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Report: Spike in Patent Attorney Fee Awards Post-Octane

April 28, 2015 | Posted in : Defense Fees / Costs, Fee Award, Fee Data / Fee Analytics, Fee Entitlement / Recoverability, Fee Jurisprudence, Fee Request, Fee Scholarship, Fee Shifting, Fees as Sanctions, Prevailing Party Issues, Study / Report

A recent PatLit blog post by David Berry of Brooks Kushman PC, “Data Shows Spike in Patent Attorney Fee Motions and Awards After Octane,” reports on an increase in attorney fee requests and attorney fee awards in patent litigation since the landmark decision in Octane Fitness v. Icon Health & Fitness Inc.  The post reads:

Prior to last year’s Supreme Court decision in Octane Fitness LLC v. Icon Health & Fitness, Inc., 134 S. Ct. 1749 (2014) and Highmark, Inc. v. Allcare Health Mgmt. Sys., 134 S. Ct. 1744 (2014), district courts awarded attorney fees in patent cases only in extreme circumstances.  In Octane, however, the Court lowered the bar for fee awards.  Furthermore, in Highmark, the Court made it clear that district court judges have broad discretion in awarding fee for litigation misconduct.

The Octane Court focused on the plain meaning on 35 U.S.C. § 285, which simply states that, “The court in exceptional cases may award reasonable attorney fees to the prevailing party.”  The Court noted that, “This text is patently clear.  It imposes one and only one constraint on the district courts’ discretion to award attorney’s fees in patent litigation: The power is reserved for ‘exceptional’ cases.” 134 S. Ct. at 1755-56.  In turn, the Court held that an “exceptional” case within the statute is “simply one that stands out from the others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.  District courts may determine whether a case is ‘exceptional’ in the case-by-case exercise of other discretion, considering the totality of the circumstances.” Id. At 1756.

The combination of Octane and Highmark has had a significant effect on attorney fee awards in patent cases.  According to a recent report by the Federal Circuit Bar Association (FCBA) submitted to Congress earlier this year, motions for fees filed by accused infringers were granted 36 percent of the time following Octane, compared to only 13 percent of the time in the year prior to the decision.  In addition, Octane apparently has resulted in a sharp increase in the number of fee motions.  In the year prior to Octane, accused infringers filed an average of approximately four fee motions per month.  That rate increased over seven motions per month in the months following the decision.

For more on the FCBA report, read “A Comparison of Pre Octane and Post Octane District Court Decisions on Motions for Attorneys’ Fees Under Section 285” (pdf).