No. 12-1184
`In the Supreme Court of the United States
`
`
`OCTANE FITNESS, LLC, PETITIONER
`
` v.
`
`ICON HEALTH & FITNESS, INC.
`
`
`
`
`ON WRIT OF CERTIORARI
`
`TO THE UNITED STATES COURT OF APPEALS
`
`FOR THE FEDERAL CIRCUIT
`
`
`BRIEF FOR THE UNITED STATES
`
`
`AS AMICUS CURIAE SUPPORTING PETITIONER
`
`
`
`
`
`
`
`
`
`
`
` NATHAN K. KELLEY
`
`
`
`Solicitor and Deputy
`General Counsel
` LORE A. UNT
`
`
` JOSEPH MATAL
`
`
` JAMIE L. SIMPSON
`
`
` Associate Solicitors
`
`United States Patent and
`Trademark Office
` Alexandria, Va. 22313
`
`
`
`
`DONALD B. VERRILLI, JR.
`
`Solicitor General
`Counsel of Record
` STUART F. DELERY
`
`
`
`Assistant Attorney General
` MALCOLM L. STEWART
`
`
`
`Deputy Solicitor General
`ROMAN MARTINEZ
`
`Assistant to the Solicitor
`
`General
`
`
` SCOTT R. MCINTOSH
`
`
` MARK R. FREEMAN
`
`
` Attorneys
`
`Department of Justice
`Washington, D.C. 20530-0001
`SupremeCtBriefs@usdoj.gov
`(202) 514-2217
`
`
`
`
`
`

`
`
`
`QUESTION PRESENTED
`
`
`Section 285 of the Patent Act provides that “[t]he
`court in exceptional cases may award reasonable at-
`torney fees to the prevailing party.” 35 U.S.C. 285.
`
` The question presented is as follows:
`Whether a prevailing defendant seeking attorney’s
`fees under Section 285 must prove, by clear and con-
`vincing evidence, that the patentee either (a) commit-
`ted misconduct in the litigation or in securing the
`patent, or (b) asserted an infringement claim that was
`both objectively baseless and subjectively brought in
`bad faith.
`
`
`
`
`(I)
`
`
`
`

`
`
`
`TABLE OF CONTENTS
`
`
`
`
`Page
`Interest of the United States ........................................................1
`
`
`Statement .........................................................................................2
`
`Summary of argument ...................................................................6
`
`
`Argument:
`
`
`Section 285 empowers district courts to award
`
`attorney’s fees to prevent gross injustice ..............................8
`
`A. Section 285 is a broad grant of discretionary
`
`
`authority to district courts .................................................8
`
`
`B. District courts have broad discretion to award
`
`
`fees to address the types of misconduct and
`
`
`injustice identified in the cases decided under
`
`
`the 1946 Act........................................................................15
`
`
`
`C. A totality-of-circumstances approach is consistent
`
`with the rules governing fee awards in copyright
`
`
`and trademark cases.........................................................20
`
`
`
`D. The Federal Circuit’s interpretation of Section
`
`285 unduly restricts district courts’ discretion
`
`
`to award fees ......................................................................23
`
`
`
`
`1. Section 285 does not incorporate the test for
`
`
`
`
`“sham” litigation under antitrust law ......................24
`
`
`
`
`2. “Objective baselessness” is not required ................27
`
`
`
`
`3. “Subjective bad faith” is not required .....................29
`
`
`4. “Clear and convincing” evidence is not
`
`
`
`required .......................................................................31
`
`
`E. The Court should vacate the Federal Circuit’s
`
`
`judgment and remand for consideration of
`
`petitioner’s fee request under the correct
`
`standard ..............................................................................32
`
`Conclusion......................................................................................34
`
`
`
`
`
`
`
`
`
`
`
`(III)
`
`
`

