An “Exceptional Case” Need Not Be so Very Exceptional Anymore

In a patent suit involving a patent covering an elliptical trainer exercise machine, the US Supreme Court significantly changed a long-established standard for awarding attorney fees to the prevailing party.  Under the old standard, the trial court had the discretion to order the losing party to pay the prevailing party’s attorney fees if it found that the case was “exceptional.”  A case was regarded as “exceptional” if it was “objectively baseless and brought in subjective bad faith.”  This is a tough standard to meet.  The Supreme Court has now lowered the bar so that an “exceptional case” is one that either “stands out from others” with regard to the party’s litigation position (considering the law and the facts of the case), or is litigated in an unreasonable manner.  The Supreme Court instructed that the trial court should look at the totality of the circumstances, and that there were no fixed formulae or rules to apply.  Rather, the court should exercise its equitable discretion.  Octane Fitness, LLC v. Icon Heath & Fitness, Inc., 2014 U.S. LEXIS 3107, 134 S.Ct. 1739, 572US__, (2014),

The US Supreme Court has now lowered the bar to permit “fee-shifting” – ordering a losing party to pay the prevailing party’s attorney fees.  The new standard is that if the case either “stands out from others” with regard to the party’s litigation position (considering the law and the facts of the case), or is litigated in an unreasonable manner, then the prevailing party may be awarded its fees.

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