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SCOTUS Vacates and Remands Case in Light of Octane Fitness

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By Gabriella Khorasanee, JD on May 09, 2014 3:55 PM

We can't get enough of fee shifting in patent cases. Just on the heels of the Court's decisions in Octane Fitness and Highmark, the Supreme Court granted cert in another case, also under Patent Act's Section 285, which allows a "court in exceptional cases may award reasonable attorney fees to the prevailing party."

In one fell swoop, the Supreme Court, in a summary disposition, granted cert., vacated the decision of the Federal Circuit, and remanded the case in Kobe Properties Sarl, et al., v. Checkpoint Systems, Inc. Read on for details.

Federal Circuit Opinion

Checkpoint Systems, Inc. sued All-Tag Security for patent infringement, but a jury was unconvinced and found the "patent not infringed, invalid, and unenforceable." Upon entering judgment, the district court found the circumstances of the case "exceptional" and awarded All-Tag $6.6 million in attorney's fees, costs and interest.

On appeal, the Federal Circuit reversed the award, and stated: "The infringement charge was not shown to have been made in bad faith or objectively baseless. The district court's determination that this was an exceptional case under § 285 is not supported by the record." And, with that, reversed the district court's award of $6.6 million in attorneys fees, costs and interest; the defendants appealed.

Octane Fitness and Highmark

While the petition for writ of certiorari was pending, the Supreme Court decided Octane Fitness, which "held that the objectively baseless standard is improper and too strict," according to Patently-O. In Highmark, the Court held that the proper standard of review of an award of attorneys' fees is abuse of discretion.

SCOTUS Remand

In one stroke, the Supreme Court granted the petition for writ of certiorari, vacated the Federal Circuit's decision, and remanded in light of its recent decision in Octane Fitness and Highmark. Now, the Federal Circuit will have to apply the abuse of discretion standard, so we can expect the $6.6 million award to stick. The Court's decision will have an impact far beyond this case though, and may likely have a chilling effect on baseless patent troll claims.

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