No. 12No. 12No. 12No. 12----1163116311631163
`
`IN THE
`Supreme Court of the United States
`_________
`
`HIGHMARK INC.,
`
`
`
`
`
`
`
`
`
`Petitioner,
`
`v.
`
`ALLCARE HEALTH MANAGEMENT SYSTEMS, INC.,
`
`
`
`
`
`
`
`
`_________
`
`Respondent.
`
`On Petition for a Writ of Certiorari to the On Petition for a Writ of Certiorari to the On Petition for a Writ of Certiorari to the On Petition for a Writ of Certiorari to the
`
`
`
`
`
`
`United States Court of Appeals United States Court of Appeals United States Court of Appeals United States Court of Appeals
`
`
`
`
`
`
`for for for the Federal Circuitthe Federal Circuit for the Federal Circuitthe Federal Circuit
`_________
`
`REPLY BRIEF FOR PETIREPLY BRIEF FOR PETIREPLY BRIEF FOR PETITIONERTIONER REPLY BRIEF FOR PETITIONERTIONER
`
`
`
`
`
`
`
`_________
`
`NEAL KUMAR KATYAL*
`DOMINIC F. PERELLA
`HOGAN LOVELLS US LLP
`555 13th Street, N.W.
`Washington, D.C. 20004
`(202) 637-5528
`neal.katyal@hoganlovells.com
`
`
`
`Counsel for Petitioner
`*Counsel of Record
`
`
`CYNTHIA E. KERNICK
`JAMES C. MARTIN
`KIM M. WATTERSON
`KEVIN S. KATONA
`THOMAS M. POHL
`REED SMITH LLP
`225 Fifth Avenue
`Pittsburgh, PA 15222
`(412) 288-3131
`
`
`
`
`
`
`

`
`ii
`ii
`
`
`TABLE OF CONTENTS
`TABLE OF CONTENTS
`
`
`
`INTRODUCTION ...................................................... .. 1
`INTRODUCTION ........................................................ 1
`
`ARGUMENT ............................................................. .. 4
`ARGUMENT ............................................................... 4
`
`I. THIS COURT’S CASES REFUTE
`I. THIS COURT’S CASES REFUTE
`RESPONDENT’S ARGUMENT ON
`RESPONDENT’S ARGUMENT ON
`THE MERITS ................................................... ..4
`THE MERITS ..................................................... 4
`
`TO
`ATTEMPTS
`II. RESPONDENT’S
`TO
`ATTEMPTS
`II. RESPONDENT’S
`DISTINGUISH COOTER AND PIERCE’
`DISTINGUISH COOTER AND PIERCE
`FAIL ................................................................. ..6
`FAIL ................................................................... 6
`
`III. THE DECISION BELOW CONFLICTS
`III. THE DECISION BELOW CONFLICTS
`BOTH WITH FEDERAL CIRCUIT
`BOTH WITH FEDERAL CIRCUIT
`PRECEDENT AND DECISIONS OF
`PRECEDENT AND DECISIONS OF
`OTHER COURTS OF APPEALS .................... ..8
`OTHER COURTS OF APPEALS ...................... 8
`
`THE
`OF
`IMPORTANCE
`IV. THE
`THE
`OF
`IMPORTANCE
`IV. THE
`QUESTION PRESENTED FAVORS
`QUESTION PRESENTED FAVORS
`REVIEW ......................................................... .. 10
`REVIEW ........................................................... 10
`
`CONCLUSION ........................................................ .. 12
`CONCLUSION .......................................................... 12
`
`
`
`
`
`
`
`
`

