## Facts

- ICON Health & Fitness, Inc. owned U.S. Patent No. 6,019,710 covering a linkage system used in elliptical exercise machines.
- ICON sued Octane Fitness, LLC for patent infringement in federal district court.
- The district court granted summary judgment of noninfringement for Octane.
- Octane, as the prevailing party, moved for attorney’s fees under 35 U.S.C. § 285.
- Applying Federal Circuit precedent, the district court denied fees because ICON’s suit was not objectively baseless, was not brought in subjective bad faith, and did not involve material inappropriate conduct.
- The Federal Circuit affirmed the denial, applying its *Brooks Furniture* framework and requiring proof by clear and convincing evidence.
- The Supreme Court granted certiorari to determine whether that framework improperly constrained § 285.

## Issues

1. Whether 35 U.S.C. § 285 permits attorney’s fees only upon a showing of “material inappropriate conduct” or litigation that is both objectively baseless and brought in subjective bad faith.
2. Whether § 285 requires that an “exceptional case” be proven by clear and convincing evidence.
3. What standard governs a district court’s determination that a patent case is “exceptional” for purposes of fee shifting under § 285.

## Decision

- The Supreme Court unanimously reversed and remanded.
- The Court held the Federal Circuit’s *Brooks Furniture* framework was unduly rigid and improperly limited district courts’ discretion under § 285.
- The Court defined an “exceptional” case as one that stands out from others based on the substantive strength of a party’s litigating position or the unreasonable manner in which the case was litigated.
- The Court held district courts must decide exceptionality case by case, considering the totality of the circumstances.
- The Court rejected the clear-and-convincing evidentiary requirement; § 285 imposes no heightened burden of proof.

## Legal Principles

- Under 35 U.S.C. § 285, the only statutory constraint on awarding fees is that the case be “exceptional.”
- “Exceptional” carries its ordinary meaning and includes cases that are uncommon or not ordinary in light of the merits or litigation conduct.
- A case may be exceptional due to unusually weak substantive positions (in law or fact) or because of unreasonable litigation behavior.
- District courts have discretion to determine exceptionality based on the totality of the circumstances, without a rigid two-part test.
- Exceptionality need not be shown by clear and convincing evidence; ordinary civil proof standards apply.

## Conclusion

The Court broadened district courts’ discretion to award attorney’s fees in patent cases by replacing the Federal Circuit’s rigid *Brooks Furniture* test with a flexible, totality-of-the-circumstances inquiry focused on whether a case stands out on the merits or the manner of litigation.


Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014)