Fee Awards Loom Large in Patent Law 3 Years After Octane

Prior to the U.S. Supreme Court’s 2014 Octane Fitness decision, fee awards were seen as difficult to win and were therefore not requested nor granted often. The Octane decision stripped away rigid rules established by the Federal Circuit about when fee awards are appropriate and gave judges broad discretion to award fees when the losing party's case "stands out from others" or is litigated in an "unreasonable manner.” Since the decision, statistics show an increase in the number of fee requests and awards, which have made litigants more rigorous about presenting strong arguments. Law360 contacted Finnegan attorney Lionel M. Lavenue for this thoughts on fee awards since Octane. The effect of the Octane decision has been particularly notable with respect to non-practicing entities. Lavenue said "I think there’s no question that NPEs have changed their modus operandi. They’re being more careful now, since they know the risk is so much higher." He also said that in order to determine if it is worth the effort to seek attorneys' fees under Octane Fitness, he looks at every fee motion the judge has ruled on in the past and whether it was granted, and tries to discern what the judge considers to be an exceptional case. "That's an analysis you have to do separately and individually each time," he said. "Nobody knows exactly where that line is, and that line is different for every judge." When deciding whether to award fees, judges seem to be using criteria similar to those used to award sanctions under Rule 11 for bringing a baseless case without an adequate pre-filing investigation. Since sanctions have such harsh connotations, judges are often reluctant to impose sanctions and may be using attorneys' fees as a substitute. Lavenue said. "If they see that a case is extraordinary or even close to extraordinary, they may award fees, rather than Rule 11 sanctions."