`
`iii
`
`
`
`TABLE OF AUTHORITIES
`
`Page
`
`CCCCASESASESASESASES::::
`
`Bill Johnson’s Rests., Inc. v. NLRB,
`461 U.S. 731 (1983). ........................................ 3, 6
`
`Brooks Furniture Mfg., Inc. v.
`Dutailier Int’l, Inc.,
`393 F.3d 1378 (Fed. Cir. 2005) ....................... 3, 8
`
`California Motor Transp. Co. v. Trucking
`Unlimited, 404 U.S. 508 (1972) .......................... 6
`
`Checkpoint Sys., Inc. v. All-Tag Sec. S.A.,
`711 F.3d 1341 (Fed. Cir. 2013) ......................... 10
`
`Cooter & Gell v. Hartmax Corp.,
`496 U.S. 384 (1990) ................................... passim
`
`FilmTec Corp. v. Hydranautics,
`67 F.3d 931 (Fed. Cir. 1995) ............................... 9
`
`Hoge Warren Zimmerman Co. v. Nourse &
`Co., 293 F.2d 779 (6th Cir. 1961) ........................ 7
`
`Pierce v. Underwood,
`487 U.S. 552 (1987) ................................... passim
`
`Precision Links Inc. v. USA Prods. Grp., Inc.,
`2013 WL 2450630
`(Fed. Cir. June 4, 2013) ..................................... 10
`
`Professional Real Estate Investors, Inc. v.
`Columbia Pictures Indus., Inc.,
`508 U.S. 49 (1993) ....................................... 4, 5, 6
`
`Salve Regina College v. Russell,
`499 U.S. 225 (1991) ............................................. 2
`
`Zadvydas v. Davis,
`533 U.S. 678 (2001) ............................................. 7
`
`
`
`
`

`
`iv
`
`
`
`TABLE OF AUTHORITIES—Continued
`
`Page
`
`
`
`
`CCCCONSTITUTIONONSTITUTION::::
`
`ONSTITUTIONONSTITUTION
`
`U.S. Const. amend. I .................................... 2, 3, 6, 7
`
`TATUTES::::
`SSSSTATUTES
`
`TATUTESTATUTES
`
`15 U.S.C. § 1117(a)(3) ............................................... 9
`
`35 U.S.C. § 285 ............................................... passim
`
`RRRRULESULESULESULES::::
`
`Fed. R. Civ. P. 11 .............................................. 6, 7, 8
`
`
`
`OOOOTHER THER AAAAUTHORITIESUTHORITIES::::
`
`THER THER
`
`UTHORITIESUTHORITIES
`
`R. Rader et al., Op-Ed., Make Patent Trolls
`Pay in Court, N.Y. Times, June 4, 2013 ........... 10
`
`
`
`
`
`
`

`
`
`
`
`
`
`
`IN THE
`Supreme Court of the United States
`_________
`
`No. 12-1163
`________
`
`HIGHMARK INC.,
`
`
`
`
`
`
`
`Petitioner,
`
`
`
`v.
`
`ALLCARE HEALTH MANAGEMENT SYSTEMS, INC.,
`
`
`
`
`
`
`
`
`_________
`
`Respondent.
`
`On Petition for a Writ of Certiorari to the On Petition for a Writ of Certiorari to the On Petition for a Writ of Certiorari to the On Petition for a Writ of Certiorari to the
`
`
`
`
`
`
`United States Court of Appeals United States Court of Appeals United States Court of Appeals United States Court of Appeals
`
`
`
`
`
`
`for thefor thefor the Federal Circuitfor the Federal CircuitFederal CircuitFederal Circuit
`_________
`
`REPLY BRIEF FOR PETIREPLY BRIEF FOR PETIREPLY BRIEF FOR PETITIONERTIONER REPLY BRIEF FOR PETITIONERTIONER
`
`
`
`
`
`
`
`_________
`
`
`
`
`
`INTRODUCTIONINTRODUCTIONINTRODUCTION INTRODUCTION
`
`The petition explained that it was impossible for
`the Federal Circuit to have fractured the law any
`more: Its 6-5 decision not only flouted this Court’s
`cases, it also split with decisions from every other
`circuit on an important statutory provision. Faced
`with that overwhelming case for certiorari, Respond-
`ent’s brief in opposition spends its time insisting that
`the Federal Circuit got it right on the merits. That
`argument would not ward off certiorari even if it
`were correct. But it is not correct. The Federal
`Circuit has gone astray. Review is required to stop
`its aberrant approach from neutering a statute
`crucial to the administration of patent law.
`
`Respondent’s defense of the Federal Circuit can be
`summarized in a syllogism: issues of law are re-
`
`
`
`
`

