United States Court of Appeals 

for the Federal Circuit ______________________ 

KILOPASS TECHNOLOGY, INC.,

Plaintiff-Appellee,

v.

SIDENSE CORPORATION,

Defendant-Appellant.

______________________ 

2013-1193

______________________ 

Appeal from the United States District Court for the 

Northern District of California in No. 10-CV-2066, Judge 

Susan Y. Illston.

______________________ 

Decided: December 26, 2013

______________________ 

DARALYN J. DURIE, Durie Tangri, LLP, of San Francisco, California, argued for plaintiff-appellee. With her 

on the brief was EUGENE NOVIKOV. 

ROGER L. COOK, Kilpatrick Townsend & Stockton, 

LLP, of San Francisco, California, argued for defendantappellant. With him on the brief were ROBERT D.

TADLOCK and SARA B. GIARDINA. Of counsel on the brief 

was JOSHUA H. LEE, of Atlanta, Georgia. 

______________________ 
2 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

Before RADER, Chief Judge, LOURIE and O’MALLEY,

Circuit Judges.

Opinion for the court filed by Circuit Judge O’MALLEY. 

Concurring opinion filed by Chief Judge RADER. 

O’MALLEY, Circuit Judge. 

This appeal arises from the United States District 

Court for the Northern District of California. The district 

court granted summary judgment in favor of Sidense 

Corporation (“Sidense”), holding that it did not infringe 

Kilopass Technology, Inc.’s (“Kilopass’s”) U.S. Patents 

6,940,751 (“the ’751 patent”), 6,777,757, and 6,856,540. 

Kilopass Tech., Inc. v. Sidense Corp., No. 10-2066, 2012 

WL 3545286 (N.D. Cal. Aug. 16, 2012). We summarily 

affirmed that decision under Federal Circuit Rule 36. 

Kilopass Tech., Inc. v. Sidense Corp., 501 F. App’x 980 

(Fed. Cir. 2013). While that appeal was pending, Sidense 

filed a motion in the district court seeking an award of 

attorneys’ fees under 35 U.S.C. § 285, which the district 

court denied. Kilopass Tech., Inc. v. Sidense Corp., No. 

10-02066, 2012 WL 6599428 (N.D. Cal. Dec. 18, 2012). 

Sidense now appeals from the district court’s denial of 

that motion. We vacate and remand for reconsideration 

consistent with this opinion.

I 

Kilopass and Sidense are competitors in the embedded non-volatile memory (“NVM”) market. Memory cells 

use transistors to store information. NVM memory 

consists of memory devices that retain their information 

(or state) when power is removed. Kilopass markets 

technology used to create its 1.5T NVM memory technology. Sidense has a competing 1T-Fuse product, the design 

and technology of which it licenses to its customers, who 

in turn use those designs to build embedded memory cells. 
KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 3

Kilopass’s patents cover a memory cell comprised of 

transistors located at the cross-points of a column bitline 

and a row wordline. Each transistor has a “gate” connected to a column bitline and a “source” connected to a row 

wordline. ’751 patent col. 5 ll. 32–40. Opposite the source 

is a “drain” that is not connected to any bitlines or wordlines. Id. Beneath the gate is a substrate separated from 

the gate by a dielectric oxide. Id. col. 7 l. 17. The dielectric oxide is engineered to “break down” when a sufficient 

voltage is applied to the gate. Id. col. 7 ll. 14–16. If the 

gate oxide breaks down, a conductive link forms between 

the source and drain, allowing current to flow through the 

transistor. Id. col. 7 ll. 16–20. The flow of current indicates that the transistor is in a programmed state, while 

the absence of current flow indicates that it is in a nonprogrammed state. Id.

Kilopass’s ’751 patent, which is representative of the 

patents in suit, is directed to a programmable memory 

cell utilizing a transistor at the intersection of a column 

bitline and a row wordline. ’751 patent Abstract. Representative claim 1 reads as follows:

1. A programmable memory cell useful in a 

memory array having column bitlines and row 

wordlines, the memory cell comprising: 

a transistor having a gate,

a gate dielectric between the gate and over a substrate,

and first and second doped semiconductor regions

formed in said substrate adjacent said gate 

and in a spaced apart relationship to define a 

channel region there between and under said 

gate; 

and wherein the second doped semiconductor region of the transistor is connected to one of said 

row wordlines, 
4 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

and wherein said gate dielectric is formed such 

that the gate dielectric is more susceptible to 

breakdown near the first doped semiconductor region than said second doped semiconductor region.