`
`IV
`
`
`
`TABLE OF AUTHORITIES
`
`
`
`
`Cases:
`Page
`
`
`Addington v. Texas, 441 U.S. 418 (1979).............................. 32
`
`
`
`
`Aeration Processes, Inc. v. Walter Kidde & Co.,
`
`
`
`177 F.2d 772 (2d Cir. 1949).................................................. 12
`
`
`Ale House Mgmt., Inc. v. Raleigh Ale House,
`
`
`Inc., 205 F.3d 137 (4th Cir. 2000) ................................. 22, 30
`
`
`Algren Watch Findings Co. v. Kalinsky, 197 F.2d 69
`
`
`
`(2d Cir. 1952) ............................................................. 12, 13, 14
`
`Alyeska Pipeline Serv. Co. v. Wilderness Soc’y,
`
`421 U.S. 240 (1975) ..................................................... 9, 24, 26
`
`
`
`Ankenbrandt v. Richards, 504 U.S. 689 (1992) ................... 16
`
`
`
`Béné v. Jeantet, 129 U.S. 683 (1889) ..................................... 32
`
`
`
`
`Bilski v. Kappos, 130 S. Ct. 3218 (2010)................................. 9
`
`
`
`Blanc v. Spartan Tool Co.:
`
`
`
`168 F.2d 296 (7th Cir.), cert. denied, 335 U.S. 853
`
`
`(1948) ............................................................................. 14
`
`
`178 F.2d 104 (7th Cir. 1949)................................. 12, 13, 14
`
`
`
`Blonder-Tongue Labs., Inc. v. University of Ill.
`
`Found., 402 U.S. 313 (1971) ................................................ 18
`
`
`
`Brennan v. Hawley Prods. Co., 98 F. Supp. 369
`
`
`
`
`(N.D. Ill. 1951)....................................................................... 12
`
`
`
`Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc.,
`
`393 F.3d 1378 (Fed. Cir. 2005)...................... 4, 18, 25, 26, 31
`
`
`
`Christiansburg Garment Co. v. EEOC, 434 U.S. 412
`
`(1978) ................................................................................ 28, 30
`
`City of Columbia v. Omni Outdoor Adver., Inc.,
`
`
`
`499 U.S. 365 (1991) ............................................................... 26
`
`
`Dimet Proprietary, Ltd. v. Industrial Metal Protec­
`
`tives, 109 F. Supp. 472 (D. Del. 1952) ................................ 11
`
`
`
`
`
`Dixie Cup Co. v. Paper Container Mfg. Co., 174 F.2d
`
`
`
`
`
`834 (7th Cir.), cert. denied, 338 U.S. 867 (1949) ......... 13, 14
`
`
`
`
`
`
`
`

`
`V
`
`
`Cases—Continued:
`
`Page
`
`Dubil v. Rayford Camp & Co., 184 F.2d 899
`
`
`
`
`(9th Cir. 1950)...................................................... 11, 12, 13, 14
`
`
`
`Eagles, Ltd. v. American Eagle Found., 356 F.3d 724
`
`
`(6th Cir. 2004).................................................................. 22, 30
`
`
`eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388
`
`(2006) ...................................................................................... 19
`
`Eltech Sys. v. PPG Indus., Inc., 903 F.2d 805
`
`
`(Fed. Cir. 1990) ..................................................................... 17
`
`
`
`Epcon Gas Sys., Inc. v. Bauer Compressors,
`
`
`Inc., 279 F.3d 1022 (Fed. Cir. 2002) ................................... 17
`
`
`
`Faulkner v. Gibbs, 199 F.2d 635 (9th Cir. 1952) ................. 31
`
`
`
`
`Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994) ........... 8, 20, 21
`
`
`
`Forest Labs., Inc. v. Abbott Labs., 339 F.3d 1324
`
`
`
`(Fed. Cir. 2003), cert. denied, 540 U.S. 1109 (2004)........... 4
`
`
`General Motors Corp. v. Devex Corp., 461 U.S. 648
`
`(1983) .................................................................................. 3, 14
`
`
`Hall v. Keller, 81 F. Supp. 835 (W.D. La. 1949),
`
`
`modified on other grounds, 180 F.2d 753
`
`
`
`(5th Cir.), cert. denied, 340 U.S. 818 (1950) ...................... 11
`
`
`
`Hartman v. Hallmark Cards, Inc., 833 F.2d 117
`
`
`
`
`(8th Cir. 1987)........................................................................ 30
`
`
`
`Hensley v. Eckerhart, 461 U.S. 424 (1983)..................... 21, 28
`
`
`
`Herman & MacLean v. Huddleston, 459 U.S. 375
`
`
`(1983) ...................................................................................... 32
`
`
`Hoffmann-La Roche Inc. v. Invamed Inc., 213 F.3d
`
`1359 (Fed. Cir. 2000) ............................................................ 17
`
`
`
`Hughes v. Rowe, 449 U.S. 5 (1980)........................................ 30
`
`
`
`
`iLOR, LLC v. Google, Inc., 631 F.3d 1372 (Fed. Cir.
`
`2011) ....................................................................... 4, 25, 27, 29
`
`
`
`Independent Fed’n of Flight Attendants v. Zipes,
`
`491 U.S. 754 (1989) ............................................. 15, 20, 27, 30
`
`
`
`
`
`
`
`
`