`
`2
`
`viewed de novo; objective baselessness is an issue of
`law; therefore, objective baselessness should be
`reviewed de novo. Both premises and the conclusion
`are wrong. As for the first premise: This Court has
`squarely held that even a “purely legal” issue should
`be reviewed deferentially in the attorney-fee context.
`Pierce v. Underwood, 487 U.S. 552, 560 (1988);
`Cooter & Gell v. Hartmax Corp., 496 U.S. 384, 402
`(1990). And the second premise: The objective
`baselessness inquiry is about “what constitutes
`reasonable conduct under varying circumstances”—a
`“quintessentially factual inquiry.” Pet. App. 35a
`(Mayer, J., dissenting). At most, as even the panel
`acknowledged, it is “based on mixed questions of law
`and fact.” Pet. App. 9a. And “deferential review of
`mixed questions of law and fact is warranted when it
`appears that the district court is ‘better positioned’
`than the appellate court to decide the issue in ques-
`tion.” Salve Regina Coll. v. Russell, 499 U.S. 225,
`233 (1991). The district court is “better positioned”
`here. See Cooter, 496 U.S. at 399-405; Pierce, 487
`U.S. at 557-63. Indeed, this case is a perfect illustra-
`tion of why deference is warranted. A district court,
`intimately familiar with the whole litigation, con-
`cluded that Respondent’s conduct was so egregious
`that it gave “the term ‘patent troll’ its negative
`connotation.” Pet. App. 69a. Yet its lengthy study
`and evaluation of the way the case was litigated
`received no deference at all.
`
`Respondent does briefly turn from the merits to the
`actual question at hand, but its passing attempts to
`reconcile the Federal Circuit’s decision with other
`authority fail. Its lead strategy for distinguishing
`Cooter and Pierce is to invoke the specter of
`“[c]onstitutional concerns,” specifically the “First
`
`
`
`
`

`
`3
`
`Amendment right of access to the courts.” Opp. 33-
`35. Those concerns dissolve under even minimal
`scrutiny. As much as Respondent would like to
`shoehorn this type of litigation within the protective
`embrace of the First Amendment, “baseless litigation
`is not immunized by the First Amendment right to
`petition.” Bill Johnson’s Rests., Inc. v. NLRB, 461
`U.S. 731, 743 (1983).
`
`As for the circuit splits: Respondent does not even
`try to dispute the divergence between the Federal
`Circuit’s approach here and that taken by eleven
`circuits in implementing the identical fee-shifting
`provision of the Lanham Act. And the best Respond-
`ent can muster against the fact that every circuit
`reviewed exceptional-case
`findings deferentially
`before the Federal Circuit was created is that none
`specifically held that “objective baselessness” should
`be reviewed deferentially. That is unsurprising:
`That nomenclature was not used by the Federal
`Circuit until 2005. Brooks Furniture Mfg. v. Du-
`tailier Int’l, Inc., 393 F.3d 1378, 1381 (2005).
`
`Finally, rather than dispute the importance of fee-
`shifting to modern patent litigation, Respondent
`suggests that this Court should wait on the sidelines
`for Congress to act. But the bills referenced by
`Respondent are all in extremely preliminary phas-
`es—none has even made it out of committee—and
`they deal with issues tangential to the question
`presented. This Court should act to restore vitality
`to the fee-shifting statute Congress has already
`passed: Section 285. The pending bills should not
`deter review.1
`
`
`1 The bulk of the brief in opposition is devoted to a prolix
`retelling of the procedural history of the case. It is replete with
`
`
`
`
`

