Term: 2013
Docket: 12-1163
Highmark Inc. v. Allcare Health Mgmt. Sys.
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12-1163 HIGHMARK INC. V. ALLCARE HEALTH MANAGEMENT SYSTEMS DECISION BELOW: 687 F.3d 1300 CERT. GRANTED 10/1/2013 QUESTION PRESENTED: The Patent Act provides that a "court in exceptional cases may award reasonable attorney fees to the prevailing party." 35 U.S.C. § 285. A case is "exceptional" if it is objectively baseless and brought in bad faith. After living with this case for more than six years, the District Court found that it was objectively baseless and brought in bad faith, and it awarded fees. Over a strong dissent, a Federal Circuit panel reversed, holding that a district court's objective baselessness determination is reviewed "without deference." Pet. App. 9a. The Federal Circuit denied rehearing en banc by a vote of six to five. One of the two pointed dissents from that denial accurately observed that the decision below "deviates from precedent * * * and establishes a review standard for exceptional case findings in patent cases that is squarely at odds with the highly deferential review adopted by every regional circuit and the Supreme Court in other areas of law." Pet. App. 191a. The question presented is: Whether a district court's exceptional-case finding under 35 U.S.C. § 285, based on its judgment that a suit is objectively baseless, is entitled to deference. LOWER COURT CASE NUMBER: 2011-1219
The U.S. Supreme Court case Highmark Inc. v. Allcare Health Management System, 2013 revolved around the issue of attorney's fees in patent litigation cases. The dispute began when Highmark Inc., a health insurance company, sued Allcare Health for claiming that Highmark’s system infringed on one of its patents. However, it was determined that Allcare’s patent claim was baseless and thus they were ordered to pay Highmark's legal fees under Section 285 of the Patent Act which allows fee shifting in "exceptional" cases. The main point of contention at the Supreme Court level was who should determine whether a case is "exceptional" - district courts or appellate courts? The court ruled unanimously that an appeals court should apply an abuse-of-discretion standard when reviewing all aspects of a district court’s §285 determination i.e., only overturning such decisions if there has been a clear error in judgment by lower courts. This decision clarified how discretion over awarding attorneys' fees works within patent law and reinforced the authority given to trial judges while making these determinations.
In the HIGHMARK INC. v. ALLCARE HEALTH MGMT. SYS., 2013 case, there was no dissenting opinion recorded as the decision of the Supreme Court was unanimous (9-0). The court ruled in favor of Highmark Inc., stating that an appellate court should apply an abuse-of-discretion standard when reviewing a district court's determination of whether a case is "exceptional" under the Patent Act, which allows for awarding attorney fees to prevailing parties in "exceptional cases". This means that such decisions made by lower courts should only be overturned if they are found to have made a clear error in judgment or applied incorrect law, giving more deference to district courts' discretion.
