The § 285 statute and its purpose
35 U.S.C. § 285 provides a single, concise rule: 'The court in exceptional cases may award reasonable attorney fees to the prevailing party.' Unlike most US litigation (where each party pays its own attorney fees under the 'American Rule'), § 285 authorizes fee-shifting in patent cases as a deterrent to abusive litigation. The statute applies in both directions — a prevailing defendant (who defeated the infringement claims) and a prevailing plaintiff (whose patent was upheld and infringed) can both seek § 285 fee awards against the opposing party. Fee-shifting under § 285 requires: (1) that the party seeking fees prevailed; (2) that the case is 'exceptional'; and (3) that the court exercises its discretion to award fees. The statute is permissive — courts 'may' award fees, not 'shall' — so even in an exceptional case, the court has discretion whether to award fees.
Octane Fitness: the flexible exceptional case standard
In Octane Fitness, LLC v. ICON Health & Fitness (S.Ct. 2014), the Supreme Court unanimously struck down the Federal Circuit's rigid Brooks Furniture test and replaced it with a flexible totality-of-circumstances standard. The Court held that an exceptional case is 'simply one that stands out from others with respect to the substantive strength of a party's litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.' The key departures from Brooks Furniture: (1) no requirement that both prongs (weak case + bad faith) be proven; either substantive weakness or unreasonable litigation conduct is sufficient; (2) the standard of proof is the preponderance of evidence, not clear and convincing evidence; (3) review is for abuse of discretion, not de novo (Highmark v. Allcare, decided the same day); (4) no single factor or combination of factors is required — courts look at the case as a whole. Octane Fitness significantly increased the frequency and size of § 285 fee awards.
Conduct that can make a case exceptional
After Octane Fitness, courts have found cases exceptional on a wide variety of grounds. Substantive weakness: filing suit with obviously meritless infringement claims; maintaining infringement arguments after the court's claim construction clearly eliminates infringement; advancing invalidity arguments that ignore settled law; making legal arguments directly contrary to binding precedent. Litigation misconduct: sending mass demand letters threatening litigation without reasonable investigation; failing to make required pre-filing investigations; engaging in discovery abuse (failing to produce documents, making meritless objections, excessive motion practice); making inconsistent claim positions; witness coaching or spoliation. The case need not involve both substantive weakness and misconduct — either alone can support an exceptional case finding. However, courts are careful not to penalize aggressive-but-legitimate litigation positions; the question is whether the position was objectively reasonable given the law and facts.
Impact on patent assertion entities
Octane Fitness has had particular impact on patent assertion entities (PAEs or 'patent trolls') — companies that acquire patents and assert them against accused infringers without practicing the patents. Because PAEs often rely on litigation threat value rather than the substantive strength of their claims, their litigation strategies can be more vulnerable to § 285 scrutiny. Several courts have awarded attorney fees against PAEs that filed suit on weak patents against multiple defendants, often with the goal of extracting nuisance-value settlements below the cost of defense. High-profile examples include fee awards against patent assertion entities whose infringement theories depended on claim constructions rejected by the court, or who dismissed cases just before dispositive motions to avoid adverse precedent. The existence of § 285 as a realistic enforcement mechanism (post-Octane Fitness) has changed the economics of NPE assertion and made defendants more willing to litigate rather than settle.
Practical implications for patent defendants
Post-Octane Fitness, § 285 is a more realistic tool for defendants. Strategies for defendants seeking fee awards: (1) Document the unreasonable aspects of the plaintiff's positions throughout litigation — courts look at the entire case, not just the final result; (2) Carefully oppose claim constructions that are clearly wrong under the intrinsic record; (3) When the plaintiff's case collapses after claim construction, move promptly for summary judgment and file a § 285 motion soon after prevailing; (4) Consider filing the § 285 motion while the case is fresh — courts are more likely to grant fees when the litigation unreasonableness is clear in their memory; (5) Compile evidence of objective weakness (e.g., prior claim construction rulings in other cases on the same patent, clear file history, prior art that was obviously known). Note: a defendant does not automatically get fees just by winning — the conduct must genuinely stand out; routine patent defenses, even aggressive ones, are not exceptional.
Frequently Asked Questions
What is an exceptional case under 35 U.S.C. § 285?