`
`4
`
`
`
`
`
`ARGUMENTARGUMENTARGUMENT ARGUMENT
`
`REFUTE RESPONDENT’S IIII.... THIS COURT’S CASES THIS COURT’S CASES REFUTE RESPONDENT’S THIS COURT’S CASES THIS COURT’S CASES REFUTE RESPONDENT’S REFUTE RESPONDENT’S
`
`
`
`
`
`
`
`
`
`ARGUMENT ON THE MERITS.ARGUMENT ON THE MERITS.ARGUMENT ON THE MERITS. ARGUMENT ON THE MERITS.
`
`Respondent’s first argument is that because objec-
`tive baselessness is a “legal determination,” the
`Federal Circuit must review it de novo. That is
`directly contrary to this Court’s decisions in Pierce
`and Cooter. Pierce held that even a “purely legal
`issue” should be reviewed deferentially in the attor-
`ney-fee context. 487 U.S. at 560-61. Similarly, in
`Cooter, the precise question before the Court was
`“whether the court of appeals must defer to the
`district court’s legal conclusions in Rule 11 proceed-
`ings.” 496 U.S. at 401 (emphasis added). The Court
`answered yes. Id. at 405. The fact that something is
`in some sense a “legal” question does not lead inexo-
`rably to de novo review.
`
`Respondent relies solely on Professional Real Es-
`tate Investors, Inc. v. Columbia Pictures Industries,
`Inc. (“PRE”), 508 U.S. 49 (1993), to show both that
`objective baselessness is a legal question and that it
`should be reviewed de novo. But PRE only held that
`“probable cause” to institute legal proceedings is a
`question of law when “there is no dispute over the
`predicate facts of the underlying proceeding.” Id. at
`63. Here, the “predicate facts”—the characteristics
`of Highmark’s system, the adequacy of the pre-filing
`investigation, the background of the patent, and
`
`misrepresentations, which are not addressed here because they
`are irrelevant to the propriety of certiorari. The discussion of
`Trigon is particularly ironic, however, given that Respondent’s
`continual reliance on Trigon in district court, without ever
`adequately investigating or explaining the relationship between
`the accused system in Trigon and Highmark’s system, was one
`reason the court found the case exceptional. Pet. App. 63a.
`
`
`
`
`

`
`5
`
`whether or not there was infringement—were vigor-
`ously contested. See Pet. 6-8; Opp. 7-24. Indeed,
`Respondent’s first appeal was predicated on chal-
`lenging the district court’s view of the facts. See No.
`09-1065, Appellant Br. (Fed. Cir. Jan. 12, 2009).
`Thus the statement in PRE is by its own terms
`inapplicable.
`
`Moreover, when PRE called “probable cause” a
`“matter of law,” it meant that in a specific and lim-
`ited sense: It is an issue for the court rather than
`the jury to decide. PRE did not speak to the appro-
`priate standard of review. By contrast, both Pierce
`and Cooter make clear that when a “legal determina-
`tion” is “rooted in factual determinations,” so that
`the district court is “better situated than the court of
`appeals to marshal the pertinent facts and apply the
`fact-dependent legal standard,” the appellate court
`“must defer.” Cooter, 496 U.S. at 401-402, 405.
`
`Respondent also erroneously suggests that the
`standard of review makes no difference: Because the
`reasonableness of an allegation is a matter of law
`and a “district court by definition abuses its discre-
`tion when it makes an error of law,” it argues, review
`would effectively be de novo even under an abuse-of-
`discretion standard. Opp. 3. Once again, Respond-
`ent’s premise is wrong. Objective reasonableness is
`not a pure issue of law. It is a mixed question of law
`and fact that examines not merely claim construction
`but infringement as well, over the course of a poten-
`tially long litigation. Pet. App. 9a, 188a. And a
`district court’s application of a correctly stated, “fact-
`dependent legal standard” is entitled to deference.
`Otherwise Cooter itself would be meaningless. After
`all, it specifically calls for deference to “legal conclu-
`sions.” 496 U.S. at 401.
`
`
`
`
`

