Octane Fitness, Brooklyn Park, Minnesota, was recently awarded $1.77 million in attorneys' fees and expenses for its defense in a patent infringement case brought by Icon Health & Fitness, Logan, Utah.
The U.S. District Court for the District of Minnesota issued the ruling on Sept. 1. (Read the ruling in full at the bottom of this page.) The court concluded that Octane was entitled to $1.63 million in attorney fees and costs of $144,697.
“We are grateful to have prevailed against this meritless litigation and are committed to aggressively defend against unjustified allegations of patent infringement,” Octane Fitness President and CEO Dennis Lee said in a statement. ”Octane is thrilled to have played a role in changing U.S. patent law to help deter frivolous lawsuits among all industries.”
On July 1, the U.S. District Court ruled the case was exceptional using a new standard set by the U.S. Supreme Court that reduces the standard of proof for legal fee reimbursement. Octane was directed to file documentation supporting its request for reasonable attorney's fees by July 15. Icon was allowed to file a response by July 22.
Octane requested $2.85 million in its application, and Icon raised nine objections to that application, arguing any award to Octane should total no more than $1.17 million. The court deducted Octane's requested attorney fees related to a statute issue in the appeal and remand proceedings ($721,432), fees pertaining to a patent ($125,719) and fees charged for administrative personnel ($6,095). The court deducted costs related to a statute issue in the appeal and remand proceedings ($84,354), expert witness fees ($110,675) and undocumented computerized legal research costs ($22,857).
Icon, which manufactures Freemotion, Nordictrack, HealthRider and Proform brands, had sued Octane for infringing on two of its patents on elliptical machines. Icon dropped one infringement claim on electric heart rate monitoring. The U.S. District Court ruled in favor of Octane in 2011 on Icon's infringement claim over a patent covering a machine designed to take up less floor space than prior art models, which also allowed adjustable stride length.
Octane followed by requesting reimbursement for legal fees, but the U.S. District Court and the U.S. Court of Appeals for the Federal Circuit found the case was not "exceptional" enough to award the fees.
In response, Octane filed a petition for certiorari with the U.S. Supreme Court, arguing that this statutory interpretation was a "rigid and virtually insurmountable test" and that trial judges should be able to award fees when a patent holder "unreasonably pursues a case having an objectively low likelihood of success."
The U.S. Supreme Court overturned the Court of Appeals in April 2014. It reduced the standard of proof for legal fee reimbursement from "clear and convincing evidence" to a "preponderance of the evidence." The Supreme Court remanded the case to the Federal Circuit for reconsideration, and the Federal Circuit sent the case to the District Court.
In the ruling issued July 1, the U.S. District Court concluded the manner of Icon's litigation was exceptionally unreasonable and the imposition of fees was appropriate.