`
`VI
`
`
`Page
`
`
`Cases—Continued:
`Krieger v. Colby, 106 F. Supp. 124 (S.D. Cal.
`
`
`
`1952) ........................................................................... 11, 12, 31
`
`
`Laufenberg, Inc. v. Goldblatt Bros., 187 F.2d 823
`
`
`(7th Cir. 1951).................................................................. 11, 13
`
`
`
`
`Lincoln Elec. Co. v. Linde Air Prods. Co.,
`
`74 F. Supp. 293 (N.D. Ohio 1947) ................................. 13, 14
`
`
`
`
`Machinery Corp. of Am. v. Gullfiber AB, 774 F.2d
`
`
`
`
`467 (Fed. Cir. 1985) ..............................................................31
`
`Martin v. Franklin Capital Corp., 546 U.S. 132
`
`(2005) ................................................................ 8, 15, 27, 28, 30
`
`
`
`Marx v. General Revenue Corp., 133 S. Ct. 1166
`
`
`(2013) ........................................................................................2
`
`Mathis v. Spears, 857 F.2d 749 (Fed. Cir. 1988).................17
`
`
`
`
`
`Merrill v. Builders Ornamental Iron Co.,
`
`197 F.2d 16 (10th Cir. 1952) .......................................... 13, 31
`
`
`
`Microsoft Corp. v. i4i Ltd. P’ship, 131 S. Ct. 2238
`
`
`
`
`(2011) ......................................................................................32
`
`National Ass’n of Prof’l Baseball Leagues, Inc.
`
`
`
` 
`v. Very Minor Leagues, Inc., 223 F.3d 1143
`
`
`
`(10th Cir. 2000)................................................................ 22, 31
`
`
`
`National Brass Co. v. Michigan Hardware Co.,
`
`
`75 F. Supp. 140 (W.D. Mich. 1948) .....................................12
`
`
`
`
`
`Newman v. Piggie Park Enters., Inc., 390 U.S. 400
`
`
`(1968) ................................................................................ 28, 30
`
`
`Northcross v. Board of Ed. of the Memphis City
`
`
`
`Schs., 412 U.S. 427 (1973) ....................................................28
`
`
`
`Noxell Corp. v. Firehouse No. 1 Bar-B-Que Rest.,
`
`771 F.2d 521 (D.C. Cir. 1985) .............................. 9, 23, 30, 31
`
`
`
`Orrison v. C. Hoffberger Co., 190 F.2d 787
`
`
`(4th Cir. 1951)............................................................ 12, 13, 14
`
`
`
`
`
`
`
`
`

`
`VII
`
`
`
`
`Page
`
`
`Cases—Continued:
`Packwood v. Briggs & Stratton Corp., 99 F. Supp.
`
`
`803 (D. Del. 1951), rev’d on other grounds, 195 F.2d
`
`
`971 (3d Cir.), cert. denied, 344 U.S. 844 (1952)................. 12
`
`
`
`Park-In-Theatres, Inc. v. Perkins, 190 F.2d 137
`
`
`(9th Cir. 1951)................................................ 10, 12, 13, 29, 31
`
`
`
`Patsy’s Brand, Inc. v. I.O.B. Realty, Inc., 317 F.3d
`
`
`
`209 (2d Cir. 2003) .................................................................. 22
`
`
`
`
`Pennsylvania Crusher Co. v. Bethlehem Steel Co.,
`
`
`193 F.2d 445 (3d Cir. 1951)............................................ 11, 13
`
`
`
`Pierce v. Underwood, 487 U.S. 552 (1988) ........................... 27
`
`
`
`
`Proctor & Gamble Co. v. Amway Corp., 280 F.3d 519
`
`
`
`(5th Cir. 2002)........................................................................ 22
`
`
`
`Professional Real Estate Investors, Inc. v. Columbia
`
`
`Pictures Indus., Inc., 508 U.S. 49 (1993)..................... 25, 26
`
`
`
`Rohm & Haas Co. v. Crystal Chem. Co., 736 F.2d 688
`
`
`
`
`(Fed. Cir. 1984) ............................................................... 17, 29
`
`
`
`Securacomm Consulting, Inc. v. Securacom, Inc.,
`
`224 F.3d 273 (3d Cir. 2000)............................................ 22, 30
`
`
`
`Stephen W. Boney, Inc. v. Boney Servs., Inc.,
`
`
`127 F.3d 821 (9th Cir. 1997) ................................................ 30
`
`
`
`Tamko Roofing Prods., Inc. v. Ideal Roofing Co.,
`
`282 F.3d 23 (1st Cir. 2002)............................................. 22, 30
`
`
`
`Teese v. Huntingdon, 64 U.S. (23 How.) 2 (1860) ................. 2
`
`
`
`Tire Kingdom, Inc. v. Morgan Tire & Auto, Inc.,
`
`
`253 F.3d 1332 (11th Cir. 2001) ............................................ 22
`
`
`
`Vischer Prods. Co. v. National Pressure Cooker Co.,
`
`
`92 F. Supp. 138 (W.D. Wis. 1950) ........................... 12, 13, 31
`
`
`
`
`
`
`Wilson v. Seng Co., 194 F.2d 399 (7th Cir. 1952) ................ 31
`
`
`
`
`
`Yamanouchi Pharm. Co. v. Danbury Pharmacal,
`
`Inc., 231 F.3d 1339 (Fed. Cir. 2000) ................................... 17
`
`
`
`
`
`
`