`
`6
`
`II.II.II.II. RESPONDENT’S ATTEMPTS TO DISTINGUISH RESPONDENT’S ATTEMPTS TO DISTINGUISH RESPONDENT’S ATTEMPTS TO DISTINGUISH RESPONDENT’S ATTEMPTS TO DISTINGUISH
`
`
`
`
`
`
`COOTER COOTER AND AND PIERCE PIERCE FAIL.
`
`
`FAIL.FAIL.FAIL.
`
`COOTER COOTER
`
`PIERCE PIERCE
`
`AND AND
`
`1. Respondent’s primary argument against the
`application of Cooter and Pierce is that they “do not
`involve the same Constitutional concerns that are at
`stake in cases subject to PRE’s ‘objectively reasona-
`ble’ test.” Opp. 34-35. This argument lacks merit for
`two reasons.
`
`To begin with, this case presents no constitutional
`concern whatever. In PRE, the Court recognized
`that a litigant could be subjected to criminal and civil
`liability (with treble damages) under the federal
`antitrust laws for the simple act of bringing a law-
`suit. The Court thus formulated its definition of
`“sham” litigation with “the First Amendment right to
`petition” in the background. PRE, 508 U.S. at 56.
`This case, by contrast, involves fee awards for base-
`less litigation. And this Court has settled, in no
`uncertain terms, that “baseless litigation is not
`immunized by the First Amendment right to peti-
`tion.” Bill Johnson’s Restaurants, 461 U.S. at 743.
`That is so because the right of access to courts oper-
`ates “within the limits * * * of their proper proce-
`dures,” and “unethical conduct in the setting of the
`adjudicatory process often results in sanctions.”
`California Motor Transport Co. v. Trucking Unlim-
`ited, 404 U.S. 508, 512, 515 (1972). Section 285 is
`just the sort of procedural regulation that does not
`implicate the First Amendment right of access at all.
`It is therefore unsurprising that Respondent has not
`cited a single case to the contrary, in the context of
`Section 285 or any other attorneys’-fee statute.
`
`Second, even if there were some First Amendment
`issue, that would not distinguish Cooter. Rule 11
`empowers a court to sanction an “attorney” or “party”
`
`
`
`
`

`
`7
`
`for filing a frivolous motion or pleading. Thus both
`Rule 11 and Section 285 have the same practical
`effect—to dissuade the filing of baseless suits—and
`create the same alleged tension with the right of
`access, were that concern not so clearly foreclosed.
`
`2. Respondent’s other attempts to distinguish
`Cooter and Pierce fare no better. Respondent con-
`tends that “unlike Rule 11 sanctions, which are
`directed to a specific point in time, Section 285
`awards are based on the entire litigation.” Opp. 36.
`That is true, but it hardly helps Respondent: The
`fact that Section 285 determinations require a com-
`prehensive look at the entire course of a case—often
`spanning a decade, like this one—militates in favor
`of deference. It would be impossible for an appellate
`judge to acquire the same level of familiarity with
`the “entire litigation” as a district judge who has
`lived with it. Even if it were, that “acquisition”
`would come “at unusual expense,” and would not be a
`worthwhile “investment of appellate energy.” Coot-
`er, 487 U.S. at 552, 561.
`
`Respondent also claims that “the EAJA and Rule
`11 describe the award as discretionary,” whereas the
`“discretionary language” in Section 285 was removed
`by the 1952 revision to the Patent Act. Opp. 35.
`That is plainly wrong. Section 285 still provides that
`a court “may award” fees, and “‘may’ suggests discre-
`tion.” Zadvydas v. Davis, 533 U.S. 678, 697 (2001).
`That is why courts have consistently recognized that
`the 1952 amendment did “not do[ ] away with the
`discretionary feature.” Hoge Warren Zimmerman
`Co. v. Nourse & Co., 293 F.2d 779, 783 (6th Cir.
`1961).
`
`Finally, Respondent claims that it is “significant”
`that Section 285 awards tend to be larger than Rule
`
`
`
`
`