Id. col. 14 ll. 30–44 (emphases added). 

Claim 1 of the ’751 patent requires a first and second 

doped semiconductor region of the memory cell where the 

second doped region is connected to one of the wordlines. 

Id. Sidense’s 1T-Fuse cells, however, utilize a shallow 

trench isolation (“STI”) region for the transistor drain 

instead of a first doped region. Kilopass, 2012 WL 

3545286, at *10; J.A. 10604. The claim also requires the 

second doped region to be connected to a row wordline, 

but Sidense’s 1T-Fuse product connects the second doped 

region to the column bitline. Kilopass, 2012 WL 3545286, 

at *7; J.A. 10604–05. These differences formed the basis 

of the district court’s noninfringement determination, 

which we affirmed. Kilopass, 2012 WL 3545286, at *7–11, 

aff’d, 501 F. App’x 980 (Fed. Cir. 2013). 

II

In 2005, Kilopass’s founder and an inventor on all 

three of Kilopass’s patents, Jack Peng, reviewed an international patent application submitted by Sidense that 

was directed to protecting Sidense’s competing 1T-Fuse 

memory cell. Peng believed that the 1T-Fuse was similar 

to Kilopass’s patented cells, except that Sidense used a 

split gate implementation. Kilopass, 2012 WL 3545286, 

at *9. Peng contacted a patent attorney at the law firm 

Perkins Coie to discuss potential infringement. In an email to the Perkins attorney, Peng explained that 

“[Kilopass] did not file [a] dedicated patent for this split 

gate implementation” and that “we should [have] . . . a 

long time ago even though we were very busy.” J.A. 

10576, 10580. According to Peng, it was not a priority to 

Kilopass at that time because Sidense’s “split gate 
KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 5

[memory cell] is not self-aligned, so their practical cell size 

will be larger than [Kilopass’s] 1.5T cell.” J.A. 10576. 

The Perkins counsel nonetheless believed that there 

was a sufficient basis to challenge Sidense with infringement contentions “in a friendly way . . . to see what their 

reaction is.” J.A. 10578. On November 28, 2005, the 

Perkins counsel sent a letter to Sidense advising that it 

“should be interested in obtaining a license to Kilopass’s 

patents” or otherwise “provide [Kilopass] with an explanation of how these products avoid the claims” of the 

patents-in-suit, inter alia. J.A. 10583–86. 

Sidense responded on January 20, 2006, stating, “[I]t 

is our opinion that no products produced by Sidense, nor 

their methods of operation, fall within the scope of the 

claims.” J.A. 10590. Specifically, Sidense noted: 

[E]ach [claim] require[s] that the transistor have 

(1) first and second doped semiconductor regions

formed in the substrate adjacent the gate; and (2) 

a second doped semiconductor region connected to 

the row wordline . . . . Such elements are not present in Sidense’s memory cell transistors. For at 

least these reasons, . . . we do not believe any license of these patents is necessary.

J.A. 10590 (emphases added). Sidense also proposed that 

it was “prepared to consider a third-party examination, on 

a confidential basis” to confirm whether Sidense’s products infringed, “provided [Kilopass] agreed to pay the 

costs of same and to be bound by any findings in this 

regard.” J.A. 10593.

After reviewing Sidense’s response, the Perkins counsel sent the following e-mail to Peng and Kilopass’s CEO: 

Here is my report on Sidense’s response to our 

charge of infringement. I still believe given our 

knowledge of Sidense’s technology, that they infringe our patents. Please keep in mind that I am 
6 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

assuming that their memory design is the same as 

detailed in their patent application . . . . Note that 

it is possible that Sidense may have changed their 

memory design to be different from what is shown

. . . . In speaking with Jack [Peng] earlier today, 

we speculated that Sidense may have eliminated 

the first doped region and replaced it with a shallow trench isolation [STI] of some sort. . . . [I]f in 

fact they have eliminated the first dope region, 

then they would NOT infringe our claims literally. 

If that is the case, then we would have to go 

through a “reissue” proceeding in the patent office 

that may take 2 years in order to modify our 

claims to include the situation where there is no 

first doped region . . . . The most crucial bit of information we need to find out is the design of their 

memory cell. We have been . . . assuming that their 

patent application shows their memory cell. This 

is not always the case and it would be good if we 

could find out definitively how their memory cell is 

constructed. I still feel strongly about our case if 

they are using the memory cell described in their 

patent application.