`
`VIII
`
`
`
`
`Constitution, statutes and rules:
`
`Page
`
`
`U.S. Const.:
`
`
`
`Art. I, § 8, Cl. 8 (Patent Clause)........................................2
`
`
`Amend. I....................................................................... 25, 26
`
`
`Act of Aug. 1, 1946, ch. 726, 60 Stat. 778
`
`
`
`
`(35 U.S.C. 70 (1946))........................................................... 2, 9
`
`Civil Rights Act of 1964, 42 U.S.C. 2000a et seq.:
`
`
`
`Tit. II, 42 U.S.C. 2000a et seq. ..........................................9
`
`
`
`42 U.S.C. 2000a-3(b)................................................ 9, 28
`
`
`
`Tit. VII, 42 U.S.C. 2000e et seq. .....................................30
`
`
`
`
`
`42 U.S.C. 2000e-5(k)....................................................27
`
`
`
`Copyright Act of 1976, 17 U.S.C. 505 ...................................20
`
`
`
`Lanham Act, 15 U.S.C. 1117(a) ................................... 3, 22, 23
`
`Patent Act of 1952, 35 U.S.C. 1 et seq.:
`
`35 U.S.C. 2(a)(1) ..................................................................1
`
`35 U.S.C. 2(b)(8) ..................................................................1
`
`
`
`35 U.S.C. 273 (Supp. V 2011) ...........................................27
`
` 
`
`
`35 U.S.C. 273(b) (Supp. V 2011)......................................32
`
`35 U.S.C. 273(f ) (Supp. V 2011)................................. 27, 29
`
`
`
`  
`35 U.S.C. 281 ........................................................................2
`
`35 U.S.C. 282 (2006 & Supp. V 2011)..............................32
`
`
`
`35 U.S.C. 285 ............................................................. passim
`
`5 U.S.C. 504(a)(1).....................................................................28
`
`
`
`11 U.S.C. 523(d) .......................................................................28
`
`
`
`15 U.S.C. 15(a) ...........................................................................9
`
`
`15 U.S.C. 1692k(a)(3) ................................................................8
`
`20 U.S.C. 1617 (1976) ..............................................................28
`
`
`28 U.S.C. 1295(a)(1) (Supp. V 2011) ......................................16
`
`
`
`28 U.S.C. 1447(c)................................................................ 27, 30
`
`
`
`28 U.S.C. 1498(a) .....................................................................28
`
`
`
`28 U.S.C. 2412(d)(1)(A)....................................................... 8, 28
`
`
`
`
`
`
`
`
`
`
`

