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Supreme Court Smacks Down CAFC Again: Says Courts Have More Free Rein In Awarding Attorneys Fees

from the this-text-is-patently-clear dept

Yet again (in what has become quite the trend), the Supreme Court has struck down a ruling by the appeals court for the Federal Circuit (CAFC) — the court that is somewhat infamous for almost always favoring patent maximalism. In a related pair of cases, the Supreme Court has now rejected the CAFC’s rather strict rules for awarding attorneys fees in bogus patent litigation. The Supreme Court, once again, seems positively mystified by the CAFC’s interpretation of patent law, and the fact that CAFC’s rules (which all but eliminated attorney fees) seemed to have no basis in the law at all.

As Justice Sotomayor’s ruling (representing a basically unanimous court — Justice Scalia didn’t want to be a part of some random footnotes) notes, the CAFC’s rules are way too “rigid” and go beyond what the law says (and what Congress intended).

The framework established by the Federal Circuit in Brooks Furniture is unduly rigid, and it impermissibly encumbers the statutory grant of discretion to district courts.

Our analysis begins and ends with the text of §285: “The court in exceptional cases may award reasonable attorney fees to the prevailing party.” This text is patently clear. It imposes one and only one constraint on district courts’ discretion to award attorney’s fees in patent litigation: The power is reserved for “exceptional” cases.

The problem, of course, is that CAFC redefined “exceptional” to mean something extreme — when there was “material inappropriate” behavior — which goes well beyond what “exceptional” means.

The Federal Circuit’s formulation is overly rigid. Under the standard crafted in Brooks Furniture , a case is “exceptional” only if a district court either finds litigation-related misconduct of an independently sanctionable magnitude or determines that the litigation was both “brought in subjective bad faith” and “objectively baseless.” 393 F. 3d, at 1381. This formulation superimposes an inflexible framework onto statutory text that is inherently flexible

Fee shifting is part of what’s being fought over in the current attempts at patent reform. While it’s good to see the Court make it slightly easier to get attorneys’ fees, it would be much better if Congress went even further in making it abundantly clear that bogus patent suits will lead to awards of attorneys fees.

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Comments on “Supreme Court Smacks Down CAFC Again: Says Courts Have More Free Rein In Awarding Attorneys Fees”

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Anonymous Coward says:

Our analysis begins and ends with the text of ?285: ?The court in exceptional cases may award reasonable attorney fees to the prevailing party.? This text is patently clear.

I can’t tell if this use of language was meant to use the dictionary version of patently (ie- obvious) or the IP version of patently (ie- novel and requiring protection). It actually works in either parse, though.

Kenneth Michaels (profile) says:

smack down *again*

Because the Federal Circuit has exclusive jurisdiction over patent cases, there is never a “circuit split” that would require the Supreme Court to pick a winning Circuit and losing Circuit on a point of law. In fact, there is never any reason for the Supreme Court to review the Federal Circuit unless the Supreme Court already disagrees with the Federal Circuit on a point of law.

So, every Supreme Court case will be a “smack down” of the Federal Circuit. But it still makes for a sensationalist headline I suppose.

Anonymous Coward says:

Scalia and the notes

Scalia has a monomania that interpretation of a law must rest solely on the pure text of the law. Most other judges believe that when that is ambiguous, it’s acceptable and helpful to look at legislative history to clarify the law’s meaning.

In this decision, the interpretation was made on the pure text, but Sotomeyor pointed out in three notes that this interpretation was additionally consistent with the legislative history Scalia was just being philosophically pissy, since the particular notes aren’t substantive to the decision.

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