Patent Litigation Attorneys' Fees: Shifting from Status to Conduct

Abusive patent assertion results in deadweight losses to society. Faced with the high cost of patent litigation, companies often settle for an amount equal to a fraction of the cost of defending a patent infringement suit. This allows the patent owner to extract settlements from many individuals without the risk of invalidation before a federal court. Shifting attorneys' fees to the prevailing party is a remedy courts award in exceptional cases to deter patent owners from bringing unreasonable claims of infringement and to return defendants to the position they were in prior to litigation.

Current fee-shifting proposals target patent assertion entities rather than scrutinizing the heart of the infringement claim-the patent claims and the activities of the accused infringer. This Note analyzes the history of fee-shifting in patent cases and examines the proposed SHIELD Act. Next, this Note describes the problems with the proposed legislation's definition of disfavored patent plaintiffs, bad actors, and the loser-pays rule. Finally, this Note concludes by proposing a solution, which modifies the standard for shifting attorneys' fees under 35 U.S.C. § 285.