`
`8
`
`11 sanctions. Putting aside the fact that sanctions
`inflict tremendous reputational harm, Cooter was
`grounded in the fact that “the district court is better
`situated than the court of appeals to marshal the
`pertinent facts and apply the fact-dependent legal
`standard.” 496 U.S. at 402. The premise of Cooter is
`that the best decision-maker will make the best
`decision, a fact that does not vary with the amount in
`controversy. And the best decision-maker, in both
`the Rule 11 and Section 285 contexts, is the district
`court. The fact that awards are larger under Section
`285 only increases the importance of ensuring that
`the decision is made well.
`
`
`
`THE DECISION BELOW CONFLICTS BOTH WITH III.III.III.III. THE DECISION BELOW CONFLICTS BOTH WITH THE DECISION BELOW CONFLICTS BOTH WITH THE DECISION BELOW CONFLICTS BOTH WITH
`
`
`
`
`FEDERAL FEDERAL
`
`CIRCUIT CIRCUIT
`
`PRECEDENT PRECEDENT
`
`AND AND
`
`FEDERAL FEDERAL
`
`CIRCUIT CIRCUIT
`
`PRECEDENT PRECEDENT
`
`AND AND
`
`
`
`DECISIONS OF OTHER COURTS OF APPEALS.DECISIONS OF OTHER COURTS OF APPEALS.DECISIONS OF OTHER COURTS OF APPEALS. DECISIONS OF OTHER COURTS OF APPEALS.
`
`1. Before the consolidation of patent appeals in the
`Federal Circuit, every circuit concluded that a dis-
`trict court’s exceptional-case finding under the
`Patent Act should be reviewed deferentially. Pet. 25.
`Respondent’s only retort to that clear split is that
`“[n]one of the cases cited by Highmark states that an
`‘objectively baseless’ determination should be re-
`viewed with deference.” Opp. 38 n.5. Of course none
`does: The Federal Circuit did not begin using the
`“objective baselessness” nomenclature for exceptional
`case findings until 2005, see Brooks, 393 F.3d at
`1381, well after the other circuits had their oppor-
`tunity to consider the standard of review. But that
`does not make it any less of a split. The bottom line
`is that the Federal Circuit interposes de novo review
`of Section 285 fee awards, whereas every other
`circuit had deferentially reviewed each aspect of such
`awards. On that critical divergence Respondent has
`nothing to say. And it is precisely the novel use of de
`
`
`
`
`

`
`9
`
`novo review that fractured the Federal Circuit 6-5.
`See Pet. App. 191a. (decision below is “squarely at
`odds with the highly deferential review adopted by
`every other regional circuit” in analogous contexts).
`
`2. The Lanham Act, just like the Patent Act, pro-
`vides for attorneys’ fees in “exceptional cases.” 15
`U.S.C. § 1117(a)(3). And the circuits agree—with
`one outlier—that a district court’s exceptional-case
`finding in that context should be reviewed deferen-
`tially. Pet. 24. Respondent does not even discuss, let
`alone distinguish, those decisions—an apparent
`concession that the split, and damage to the fabric of
`the law in this area, is irreconcilable.
`
`3. The petition pointed to an unbroken line of Fed-
`eral Circuit cases deferring to district courts’ judg-
`ments about objective baselessness in the exception-
`al-case context. Pet. 22. In response, Respondent
`cites a single case from 1995 that supposedly shows
`that “objective baselessness is to be reviewed de
`novo.” Opp. 38-39 (citing FilmTec Corp. v. Hydro-
`nautics, 67 F.3d 931 (Fed. Cir. 1995)). That case is
`inapposite. First, FilmTec was not about fee-shifting
`at all; it was, like PRE, about the sham exception to
`antitrust immunity. Therefore it was not controlled
`by Cooter and Pierce, and the many factors favoring
`deference here were not present. Second, in FilmTec
`the facts informing the objective baselessness analy-
`sis were “established by prior litigations” and “there-
`fore the law of the case.” 67 F.3d at 938. Thus the
`facts were not only undisputed, but the presumption
`of district court familiarity with the facts was weak-
`ened. FilmTec in no way contradicts the Federal
`Circuit’s consistent practice of deferring to district
`courts’ judgments in the attorneys’ fee context.
`
`
`
`
`
`
`

