SCOTUS Tries to Fix Patent System Tilt by Clarifying When Loser Should Pay

BY Heather Greenfield
April 29, 2014

Washington – Two patent Supreme Court rulings Tuesday could help sort out when the losing party should be responsible for paying the legal fees of the winner in patent lawsuits. The Supreme Court found that the U.S. Court of Appeals for the Federal Circuit, which handles all patent appeals, was making it nearly impossible to obtain an award of legal fees, even in meritless cases.

In the Octane Fitness v. ICON Fitness & Health case, the Supreme Court rejected the Federal Circuit’s standard for awarding legal fees and held that such an award is appropriate in a case 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.”

In the Highmark v. Allcare Health Management System case, the Supreme Court rejected the Federal Circuit’s rule that decisions regarding awarding legal fees should be reviewed from scratch on appeal and held that trial court judges are entitled to deference unless they abuse their discretion.

The Computer & Communications Industry Association has fought for balanced patent reform laws and has filed amicus briefs over the years in a range of intellectual property cases before the Supreme Court. The following can be attributed to CCIA President & CEO Ed Black:

“The decisions Tuesday show the Supreme Court Justices recognize the burden that abusive patent litigation puts on productive U.S. companies and the new precedent will be a step toward addressing the problem by making it more financially risky for those abusing U.S. patent laws and harming the economy for their own gains.

“We welcome the Court’s ruling that would make it easier to shift fees in exceptional cases. While the Supreme Court helped interpret what an exceptional case looks like, legislation is still needed to more comprehensively address the multiple problems that characterize abusive patent litigation tactics. It’s will still be too easy for patent trolls to file nuisance lawsuits and strategically run up the defendant’s legal costs in hopes of extracting settlements from them.

“We look forward to Senate action this week to finally bring about long-overdue reform to help rein in those abusing the patent system.”

For more information, please see CCIA patent counsel Matt Levy’s blog post:

Supreme Court Helps Reign In Patent Trolls, Legislation Still Needed

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