Supreme Court Dramatically Changes Standard For Fee Shifting In Patent Cases

In the much anticipated decision of Octane Fitness v. Icon Health & Fitness, the United States Supreme Court reversed the Federal Circuit's two-part test for determining whether a case is exceptional under Section 285 of the Patent Act, which authorizes district courts to award attorneys' fees to prevailing parties in "exceptional cases." Under previous precedent, the Federal Circuit defined a case to be "exceptional" as one that involves either "material inappropriate misconduct," or is both "objectively baseless" and brought in "subjective bad faith." Moreover, parties were required to make this showing by "clear and convincing evidence" which would be reviewed de novo on appeal.