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Octane Fitness Hits the Showers: Federal Circuit Affirms Attorneys’ Fees Award in Landmark Case

After an eight-year battle through the Federal Courts, the fight over attorneys’ fees in Octane Fitness v. ICON Health & Fitness has likely reached its end with the Federal Circuit upholding the hotly disputed $1.6 million award to Defendant Octane Fitness. This case previously made it up to the Supreme Court, which overturned the Federal Circuit’s prior standard for determining exceptional cases under 35 U.S.C. § 285. Following a remand to the District Court applying the new totality-of-the-circumstances test established by the Supreme Court, the parties again appealed to the Federal Circuit.

The Federal Circuit highlighted four key factual findings supporting the conclusion the case was exceptional:

  • The Plaintiff ICON initially included in the lawsuit a distributor of Defendant Octane’s fitness equipment “in order to increase costs to Octane”;
  • ICON failed to show that it performed a sufficient pre-suit analysis;
  • An internal email said ICON sued on an “[o]ld patent . . . that was sitting on the shelf” as a way to get royalties from their competitor; and
  • ICON did not commercialize the patent.

The Federal Circuit concluded that, because there was no clear error in the District Court’s analysis of the totality of the circumstances, the exceptional case determination was well within its discretion. The Federal Circuit’s opinion can be found here: ICON Health & Fitness, Inc. v. Octane Fitness, LLC, No. 2016-1047 (Fed. Cir. Aug. 25, 2017).

The factual findings emphasized by the Federal Circuit in this case provide more data in evaluating what may constitute an exceptional case under the Octane Fitness standard. Our previous coverage of developments in “exceptional case” precedent can be found here: “Pumping Up Exceptional Cases Under the Octane Fitness Standard.

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Andrew H. DeVoogd is a patent litigator and trial attorney whose practice encompasses a wide range of technologies. He represents major technology companies in International Trade Commission investigations, and shares his insights on Mintz's IP Viewpoints.