January 11, 2016 Articles

Strategies for Preventing an Award of Attorney Fees

Minimize the risk of section 285 sanctions

By Kristopher L. Reed and Samantha Picans

Since the Supreme Court's decisions in Octane Fitness and Highmark in the spring of 2014, there has been a significant increase in the number of requests for attorney fees in patent cases. As a result, nonprevailing parties today are highly likely to face such a request. This article discusses best practices for mitigating and opposing a fee request under section 285, including preventative strategies, strategies for drafting responses, and weaknesses to look for in billing records.

The Legal Standard for Sanctions under Section 285

In Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 (2014), the Supreme Court rejected the Federal Circuit's "overly rigid" standard for determining whether a case is "exceptional" under 35 U.S.C. ยง 285. Instead, the Court ruled "that an 'exceptional' case is simply one that stands out from 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." Octane Fitness, 134 S. Ct. at 1756. Nonexclusive factors that a district court may consider include "frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence." Id. at 1756 n.6. Whether a case is exceptional is a discretionary determination, analyzed by review of the totality of the circumstances on a case-by-case basis. Id. at 1756. The moving party's burden of proof is a preponderance of the evidence, and the district court's ruling is reviewed on appeal for an abuse of discretion. Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S. Ct. 1744, 1748 (2014).

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