Supreme Court Makes It Easier To Get Lawyers Fees In Patent Cases

UnknowingFool (672806) writes "In a pair of unanimous rulings yesterday, the Supreme Court made it easier for defendants in patent cases to collect attorneys fees if the litigation was frivolous. In the first case, Octane Fitness v. Icon Health & Fitness, the court ruled that a standard used by lower courts to award attorney's fees was impossible to meet. The original standard under Brooks Furniture Mfg., Inc. v. Dutailier Int'l, Inc. had ruled that a claim had to be both 'objectively baseless' and 'brought in subjective bad faith' before fees could be awarded. The high court ruled that fees should be awarded merely when the case is 'exceptional' and not when the defendant must prove there was zero merit.

In the second case, Highmark v. Allcare Health Management, the Supreme Court also noted the 'exceptional' standard in reversing the appellate court's decision but specifically ruled that appellate courts should give more deference to the lower courts on rulings of fact. In Highmark, the district court found that Allcare had engaged in a pattern of 'vexatious' and 'deceitful' conduct throughout the litigation and awarded fees. The appellate court while agreeing with the lower court about part of the case reversed the fees in their de novo review of the case. In de novo reviews, the court case is essentially retried with the higher court. The Supreme Court iterated that de novo reviews should be done typically for 'questions of law' and reviews on 'questions of fact' are done if there are clear errors with decisions on matters of discretion 'reviewable for "abuse of discretion."' In other words, the appellate courts can review a case if a lower court has not correctly interpreted law; however, they should not retry a lower case on facts unless the lower court made a clear error. Also unless the lower court abused their power in some way, the appellate court should not review their final decisions.

For example, if a person is tried for murder, an appellate court could rule that a district court misinterpreted a statute about sentencing if the person if found guilty. The appellate court should not retry the facts of the case unless the lower court had made a clear error like ruling that there was a DNA match when there was not. Also an appellate court should not reverse the lower court if they sentenced the person to a reasonable time. Now if the district court sentenced the person to 400 years for one murder, then the appellate court should intervene.

In effect the two rulings make it easier for companies to recover money should they be sued in frivolous patent lawsuits. This would make the risks greater for those who sue."

Comments

Re:Exceptional

[UnknowingFool]

There are other rulings that define "exceptional". For example, the SCO case would be called exceptional. Despite very public statements about their evidence against IBM, SCO had no reasonable evidence when the time came to present it to the court. Also, it appears that SCO did not even have the standing to sue on copyright claims and should have known this very early on when Novell challenged their claims of ownership of Unix.

Re:400 years for one murder

[funkman]

Because a life sentence (and other sentences) doesn't mean it will happen for that whole period of time. You can be eligible for parole before the time is up. By having multiple sentences or ridiculous amounts of time, it raises the bar high enough to prevent some people from EVER getting out.

Re:Exceptional

[Bacon Bits]

There's a reason the court documents are so often linked like this. It's on page one of the two page syllabus at the very beginning of the linked in the summary:

(a) Section 285 imposes one and only one constraint on district courts’ discretion to award attorney’s fees: The power is reserved for“exceptional” cases. Because the Patent Act does not define “exceptional,” the term is construed “in accordance with [its] ordinary meaning.” Sebelius v. Cloer, 569 U. S. ___, ___. In 1952, when Congress used the word in 285 (and today, for that matter),“[e]xceptional” meant “uncommon,” “rare,” or “not ordinary.” Webster’s New International Dictionary 889 (2d ed. 1934). An “exceptional” case, then, 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. District courts may determine whether a case is “exceptional” in the case-by-case exercise of their discretion, considering the totality of the circumstances. Cf. Fogerty v. Fantasy, Inc., 510 U. S. 517. Pp. 7–8.

These are former lawyers working so lawyers don't get away with something they should not, and the court is expected to concretely justify its rulings. Everything is defined and stated as clearly as possible.

Re:400 years for one murder

[Lord Crc]

Why in god's name would you sentence someone to 400 years in prison unless you believe in Highlanders?

Here in Norway, the maximum sentence is 21 years, and doesn't stack beyond 21 years.

First-degree murder has a maximum of 21 years. So, you could have two guys in jail, both serving 21 years, one which murdered one person, the other which murdered say 69.

Now, I believe that taking 69 lives in cold blood is significantly worse than "just" one. However the sentence does not reflect this.

So while 400 years for one murder is a bit much, sentencing the second guy to 69 * 21 = 1449 years in prison would at least more accurately reflect the crime he committed.

How many of those years he must serve could be orthogonal, if society wants it that way.

Good Job Supreme Court!

[Firethorn]

I'll note that recovery of attorney fees is unlikely against true patent troll companies - they'll just use the standard tricks of using a shell company with no assets on the books, just enough money to pay for their lawyers. Though I've heard of that failing on occasion - there are ways to reach deeper into the shells in cases like this, such as charging the lawyers that brought the suit, the executives of the company(SOMEBODY has to be named), etc....

But anything that raises the risk of engaging in patent trolling(and similar lawsuits) is a good thing.

As always, awards should generally be limited to 'reasonable' fees. No spending $1M then charging the other guy for it, when $100k would have been enough...

Re:Good Job Supreme Court!

[Anonymous Coward]

Unfortunately, over the years the USPTO has revised it's evaluation criteria such that:
'novel' = "nobody has ever explicitly claimed to have done *exactly* this thing in *exactly* this way in patent application before", and
'non-obvious [to a normally skilled practitioner of the art]' = "the patent evaluator, who has never worked in any field even remotely associated with the patent has never seen *exactly* this method discussed in a prior patent application".

Re:400 years for one murder

[ZorglubZ]

Almost, but not quite, true. In Norway, you get your sentence of e.g. 21 years imprisonment, then there's forvaring (translates to something like custodial sentence), which means you cannot be released until a board deems you to be rehabilitated. This can mean that you may get out of jail after 2/3rds of the sentence, i.e. 14 years (unless there's a different minimum specified), if the board thinks you've understood the seriousness of the crime and are remorseful; if they don't think so, you're stuck.