Under 35 U.S.C. § 285, 'the court in exceptional cases may award reasonable attorney fees to the prevailing party.' In Octane Fitness, LLC v. ICON Health & Fitness (S.Ct. 2014), the Supreme Court held that an 'exceptional' case 'is simply one that stands out from others with respect to the substantive strength of a party's litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.' Courts look at the totality of the circumstances — no single factor is required. Common bases for § 285 fee awards: assertion of objectively baseless infringement claims; maintaining litigation after learning the claims were meritless; discovery misconduct or vexatious litigation tactics; making frivolous invalidity defenses; or asserting claims in bad faith to extract a settlement. The standard for exceptional case review on appeal is abuse of discretion (confirmed in Highmark v. Allcare, S.Ct. 2014, the companion case to Octane Fitness).
What was the old Brooks Furniture test for exceptional cases?
Before Octane Fitness (2014), the Federal Circuit applied the rigid two-part Brooks Furniture test (Brooks Furniture Mfg. v. Dutailier Int'l, 2005): a case was 'exceptional' only if the district court found either (1) litigation-related misconduct — inequitable conduct, willful infringement, or failure to investigate before filing; or (2) that the case was both 'objectively baseless' and brought in 'subjective bad faith.' Both prongs of the second category required clear and convincing evidence. The Brooks Furniture test was widely criticized for setting too high a bar, making it nearly impossible to deter abusive patent litigation. The Supreme Court in Octane Fitness unanimously rejected Brooks Furniture as inconsistent with § 285's statutory text (which just says 'exceptional cases') and with comparable attorney fee statutes in other areas of law (like copyright's § 505). The new standard is more flexible: any case that 'stands out' can be exceptional, with no requirement of bad faith or clear and convincing evidence.
When can a defendant get attorney fees under § 285?
A defendant can receive § 285 fee awards when the plaintiff's case was objectively unreasonable (substantively weak with no reasonable basis) or when the case was litigated in an unreasonable manner. Common scenarios where defendants receive § 285 awards: (1) the plaintiff filed suit without adequately investigating whether the accused product actually infringed; (2) the plaintiff continued to litigate after the claims' weakness became clear (e.g., after the court issued a claim construction that eliminated infringement); (3) the plaintiff made inconsistent claim positions (arguing broad scope for infringement but narrow scope to avoid invalidity); (4) the plaintiff engaged in discovery abuse, made frivolous discovery motions, or unnecessarily multiplied proceedings; (5) the plaintiff was a patent assertion entity whose litigation model depended on extracting settlements rather than legitimate enforcement. The threshold is not mere loss — the case must genuinely stand out from others; not all weak cases are exceptional.
Can a patent owner (plaintiff) also get attorney fees under § 285?
Yes — § 285 applies to both parties. A prevailing patent owner can seek attorney fees from a defendant whose invalidity or non-infringement defenses were baseless or litigated in bad faith. Common scenarios where plaintiffs receive § 285 awards: (1) the defendant raised invalidity defenses it knew were meritless; (2) the defendant engaged in scorched-earth litigation tactics (voluminous frivolous motions, baseless discovery disputes, etc.); (3) the defendant failed to produce responsive documents and later tried to make them appear; (4) the defendant's conduct was objectively unreasonable given the strength of the plaintiff's case. In practice, defendants receive § 285 awards somewhat more frequently than plaintiffs in the current environment because abusive patent assertion by NPEs is a more commonly recognized problem. However, defendants who litigate unreasonably are equally subject to fee awards.
How is the amount of attorney fees calculated in a § 285 award?
Once a court finds the case exceptional and decides to award fees, it must determine the reasonable amount. The lodestar method is the standard approach: (reasonable hourly rate) × (hours reasonably expended). The court reviews billing records, may conduct a hearing, and may reduce the lodestar based on limited success. The prevailing party's billing records must document the fees sought. Courts typically award fees for all phases of litigation where the exceptional conduct occurred — if the case became exceptional after claim construction, fees from that point forward may be awarded; if the entire case was baseless, the full fees may be awarded. Fee awards in patent cases can be substantial — $500,000 to $3 million or more in complex cases — making § 285 a powerful deterrent against abusive litigation when properly applied.