`
`
`IX
`
`
`
`Page
`
`Statutes and rules—Continued:
`
`
`42 U.S.C. 1983 .......................................................................... 30
`
`
`
`42 U.S.C. 1988 (1988) .............................................................. 28
`
`
`
`Fed. R. Civ. P.:
`
`
`Rule 16(f ) ........................................................................... 28
`
`  
`Rule 37(a)(5)(A)(iii) ........................................................... 28
`
`
`
`
`Miscellaneous:
`
`
`7 Donald S. Chisum, Chisum on Patents (1999) ................. 15
`
`
`
`
`
`
`92 Cong. Rec. 9188 (1946)....................................................... 10
`
`
`98 Cong. Rec. (1952):
`
`
`
`p. 9097 ................................................................................. 15
`
`
`
`p. 9323 ................................................................................. 15
`
`Exec. Office of the President, Patent Assertion and
`
`U.S. Innovation (June 2013)............................................... 19
`
`
`
`P.J. Federico, Commentary on the New Patent Act,
`
`
`
`
`75 J. Pat. & Trademark Off. Soc’y 161 (1993)................... 15
`
`Gov’t Accountability Office, Report No. GAO-11-465,
`
`Intellectual Property: Assessing Factors that Af­
`fect Patent Infringement Litigation Could Help
`
`Improve Patent Quality (Aug. 2013)........................... 18, 20
`
`
`
`
`
`Richard J. Leighton, Awarding Attorney’s Fees In
`
`
`“Exceptional” Lanham Act Cases: A “Jumble” of
`
`
`“Murky” Law, 102 Trademark Rep. (2012)...................... 31
`
`
`3 Oxford English Dictionary (1933)....................................... 9
`
`
`
`
`Patent Law Codification and Revision: Hearings
`
`Before Subcomm. No. 3 of the House Comm. on the
`
`Judiciary, 82d Cong., 1st Sess. (1951) .............................. 15
`
`
`
`
`
`S. Rep. No. 1503, 79th Cong., 2d Sess. (1946).................. 3, 10
`
`
`
`S. Rep. No. 1979, 82d Cong., 2d Sess. (1952) ....................... 14
`
`
`
`U.S. Patent No. 6,019,710 (filed Jan. 6, 1998)................ 3, 4, 5
`
`
`
`
`
`

`
`X
`
`Miscellaneous—Continued:
`Webster’s New International Dictionary of the Eng­
`lish Language (2d ed. 1958) ..................................................9
`
`
`
`
`Webster’s Ninth New Collegiate Dictionary (1985).............9
`
`
`
`
`
`Page
`
`
`
`
`
`
`
`

`
`
` In the Supreme Court of the United States
`
`
`
`
`No. 12-1184
`
`OCTANE FITNESS, LLC, PETITIONER
`
`
` v.
`
`ICON HEALTH & FITNESS, INC.
`
`
`
`
`ON WRIT OF CERTIORARI
`
`TO THE UNITED STATES COURT OF APPEALS
`
`FOR THE FEDERAL CIRCUIT
`
`
`BRIEF FOR THE UNITED STATES
`
`
`AS AMICUS CURIAE SUPPORTING PETITIONER
`
`
`
`
`
`
`
`
`
`
`
`INTEREST OF THE UNITED STATES
`
`This case concerns the interpretation of 35 U.S.C.
`285, which authorizes district courts to award attor-
`ney’s fees in lawsuits under the Patent Act. The
`
`Court’s decision may affect the practical operation of
`the patent system by increasing the disincentives for
`litigants to pursue unreasonable or abusive litigation
`tactics. The United States Patent and Trademark
`Office is responsible for issuing patents and—through
`the Secretary of Commerce—advising the President
`on issues of patent policy. See 35 U.S.C. 2(a)(1) and
`(b)(8). Several other agencies of the federal govern-
`ment also have a strong regulatory interest in improv-
`
`ing the efficacy of the patent system and in reducing
`the costs and burdens of patent litigation. The United
`
`(1)
`
`

`
`2
`
`
`
`
`
`
` States therefore has a substantial interest in the
`Court’s resolution of the question presented.
`STATEMENT
`This case involves the interpretation of 35 U.S.C.
`285, which authorizes a district court to award attor-
`ney’s fees in patent litigation. Section 285 is intended
`to deter abusive litigation and to compensate prevail-
` ing parties for their litigation expenses in appropriate
`
`circumstances. The lower courts denied the fee re-
`quest at issue here under a restrictive test that re-
`quires a prevailing defendant to prove, by “clear and
`convincing evidence,” that the plaintiff’s claim of in-
` 
`
`fringement was both “objectively baseless” and
`brought in “subjective bad faith.” Pet. App. 21a (cita-
`tion omitted).
`1. The Patent Clause of the Constitution empowers
`Congress “[t]o promote the Progress of Science and
`
`useful Arts, by securing for limited Times to * * *
`
`
`Inventors the exclusive Right to their * * * Dis-
`coveries.” U.S. Const. Art. I, § 8, Cl. 8. Title 35 es-
`tablishes the statutory framework governing the issu-
`ance of patents, and it grants a patentee “remedy by
`civil action for infringement of his patent.” 35 U.S.C.
`281. The Act also authorizes a prevailing party in a
`patent action to seek attorney’s fees. 35 U.S.C. 285.
`Until 1946, patent lawsuits were subject to the
`“American Rule,” under which “[e]ach litigant pays
`his own attorney’s fees, win or lose.” Marx v. General
`Revenue Corp., 133 S. Ct. 1166, 1175 (2013) (citation
`omitted; brackets in original); see, e.g., Teese v. Hun­
`tingdon, 64 U.S. (23 How.) 2, 8 (1860). That year,
`Congress enacted a new provision declaring that a
`district court could, in its discretion, award reasonable
`attorney’s fees to the prevailing party. Act of Aug. 1,
`
`
`
`
`
`
`

