On May 5, 2014, the Supreme Court granted certiorari in this matter, vacated judgment of the Federal Circuit, and remanded for consideration under Octane Fitness and Highmark. Kobe Props. SARL v. Checkpoint Sys., Inc., 134 S. Ct. 2134 (2014). On remand, the Federal Circuit discussed the new standard, vacated judgment of this Court, and remanded to determine whether the case is exceptional on application of the totality of the circumstances standard established by the Supreme Court. Checkpoint Sys., Inc. v. All-Tag Sec. S.A., 572 F. App'x 988, 989 (Fed. Cir. 2014) [hereinafter Fed. Cir. Op. II]. The parties have since filed supplemental briefing on Defendants' renewed motions for exceptional case findings and for attorney's fees.
AllโTag sought certiorari, which was granted, with the opinion vacated, and remanded to this court, Kobe Properties SARL v. Checkpoint Sys., Inc. , โโโU.S. โโโโ, 134 S.Ct. 2134, 188 L.Ed.2d 1121 (2014), in conjunction with the Supreme Court's decisions on fee-shifting in Octane Fitness, LLC v. ICON Health & Fitness, Inc. , โโโ U.S. โโโโ, 134 S.Ct. 1749, 188 L.Ed.2d 816 (2014), and Highmark Inc. v. Allcare Health Management System, Inc. , โโโ U.S. โโโโ, 134 S.Ct. 1744, 188 L.Ed.2d 829 (2014).On remand from the Supreme Court, we remanded to the district court for further consideration of the attorney fee award in light of the Court's decisions. Checkpoint Sys., Inc. v. AllโTag Security S.A. , 572 Fed.Appx. 988 (Fed. Cir. 2014). In the remand order, we instructed the district court to "consider the guidance from our prior opinion in which we explained that tests or experiments on the actual accused products are not always necessary to prove infringement."
"In those cases, the Court (i) rejected our precedent under ยง 285 that required both a showing of subjective bad faith and objective baselessness to find a case exceptional, (ii) lowered the burden of proof for proving a case exceptional, and (iii) changed the standard of review on appeal." Checkpoint Sys. v. All-Tag Sec. S.A., 572 F. App'x 988, 989 (Fed. Cir. 2014). As the district court applied our prior precedent under ยง 285, we vacate the district court's decision on this issue and remand for further consideration of whether the case should be deemed exceptional under 35 U.S.C. ยง 285, in light of the Supreme Court's guidance from Highmark and Octane Fitness.
In some cases decided under the old Brooks Furniture standard, we have remanded for the district court to consider whether the case is "exceptional" in light of the new Octane Fitness standard. See, e.g., Checkpoint Sys., Inc. v. All-Tag Sec. S.A., 572 F. App'x 988 (Fed. Cir. 2014). A remand is not necessary here because neither the defendants nor the district court has suggested any basis for awarding fees other than the lack of objective reasonableness, and the resulting bad faith from continuing to litigate an objectively baseless position.
505 U.S. at 559. Cf. Checkpoint Sys., Inc. v. All-Tag Sec. S.A., Civil Action No. 01-CV-2223, 2011 WL 5237573, at *5 (Nov. 2, 2011), vacated on other grounds, 572 F. App'x 988 (Fed. Cir. 2014) (finding that a "litigation success bonus" was unreasonable, since it "represent[ed] a form of duplication of the amounts allegedly paid to compensate Pepper Hamilton counsel for work performed in defending the lawsuit"). While ABS makes a persuasive case distinguishing itself from the facts in Barrow v. Falck, 977 F.2d 1100 (7th Cir. 1992), on which defendants principally rely in opposing this fee enhancement, ABS's reply underscores the problem with its claim for a "success bonus."
On remand, the Federal Circuit discussed the new standard, vacated judgment of this Court, and remanded to this Court to determine whether the case is exceptional. Checkpoint Sys., Inc. v. All-Tag Sec. S.A., 572 F. App'x 988, 989 (Fed. Cir. 2014). On remand, this Court again took up the question of whether the underlying patent case was "exceptional" under Section 285.