Federal Circuit Remands Trio of Attorneys’ Fee Award Cases Back to District Courts

Icon Health & Fitness, Inc. v. Octane Fitness, LLC; Checkpoint Systems, Inc. v. All-Tag Sec., S.A.; Highmark, Inc. v. Allcare Health Mgmt. Sys., Inc.

In the span of 10 days, and in the wake of the U.S Supreme Court decisions of last spring in Icon Health & Fitness, v. Octane  Fitness (IP Update, Vol. 17, No. 5) and Highmark v. Allcare Health Mgmt. Sys., Inc.  (IP Update, Vol.  17, No. 5),  the U.S Court of Appeals for the Federal Circuit issued a trio of non-precedential decisions, vacating the initial lower court opinions and remanding the cases back to their respective district courts with instructions to apply the new Supreme Court standards.  Icon Health & Fitness, Inc. v. Octane Fitness, LLC, Case No.11-1521, -1636 (Fed. Cir., Aug 26, 2014) (per curiam); Checkpoint Systems, Inc. v. All-Tag Sec., S.A., Case No. 12-1085 (Fed Cir., Sept 4, 2014) and Highmark, Inc. v. Allcare Health Mgmt. Sys., Inc.,Case No.11-1219 (Fed Cir, Sept. 5, 2014) (per curiam)

The Supreme Court, in its decisions in the Octane Fitness and Highmark cases, reversed the Federal Circuit’s standard for determination of an “exceptional case” under sec. 285  (Octane) as well as the standard of review to apply to an exceptional case determination on appeal (Highmark).  In the Octane decision the Supreme Court abrogated the Brooks Furniture two-part test, requiring both objective baselessness and subjective bad faith to support an exceptional case holding, as well as the clear and convincing evidence standard.  In their place, 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…” and should be determined by the district court, based on the totality of the circumstances and in the  exercise of the court’s discretion.  In the Highmark case, the Supreme Court abrogated the Federal Circuit’s  de novo standard of appellate review and replaced it with an abuse of discretion standard.

In the Octane remand, the instruction was simply to apply the new standard to the exceptional case determination.

In the Checkpoint case, the remand instruction was to reconsider the initial award of attorneys’ fees in light of the Octane case, but taking “guidance from [the Federal Circuit’s] prior opinion” (which overturned the initial $6.6 million award of attorneys’ fees).

In the Highmark case, rather than simply apply the new appellate standard of review announced by the Supreme Court, the Federal Circuit vacated the district court’s $4.7 million fee award and sent the case back “for reconsideration under the new standard articulated [by the Supreme Court] in Octane.”