`
`3
`
`
`1946 (1946 Act), ch. 726, 60 Stat. 778 (35 U.S.C. 70
`(1946)). The provision was not intended to make fee-
`shifting “an ordinary thing in patent suits,” but it
`granted broad discretion to award fees, both to deter
`infringement and “to prevent a gross injustice to an
`alleged infringer.” S. Rep. No. 1503, 79th Cong., 2d
`Sess. 2 (1946) (1946 Senate Report).
`In the Patent Act of 1952, Congress reorganized
`the patent laws and, in doing so, made non-substantive
`changes to the fee-shifting provision “for purposes of
`clarification only.” General Motors Corp. v. Devex
`Corp., 461 U.S. 648, 653 n.8 (1983). As revised and
`codified at 35 U.S.C. 285, the new provision declared
`that “[t]he court in exceptional cases may award rea-
`sonable attorney fees to the prevailing party.” That
`version of Section 285 remains in effect today.1
`
` 2. Petitioner and respondent compete in the mar-
`
`ket for elliptical exercise machines. Pet. 2-3; Pet.
`App. 27a. Petitioner sells two lines of elliptical ma-
`chines, the Q45 and the Q47. Id. at 5a. Respondent is
`
`the assignee of U.S. Patent No. 6,019,710 (filed Jan. 6,
`1998) (the ’710 patent), which discloses an elliptical
`machine that employs a specific arrangement of rails
`and linking components. Pet. App. 32a. In April 2008,
`respondent brought this civil patent-infringement
`action, alleging that petitioner’s machines practiced
`the invention claimed in the ’710 patent. Pet. 11.
`After construing the asserted patent claims, see
`Pet. App. 62a-86a (Markman order), the district court
`
`granted petitioner’s motion for summary judgment of
`non-infringement, id. at 31a-61a. The court conclud-
`
`1
`
`
` In 1974, Congress added an identical attorney’s fee provision to
` the Lanham Act, which governs trademarks and false advertising.
`
`
`
`
`
`See 15 U.S.C. 1117(a).
`
`
`
`
`
`

`
`4
`
`
`ed, inter alia, that respondent had cited “no evidence
`that any part of [petitioner’s] machines” generate
`elliptical motion by “linear reciprocating displace-
`ment,” either literally or under the doctrine of equiva-
`lents, as required by the asserted claims of the ’710
`patent. Id. at 51a; see id. at 51a-53a. The court also
`held that “no reasonable jury could find” that peti-
`tioner’s machines incorporated a “stroke rail” of the
`type disclosed in the ’710 patent, either literally or by
`equivalents. Id. at 57a; see id. at 55a-58a.
`
`3. Following the district court’s entry of judgment,
`Pet. App. 29a-30a, petitioner requested an award of
`attorney’s fees under 35 U.S.C. 285. The court denied
`the motion. Pet. App. 19a-28a.
`The district court explained that, under Federal
`Circuit precedent, a prevailing party must establish
`the prerequisites to a Section 285 fee award “by clear
`and convincing evidence.” Pet. App. 20a (citing Forest
`Labs., Inc. v. Abbott Labs., 339 F.3d 1324, 1327 (Fed.
`
`Cir. 2003), cert. denied, 540 U.S. 1109 (2004)). The
` 
`court held that “ ‘[a]bsent misconduct during patent
`
`prosecution or litigation,’ a case is exceptional ‘only if
`both (1) the litigation is brought in subjective bad
`faith, and (2) the litigation is objectively baseless.’”
` 
`Id. at 21a (quoting iLOR, LLC v. Google, Inc., 631
`F.3d 1372, 1377 (Fed. Cir. 2011)); see Brooks Furni­
`ture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378,
`1381 (Fed Cir. 2005). It defined an “objectively base-
`less” claim as one that is “so unreasonable that no
`reasonable litigant could believe [it] would succeed,”
`and explained that “subjective bad faith” requires that
`the plaintiff “actually know” that its claim has “no
`objective foundation.” Pet. App. 21a, 25a (quoting
`iLor, 631 F.3d at 1377, 1378).
`
`
`
`
`
`
`
`

