s motion for summary judgment of non-infringement, Petitioner moved the court to find the case “exceptional” under 35 U.S.C. § 285 and award Petitioner attorney’s fees. The district court found that the case was not "exceptional" and denied Petitioner's motion.

The Court of Appeals for the Federal Circuit affirmed the judgment of the district court with respect to both the patent infringement claim and Petitioner’s motion for attorney’s fees.

The Supreme Court Granted Certiorari to decide whether the Federal Circuit's two-step test for determining that a case is "exceptional" for the purpose of awarding attorney's fees to a prevailing accused infringer is an appropriate interpretation of 35 U.S.C. § 285. On review, Petitioner challenges the Federal Circuit’s standard for awarding attorney’s fees to prevailing party. Petitioner argues that the current standard—which requires that an “exceptional” case must be both “objectively baseless” and “brought in bad faith”—is contrary to the intent of the statute. Moreover, Petitioner argues, the current standard requires a higher showing for prevailing accused infringer than it does prevailing patentees. In addition, Petitioner proposes that, instead of the current standard, courts should award attorney’s fees in cases where the losing party had an “objectively low likelihood of success.”