`
`10
`
`IIIIVVVV.... THE THE THE THE
`
`
`
`IMPORTANCE OF THE QUESTION IMPORTANCE OF THE QUESTION
`
`
`IMPORTANCE OF THE QUESTION IMPORTANCE OF THE QUESTION
`REVIEW.
`
`
`
`
`
`PRESENTED FAVORPRESENTED FAVORPRESENTED FAVORSSSS REVIEW.PRESENTED FAVOR REVIEW.REVIEW.
`
`Respondent does not dispute any of the features of
`modern patent litigation that support the case for
`certiorari: that suits by trolls are now a majority of
`all patent suits filed in the United States; that these
`suits have a startlingly low success rate; that the
`troll problem is exacerbated by the escalating cost of
`patent litigation; or that fee-shifting under Section
`285 can be an effective mechanism to address these
`problems. Pet. 27-28; see also BCBSA Amicus Br. 9-
`12. Indeed, this month Chief Judge Rader (one of
`the dissenters in this case) penned an editorial in the
`New York Times urging trial judges to exercise their
`Section 285 authority more aggressively to “make
`trolls pay for abusive litigation.” R. Rader et al.,
`Make Patent Trolls Pay in Court, N.Y. Times, June
`4, 2013, at A25. “Section 285 of the Patent Act,” he
`explains, “give[s] judges the authority they need to
`shift the cost burden of litigation abuse from the
`defendant to the troll.” Id.
`
`That will be harder after this case. As the dissent-
`ers recognized, the effect of the decision below is to
`“tie[ ] the trial court’s hand,” Pet. App. 213a, and to
`make it even less likely for abused defendants to
`recoup their costs. Cases subsequent to Highmark
`have borne that out: In just a few months, the
`Federal Circuit has vacated both fee awards it has
`reviewed. Precision Links Inc. v. USA Products
`Grp., Inc., 2013 WL 2450630 (2013); Checkpoint Sys.,
`Inc. v. All-Tag Sec. S.A., 711 F.3d 1341 (2013). The
`decision below has weakened the deterrent effect of
`Section 285.
`
`Respondent counters that the Court should not
`worry because the Federal Circuit may exercise its
`
`
`
`
`

`
`11
`
`de novo review to award fees, rather than reverse
`them. That argument ignores how the standard will
`operate in practice. A skillful appellate lawyer will
`now be able to dream up some remotely colorable
`argument to have a fee award vacated, even if that
`argument was not made to the district judge. One
`who has been denied fees, however, must attempt to
`prove a negative: that there are no colorable argu-
`ments at all in support of a claim. That will only be
`possible in the most unusual and egregious cases.
`BCBSA Amicus Br. 16.
`
`2. Respondent also points to “numerous bills pend-
`ing in Congress” as reasons to deny certiorari. Opp.
`41. But these bills are at best tangential to the
`issues at hand. The Patent Quality Improvement
`Act (S. 866) deals with when parties can petition the
`Patent and Trademark Office (PTO) to review a
`grant of a business method patent. The End Anon-
`ymous Patents Act (H.R. 2024) would require any
`sales or transfers of patents to be disclosed to the
`PTO. The Patent Abuse Reduction Act (S. 1013)
`would, among other things, modify the substantive
`standard governing when fees should be awarded,
`but not otherwise affect the standard of review.
`Similarly, the SHIELD Act (H.R. 845) would make
`an award of attorneys’ fees against patent trolls the
`norm unless “exceptional circumstances” make it
`unjust. But this does not affect the standard of
`review, and only applies to a subset of patent liti-
`gants. The question presented by this case, by
`contrast, is germane to every patent suit, regardless
`of the parties.
`
`Not only are these bills irrelevant to the basic issue
`in this case, they are in very preliminary phases;
`none has even been voted out of committee. They
`
`
`
`
`

`
`12
`
`should not detain this Court. Congress already has
`empowered district judges with a vital tool to ad-
`dress abuse of the patent system: the award of
`attorneys’ fees in exceptional cases. But the decision
`below has “tie[d] the trial court’s hand,” Pet. App.
`213a, while disregarding this Court’s precedent and
`the unanimous views of other circuits.
`
`
`
`
`
`CONCLUSIONCONCLUSIONCONCLUSION CONCLUSION
`
`For the foregoing reasons, and those in the petition,
`the petition should be granted.
`
`Respectfully submitted,
`
`NEAL KUMAR KATYAL*
`DOMINIC F. PERELLA
`HOGAN LOVELLS US LLP
`555 13th Street, N.W.
`Washington, D.C. 20004
`(202) 637-5528
`neal.katyal@hoganlovells.com
`
`Counsel for Petitioner
`*Counsel of Record
`
`CYNTHIA E. KERNICK
`JAMES C. MARTIN
`KIM M. WATTERSON
`KEVIN S. KATONA
`THOMAS M. POHL
`REED SMITH LLP
`225 Fifth Avenue
`Pittsburgh, PA 15222
`(412) 288-3131
`
`
`
`
`
`June 2013