Challenge

Octane Fitness LLC (Octane) is the only fitness manufacturer in the world dedicated exclusively to elliptical machines. A privately-held start-up company, Octane enjoyed immediate success by providing innovative, award-winning elliptical machines supported by high quality and personalized customer service.

Quickly emerging as an industry leader in the high-end commercial fitness market, Octane, the “little guy,” attracted the attention of industry giant and “big guy,” Icon Health & Fitness, Inc. (Icon). Icon sought to bully Octane into submission by suing them in Minnesota District Court over alleged patent infringement. Icon’s action was, essentially, a “stick-up at the O.K. Corral” style lawsuit designed to force Octane to pay Icon royalties or fees for Octane elliptical machines. Icon knew that Octane would be faced with millions of dollars in attorney fees to fend off this claim, and believed that strong-arming Octane with an expensive law suit would force them to cave-in to their financial demands.

For the Harness IP Litigation team, Icon’s initial litigation claim would become far more than just patent defense litigation counsel. We believed the actions of Icon amounted to patent abuse, and our ultimate goal would be to advocate for an actual change in the law regarding the payment of attorney fees in these types of invective claims.

Solution

The Harness IP Litigation team began by successfully defending Octane in Minnesota District Court, obtaining a favorable claim construction ruling on multiple claim terms in dispute. Our litigators then moved for summary judgment, which the Court granted, finding no literal infringement and no infringement under the doctrine of equivalents, but denied Octane’s motion for attorney fees, relying on the Federal Circuit’s overly restrictive standard for awarding prevailing defendant attorney fees in patent infringement suits. On appeal, the Federal Circuit affirmed both the District Court’s ruling in favor of Octane and its denial of attorney fees, refusing to revisit its rigid standard for awarding attorney fees to prevailing accused infringers.

Harness IP knew that there was the potential for higher justice not only for Octane, but for the industry as a whole. We believed this case could result in an actual change in the law regarding attorney fees and abusive patent claims, and that Octane could pioneer new ground by setting in motion a much needed change.

Octane agreed, and Harness IP filed the petition for Certiorari at the United States Supreme Court. On October 1, 2013, the Supreme Court granted Octane’s Petition for Certiorari to consider this issue.  Research and preparation for trial were extensive and intense, as the entire industry would be watching with anticipation.

The Supreme Court issued its decision on April 29, 2014. Harness IP had secured a 9-0 result from the Supreme Court in which the standard for district courts to award attorney fees under the “exceptional case” standard of 35 USC §285 was eased considerably to provide district courts with broader discretion to award attorney fees. The issue has garnered significant national media attention and subsequent proposed bills by Congress due to the proliferation of weak patent suits brought in recent years.

Since Octane, fee motions are being filed at a much higher rate and fees are being awarded in far more cases than had occurred prior to the Supreme Court’s Octane decision. More defendants are willing to defend against weaker patent claims that had previously plagued the system, knowing they now have a realistic chance to secure fees. The Octane decision has been touted as one of the Top 10 patent decisions by the Supreme Court over the last decade.

Court Opinion

Main Brief

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