RESPONDENT: Allcare Management Systems, Inc.
LOCATION: Highmark, Inc. Headquarters
DOCKET NO.: 12-1163
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT: United States Court of Appeals for the Federal Circuit
CITATION: 570 US (2013)
GRANTED: Oct 01, 2013
ARGUED: Feb 26, 2014
DECIDED: Apr 29, 2014
Facts of the case
The Patent Act allows a court to award reasonable attorneys fees in exceptional cases in which the lawsuit is objectively baseless and brought in bad faith. Allcare Management Systems, Inc. (Allcare) owns a patent that covers a computer-based method of generating treatment options based on symptom data entered by a physician. This process can help an insurance company determine whether to approve a particular treatment for a patient. In 2003, Highmark, Inc. (Highmark), a health insurance company, sought a declaratory judgment of non-infringement of Allcare's patent. Allcare filed a counterclaim and alleged that Highmark infringed on two sections of its patent. The federal district court awarded summary judgment in favor of Highmark. The court also found that Allcare had willfully pursued frivolous infringement claims and ordered it to pay Highmark's attorney's fees and costs. On appeal, the U.S. Court of Appeals for the Federal Circuit independently reviewed the district court's determination that Allcare's claims were objectively baseless. The appellate court affirmed the lower court's finding with respect to one of Allcare's claims and reversed the court regarding Allcare's second claim.
Did the appellate court apply an improper standard of review to the district court's determination that Allcare pursued objectively baseless claims against Highmark?
Media for Highmark v. Allcare Management SystemsAudio Transcription for Oral Argument - February 26, 2014 in Highmark v. Allcare Management Systems
Audio Transcription for Opinion Announcement - April 29, 2014 in Highmark v. Allcare Management Systems
The second opinion is Highmark v. Allcare Health Management Systems.
This case also involves Section 285.
The question in this case is whether an appellate court should accord deference to a district court's determination that litigation is ?objectively baseless? under the Federal Circuit?s standard for determining whether a case is exceptional.
Our holding in Octane resolves this case.
Octane rejects the Federal Circuit?s standard as unduly rigid and holds that District Courts may make the exceptional case determination under Section 285 in the exercise of their discretion.
In light of that holding, we know hold here that an appellate court should review all aspects of the District Court?s Section 285 determination for abuse of discretion.
The Section 285 inquiry is at heart a discretionary one and we have held that decisions on matters of discretion are traditionally reviewable for abuse of discretion.
The judgment of the United States Court of Appeals for the Federal Circuit is therefore vacated, and the case is remanded for further proceedings consistent with this opinion.
This is -- this opinion is for unanimous court.