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

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

Tue, Apr 29th 2014 8:07pm — Mike Masnick

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.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: attorneys fees, cafc, patents, supreme court

9 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Anonymous Coward, 29 Apr 2014 @ 10:48pm

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.
[ link to this | view in thread ]
That Anonymous Coward (profile), 29 Apr 2014 @ 11:38pm

Because if there were less cases, they'd have less to do.
Like cops who plant drugs on people they pull over, sometimes you gotta make sure you have something to do.
[ link to this | view in thread ]
That One Guy (profile), 30 Apr 2014 @ 1:30am

But, how are the ever-so-innovative patent trol- I mean 'N.P.E.'s supposed to survive if they constantly have to worry about having to actually pay should their targets fight back and win in court?

Think of the poor, starving parasites man!

/s
[ link to this | view in thread ]
Ninja (profile), 30 Apr 2014 @ 3:17am

In fact, the Government should pay for the costs of the party that is in financial disadvantage to level the field. If that party is found guilty then the costs will be properly awarded to that party.

Imagine the small guy being fully able to fight the bully? Of course this ain't happening anytime soon.
[ link to this | view in thread ]
madasahatter (profile), 30 Apr 2014 @ 6:05am

Nine Seniles ot CAFC
If we can still read and understand what we read what is YOUR PROBLEM?
[ link to this | view in thread ]
Kenneth Michaels, 30 Apr 2014 @ 6:56am

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.
[ link to this | view in thread ]
Anonymous Coward, 30 Apr 2014 @ 7:32am

What about when the patent office grants bogus patents, what then?
[ link to this | view in thread ]
Anonymous Coward, 30 Apr 2014 @ 9:56am

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.
[ link to this | view in thread ]
JEDIDIAH, 30 Apr 2014 @ 9:57am

Natural language fail.
I dunno. I see that and as a programmer think that it's completely meaningless. Both exceptional and reasonable both depend on interpretation and are likely to lead to precisely the situation the Supremes were complaining about.
[ link to this | view in thread ]