`
`5
`
`
`The district court found that petitioner had not sat-
`isfied either of Section 285’s requirements. Pet. App.
`22a-28a.
`It determined that respondent’s various
`theories of infringement—though ultimately lacking
`merit—were neither “frivolous” nor “objectively base-
`less.” Id. at 22a-25a. It likewise rejected the conten-
`tion that respondent had made misleading and base-
`less arguments in its summary-judgment briefing. Id.
`
`at 24a-25a.
`Finally, the district court rejected petitioner’s ar-
`gument that respondent had brought this infringe-
`ment suit in subjective bad faith. Pet. App. 26a-28a.
`
`The court found no evidence of bad faith in emails in
`which respondent’s employees had discussed the com-
`petitive business advantages of filing the lawsuit and
`
`described the ’710 patent as an “old patent we had for
`a long time that was sitting on the shelf.” Id. at 26a-
`
`27a. Such “stray comments,” the court explained, “do
`not tend to prove that the company’s leadership and
`counsel pursued the lawsuit in bad faith.” Id. at 27a.
`
`“In sum,” the court concluded, “[t]his case is not ex-
`ceptional, and an award of attorney’s fees is not war-
`ranted.” Id. at 28a.
`
`4. Respondent appealed the judgment of non-
`infringement, and petitioner cross-appealed the dis-
`trict court’s denial of fees under Section 285. The
`Federal Circuit affirmed the district court’s judgment
`in all respects. Pet. App. 1a-17a. As relevant here,
`the court of appeals rejected petitioner’s argument
`that the district court had “applied an overly restric-
`tive standard” under Section 285. Id. at 17a. The
`court explained that it had “reviewed the record and
`conclude[d] that the [district] court did not err in
`
`
`
`
`
`
`
`
`
`

`
`6
`
`
`denying [petitioner’s] motion to find the case excep-
`tional.” Ibid.
`
`
`
`SUMMARY OF ARGUMENT
` The Patent Act authorizes district courts to award
`
`attorney’s fees to prevailing parties “in exceptional
`
` cases.” 35 U.S.C. 285. The text and history of that
`provision make clear that, although fees should not be
`awarded in the typical patent case, district courts
`possess broad equitable discretion to consider all
`relevant circumstances in determining whether a
`
`particular case is “exceptional.”
`Congress first authorized fee-shifting in a 1946
`provision that authorized a district court to award fees
`to prevailing parties “in its discretion.” The legis-
`lative history of that provision reflected Congress’s
`intent to authorize such awards to deter patent in-
`fringement and to prevent “gross injustice” to inno-
`cent alleged infringers. Courts applied the provision
`in accordance with that intent. In a series of decisions
`between 1946 and 1952, they authorized fee awards to
`prevailing defendants in a range of circumstances
`involving pre-litigation misconduct, abusive litigation
`tactics, and plaintiffs’ reliance on groundless legal
`theories. In doing so, courts applied a flexible,
`totality-of-circumstances analysis
`that considered
`whether such conduct was grossly unjust to the de-
`
`fendant.
`When Congress enacted Section 285 as part of the
`Patent Act of 1952, it legislated against that backdrop.
`Although the new fee-shifting provision included the
`“exceptional cases” language, and lacked the 1946
`provision’s explicit reference to the court’s “discre-
`tion,” it was neither intended nor understood to nar-
`
`
`
`
`
`
`
`

`
`7
`
`
`row the circumstances in which fees would be appro-
`priate.
`Section 285 should therefore be construed to au-
`thorize a fee award to a prevailing defendant when a
`district court determines—based on its analysis of the
`totality of circumstances present in each case—that
`such an award is necessary to prevent gross injustice
`to that defendant. That flexible approach is similar to
`this Court’s interpretation of a similar fee-shifting
`provision in the Copyright Act, and to the majority
`view of the identical fee-shifting provision in the Lan-
`ham Act.
`Instead of rooting its analysis in the text or history
`of Section 285, the Federal Circuit has purported to
`borrow the two-prong test this Court has used to
`determine, for purposes of the Noerr-Pennington
`doctrine of antitrust law, whether particular litigation
`is a “sham.” The Federal Circuit’s test requires (1) a
`rigid and demanding threshold showing that a claim
`was objectively without justification; (2) independent
`
`evidence of the plaintiff’s subjective state of mind in
` 
`bringing the baseless claim; and (3) proof of these
`elements by “clear and convincing evidence.” These
`requirements have diminished Section 285’s effective-
`ness as a tool to discourage abusive patent litigation
`and mitigate injustice suffered by prevailing parties in
`particular cases. This Court should reject the Federal
`Circuit’s analysis, make clear that district courts have
`broad discretion to award fees in exceptional cases in
`accordance with equitable principles, and vacate the
`judgment below.
`
`
`
`
`
`
`
`

