(Note: the subject matter of this post is a bit off-topic for this blog, but with all of the attention being paid to non-meritorious patent lawsuits and potential solutions, we thought this warranted mentioning.)

Patent litigation, like most litigation in this country, is generally controlled by the “American Rule” — the general rule that each party pays its own litigation-related costs and attorneys’ fees.  This stands in contrast to the rules in other countries such as England, where the losing party generally pays the other’s attorneys’ fees.  There are exceptions to the American Rule in various jurisdictions and types of litigations, including the patent-related provision in 35 U.S.C. § 285.

Section 285 provides that “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.”  However, it’s well-known that courts rarely award fees under Section 285 except in the most egregious circumstances (in fact, we recently posted a patent alert about a denial of fees).  Under current Federal Circuit precedent, cases are only deemed exceptional if there has been litigation misconduct or fraud in securing the patent, or if an infringer’s claim is both objectively baseless and brought in subjective bad faith.  See Highmark, Inc. v. Allcare Health Mgmt. Sys., Inc., 687 F.3d 1300, 1308 (Fed. Cir. 2012).

In a recent petition for certiorari, Octane Fitness LLC has asked the U.S. Supreme Court to overturn this precedent and make it easier for prevailing patent infringement defendants to recover attorneys’ fees from infringement plaintiffs.
Continue Reading Is Section 285’s “exceptional case” requirement too exceptionally hard to satisfy?

Today, March 25, 2013, in Checkpoint Systems, Inc. v. All-Tag Security S.A., No. 2012-1085, the Federal Circuit (Newman, Lourie, and Schall) reversed both the district court’s award of $6.6 million in attorneys’ fees and the determination of an “exceptional case” under Section 285 of the Patent Act.  The awarding of attorneys’ fees has received

ShieldThere’s been much ado in the patent community over the past week over the re-introduction of H.R. 845, the Saving High-Tech Innovators from Egregious Legal Disputes Act of 2013 — more commonly known as the SHIELD Act.  This legislation, co-sponsored by Rep. Peter DeFazio (D-OR) and Rep. Jason Chaffetz (R-UT), seeks to “protect American tech companies from frivolous patent lawsuits that cost jobs and resources” by  implementing a “loser pays” fee-shifting paradigm for patent infringement cases brought by certain types of non-practicing entities.  (A prior version introduced last year, H.R. 6245, was much more limited in its implementation of fee-shifting.)

While this is a bit off-topic for our blog, we thought this proposed legislation is sufficiently important to our readers that we’d do a brief post on it — especially given the penchant by some NPEs to assert standard-essential patents.  The legislation (at least as it’s currently drafted) has raised a lot of questions and issues and has generated a lot of commentary (both pro and con) from the business and legal communities.  After the jump, we’ll run through a quick summary of the provisions of the SHIELD Act, some first impressions about questions it may raise, and provide some links to a variety of others’ views on the proposed law.Continue Reading The new (and improved?) SHIELD Act