Id. Similarly, in Badalamenti v. Dunhams, Inc., 896 F.2d 1359, 1364-65, 13 USPQ2d 1967, 1971-72 (Fed. Cir. 1990), because the district court was silent on the exceptional case issue and fee denial, we were "unable to review the decision of the district court on this issue." Recognizing that a remand was "unfortunate", we went on to eschew any suggestion that the case be found exceptional, noting that defendant's primary basis for requesting fees had disappeared and that, even if the case be found exceptional, a denial of fees remained discretionary with the district court.

An award of fees is a two-step process. First, the court must find that the case is an "exceptional case". If the court determines an exceptional case exists, it then, in its discretion, must decide whether to award attorney's fees. Badalamenti v. Dunham's, Inc., 896 F.2d 1359, 1365 (Fed. Cir. 1990) ( Badalamenti). The party seeking an exceptional case status has the burden of proving that its case is exceptional by clear and convincing evidence.

An award of fees is a two step process. First, the court must find that the case is an "exceptional case". If the court determines an exceptional case exists, it then, in its discretion, must decide whether to award attorney's fees. Badalamenti v. Dunham's, Inc., 896 F.2d 1359, 1365 (Fed. Cir. 1990) (Badalamenti). The party seeking an exceptional case status has the burden of proving that its case is exceptional by clear and convincing evidence.

First, it permits an award of fees "where it would be grossly unjust that the winner be left to bear the burden of his own counsel which prevailing litigants normally bear." Badalamenti v. Dunham's Inc., 896 F.2d 1359, 1364 (Fed. Cir. 1990), cert. denied 498 U.S. 851, 111 S.Ct. 142, 112 L.Ed.2d 109 (1990) (quoting J.P. Stevens Co. v. Lex Tex Ltd., 822 F.2d 1047, 1052 (Fed. Cir. 1987)) (emphasis in original). Thus, under § 285, an award of attorneys' fees compensates the prevailing party for losses incurred as the consequence of the conduct of the losing party.

Plaintiff asserts these discrepancies are attributable to the lapse of time between the sale of the prototypes in 1981 and 82 and the preparation of the declaration in October 1984. Plaintiff states they may have been careless, negligent, or inattentive in attempting to review 2-3 year old sales records but that doesn't amount to intent to deceive. Plaintiff asserts that this is not an "exceptional case" warranting attorney's fees. Plaintiff asserts that the purpose of 35 U.S.C. § 285 is to provide the district court with the discretion to award attorneys fees where it would be grossly unjust for the winner be left to bear the burden of his counsel fees. Badalamenti v. Dunham's, Inc., 896 F.2d 1359, 1364 (Fed. Cir. 1989). Plaintiff contends that the cases cited by the defendant are distinguishable and this court should follow Western Marine Electronics v.Furuno Electric Co., Ltd., 764 F.2d 840, 842 (Fed. Cir. 1985) where the court affirmed the district court's denial of attorney's fees in an action involving the on-sale bar issue even though the district court had determined that the patentee had not been forthright in producing certain documents and that some of its interrogatory answers may have been deliberately misleading.

Here, however, there is intervening relevant Supreme Court authority which, we think, would lead the Second Circuit to follow other circuits which have held that the Octane standard applies to the Lanham Act. See Badalamenti v. Dunham's, Inc. , 896 F.2d 1359, 1362 (Fed. Cir. 1990) ("[I]f the regional circuit court has not spoken, we must predict how that court would decide the issue...."). The Second Circuit in Penshurst Trading Inc. v. Zodax L.P., 652 Fed.Appx. 10 (2d Cir. 2016), held that "[w]e have not yet decided whether [the Octane ] rule applies in the context of the Lanham Act, but we need not do so here ... [because] we [would] affirm the district court's denial of attorney's fees" under either Octane or Louis Vuitton.

The purpose of section 285, unlike that of Rule 11, is not to control the local bar's litigation practices—which the district court is better positioned to observe—but is remedial and for the purpose of compensating the prevailing party for the costs it incurred in the prosecution or defense of a case where it would be grossly unjust, based on the baselessness of the suit or because of litigation or Patent Office misconduct, to require it to bear its own costs. SeeBadalamenti v. Dunham's, Inc., 896 F.2d 1359, 1364 (Fed.Cir.1990); Cent. Soya Co., Inc. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1578 (Fed.Cir.1983). As Seagate noted, under the subjective prong, “to establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.”

EMS argues that the district court issued no factual findings as to whether this was an "exceptional case" and thus a remand was necessary to allow the court to make the requisite findings of fact and to decide whether an award of attorney fees was warranted. In support of its argument, EMS relies upon our decisions in Badalamenti v. Dunham's Inc., 896 F.2d 1359, 13 USPQ2d 1967 (Fed.Cir.1990), Fromson v. Western Litho Plate and Supply Co., 853 F.2d 1568, 7 USPQ2d 1606 (Fed.Cir.1988), and S.C. Johnson & Sons, Inc. v. Carter-Wallace, Inc., 781 F.2d 198, 228 USPQ 367 (Fed.Cir.1986), in which remand was deemed necessary for further "exceptional case" findings. Those cases, however, are distinguishable from the instant case.

The purpose of section 285, unlike that of Rule 11, is not to control the local bar's litigation practices—which the district court is better positioned to observe—but is remedial and for the purpose of compensating the prevailing party for the costs it incurred in the prosecution or defense of a case where it would be grossly unjust, based on the baselessness of the suit or because of litigation or Patent Office misconduct, to require it to bear its own costs. See Badalamenti v. Dunham's, Inc., 896 F.2d 1359, 1364 (Fed. Cir. 1990); Cent. Soya Co., Inc. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1578 (Fed. Cir. 1983). 1. Exceptional Case

Moreover, the "purpose of section 285 'is to provide discretion where it would be grossly unjust that the winner be left to bear the burden of his own counsel which prevailing litigants normally bear.'" Badalamenti v. Dunham's. Inc., 896 F.2d 1359, 1364 (Fed. Cir. 1990) (quoting J.P. Stevens Co. v. Lex Tex Ltd., 822 F.2d 1047, 1052 (Fed. Cir. 1987)) (emphasis in original). As such, "[t]o award attorneys' fees, the Court must find that Defendants have demonstrated by clear and convincing evidence that [the plaintiff's] litigation conduct was so egregious that attorneys' fees are warranted."