`
`8
`
`ARGUMENT
`
`SECTION 285 EMPOWERS DISTRICT COURTS TO
`AWARD ATTORNEY’S FEES TO PREVENT GROSS IN-
`JUSTICE
`
`A. Section 285 Is A Broad Grant Of Discretionary Au-
`
`thority To District Courts
`The text and history of Section 285 establish Con-
`gress’s intent to vest district courts with broad discre-
`tion when deciding whether to make fee awards in
`patent cases.
`
`1. Section 285 declares that a district court “may
`35
`award” attorney’s fees “in exceptional cases.”
`U.S.C. 285. Unlike some other federal fee-shifting
`statutes, this language does not dictate the criteria
`the court must consider when deciding whether to
`award fees.2 Rather, the statement that a court “may
`
`award” fees empowers the court to exercise judgment
`in deciding whether fees are justified in any particular
`case. As this Court has recognized in interpreting
`similar fee-shifting provisions, “[t]he word ‘may’ clear-
`ly connotes discretion.” Martin v. Franklin Capital
`
`Corp., 546 U.S. 132, 136 (2005) (brackets in original)
`(quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 533
`(1994)).
`The only textual constraint on the district court’s
`exercise of this discretion is the requirement that the
`
`case must be “exceptional.” 35 U.S.C. 285. That lan-
`guage makes clear that the American Rule will con-
`
`tinue to govern the allocation of fees in the mine run
`of patent-infringement disputes. 3 In and of itself,
`
`
`
`
`
` 2 Cf., e.g., 28 U.S.C. 2412(d)(1)(A); 15 U.S.C. 1692k(a)(3).
`
`3 This Court has contrasted Section 285’s “exceptional cases”
`
`
`
`
`
`
`limitation with the mandatory fee-shifting provision of the anti-
`
`
`
`

`
`9
`
`
`however, the word “exceptional” does not limit the
`factors a district court may consider in determining
`whether fees should be awarded in a particular case.
`The standard meaning of “exceptional” is “not or-
`dinary,” “uncommon,” or “rare.” Webster’s New In­
`ternational Dictionary of the English Language 889
`
`(2d ed. 1958).4 As then-Judge Ginsburg explained 4
`
`when interpreting the identical provision of the Lan-
`ham Act, the word “exceptional” in this context “is
`most reasonably read to mean what the word is gen-
`erally understood to indicate—uncommon, not run-of-
`the-mine.” Noxell Corp. v. Firehouse No. 1 Bar-B-
`
`Que Rest., 771 F.2d 521, 526 (D.C. Cir. 1985) (joined
` 
`by then-Judge Scalia); cf. Bilski v. Kappos, 130 S. Ct.
`3218, 3226 (2010) (“In patent law, as in all statutory
`
`
`
`construction, * * * words will be interpreted as
`taking their ordinary, contemporary, common mean-
`ing.”) (internal quotation marks and citation omitted).
`2. The history and subsequent judicial implemen-
`tation of the 1946 Act provide the backdrop against
`which Section 285 was enacted in 1952. The 1946 Act
`stated that a court “may in its discretion award rea-
`
`sonable attorney’s fees to the prevailing party upon
`the entry of judgment on any patent case.” 60 Stat.
`778. The accompanying Senate committee report
`
`explained:
`
`
` trust laws, 15 U.S.C. 15(a), and the attorney’s fee provision of Title
`
`II of the Civil Rights Act of 1964, 42 U.S.C. 2000a-3(b), which this
`Court has interpreted to require a fee award absent exceptional
`
`
`
`circumstances. Alyeska Pipeline Serv. Co. v. Wilderness Soc’y,
`
`421 U.S. 240, 261-262 (1975).
`4 See, e.g., Webster’s Ninth New Collegiate Dictionary 432
`
`(1985) (“deviating from the norm”); 3 Oxford English Dictionary
`
`
`374 (1933) (“out of the ordinary course, unusual, special”).
`
`
`

`
`10
`
`
`It is not contemplated that the recovery of attor-
`ney’s fees will become an ordinary thing in patent
`suits, but the discretion given the court in this re-
`spect, in addition to the present discretion to award
`
`triple damages, will discourage infringement of a
`patent by anyone thinking that all he woul