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.

Gilead contends that there were better and more efficacious alternatives such as Viread® and another generic product that were on the doorstep of entering the market. As previously discussed, it is within the court's discretion whether or not to award attorney's fees. Machinery Corp. of Am., 774 F.2d at 471; Badalamenti v. Dunham's, Inc., 896 F.2d 1359, 1364 (Fed. Cir. 1990). It is equally clear that the defendant bears the burden of proving, by clear and convincing evidence, that this case is exceptional.

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.

" The purpose of the statute is to allow the district court discretion to award 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) (quoting J.P. Stevens Co., Inc. v. Lex Tex Ltd., 822 F.2d 1047, 1052 (Fed. Cir. 1987)) (internal quotation marks omitted). Congress intended that district courts use this discretion sparingly, as the statute is a departure from the usual "American" rule that counsel fees are not awarded to the prevailing party in an action at law.

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.”

Thus, we hold only that the district court should have addressed Upjohn's assertion of willful infringement and its position on the matter of collateral estoppel. We decline to decide these issues in the first instance. Cf. Badalamenti v. Dunham's, Inc., 896 F.2d 1359, 13 USPQ2d 1967 (Fed. Cir. 1990) ("The finding of `exceptional case' is one of fact, and must be made in the first instance by the district court.") Accordingly, we remand them to the district court. C

The imposition of sanctions for misconduct during discovery is not unique to this court's jurisdiction. See, e.g., Wexell v. Komar Indus., Inc., 18 F.3d 916, 919, 29 USPQ2d 2017, 2020 (Fed. Cir. 1994) (reviewing discovery sanctions under Sixth Circuit standards); Badalamenti v. Dunham's, Inc., 896 F.2d 1359, 1362, 13 USPQ2d 1967, 1970 (Fed. Cir. 1990) (same). Accordingly, this court applies the law of the pertinent regional circuit, in this case the United States Court of Appeals for the Sixth Circuit. See Pro-Mold Tool Co. v. Great Lakes Plastics, Inc., 75 F.3d 1568, 1574, 37 USPQ2d 1626, 1631 (Fed. Cir. 1996).

See J.P. Stevens Co. v. Lex Tex Ltd., 822 F.2d 1047, 1050, 3 USPQ2d 1235, 1237 (Fed. Cir. 1987). The first step concerns a question of fact which we review for clear error, see Badalamenti v. Dunham's Inc., 896 F.2d 1359, 1364, 13 USPQ2d 1967, 1972 (Fed. Cir.), cert. denied, 498 U.S. 851, 111 S.Ct. 142, 112 L.Ed.2d 109 (1990), and the second lies within the discretion of the trial judge, which we review for abuse, see Mathis v. Spears, 857 F.2d 749, 754, 8 USPQ2d 1029, 1033 (Fed. Cir. 1988).