J.A. 10601 (emphasis in original). That e-mail made clear 

that: (1) the analysis by Perkins counsel up to that point 

had been based on the assumption that the design of 

Sidense’s 1T-Fuse cell was the same as the cell described 

in Sidense’s international patent application; and (2) if 

that assumption was incorrect and Sidense had in fact 

replaced the first doped region (i.e., the drain) with an STI 

region, then Sidense “would NOT infringe [the] claims 

literally.” Id. 

In June 2007, a Kilopass employee obtained a diagram of Sidense’s 1T-Fuse cell at a presentation, which 

confirmed that Sidense had replaced the drain with an 

STI. The Perkins counsel then sent the following e-mail 

to Kilopass officials: “My preliminary review of all the 
KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 7

Sidense materials indicates that they have redesigned 

their memory cell to avoid infringement of our patents. Or 

at least make our case much tougher.” J.A. 10604 (emphasis added). Counsel also noted that Sidense employed 

an opposite wordline and bitline configuration, viz., the 

gate of each transistor was connected to a row wordline 

and the source was connected to a column bitline. Counsel stated that he was “not so worried about the interchange of the bit line and word line,” but that he was 

“more worried about the fact that [Sidense’s cell] uses an 

[STI] on one side of the gate and not a [drain].” Id. at

10604–05. 

Despite that advice from its Perkins patent counsel 

that Sidense did “NOT infringe [the] claims literally,” and 

that Kilopass’s case was “much tougher,” Kilopass retained the law firm of Morrison Foerster (“MoFo”) to 

conduct another analysis. On March 19, 2008, counsel 

from MoFo e-mailed Kilopass’s CEO the following:

As we mentioned during the meeting, assuming 

Sidense’s NVM product uses . . . [an] STI region[]

(as opposed to two N+ regions) to define the channel below the gate . . . Kilopass appears to have a 

valid claim that Sidense’s NVM product is at least 

“equivalent” to the invention claimed by claim 1 of 

Kilopass’s ’751 patent, and therefore that Sidense 

infringes that patent. 

As we also discussed, the next step is for us to conduct a more detailed investigation and analysis to 

confirm our initial impressions, which you asked 

us to complete before your April 2nd meeting with 

Kilopass’s Board. 

J.A. 11487 (emphases added). 

MoFo then immediately began its “more detailed investigation” in order to meet Kilopass’s deadline. However, eight days later, on March 27, 2008, Kilopass 
8 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

instructed MoFo to stop all work on the project. The 

reason is unclear, but MoFo subsequently sent Kilopass 

an invoice for 44 hours of work “relating to Kilopass’s 

investigation of potential infringement claims against 

Sidense.” J.A. 11490. The invoice was accompanied by “a 

preliminary infringement chart for the ’751 patent reflecting [MoFo’s] analysis.” Id. 

The infringement chart provided an analysis concerning the doctrine of equivalents and concluded that 

“Kilopass appears to have a reasonable argument that 

Sidense’s field oxide region is equivalent to the doped 

region in claim 1 of the ’751 patent, and therefore satisfies 

this limitation.” J.A. 11497. With regard to literal infringement, the MoFo counsel opined:

[I]f “doped region” is defined as an area on the 

semiconductor where the electrical properties 

have been changed, it may be difficult to argue 

that the field oxide region is a doped region . . . . 

If, however, “doped region” could reasonably be 

defined more broadly as simply an area to which a 

dopant is applied, then we may be able to argue 

that the field oxide region is a “doped region.” Determining the potential viability of this argument 

will require additional investigation, technical 

feedback from Kilopass and possibly input from 

an independent expert. 

Id. 

Although MoFo’s preliminary infringement chart 

opined favorably to Kilopass regarding the doctrine of 

equivalents, there is no evidence in the record that MoFo’s 

analysis was complete at that time, nor is there any 

evidence that Kilopass considered MoFo’s preliminary 

infringement chart in deciding to bring suit against 

Sidense. Kilopass retained MoFo to conduct an infringement analysis but terminated that relationship only eight 

days later. It does not appear that Kilopass was aware of 
KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 9

how much work MoFo had done up to that point or that 

MoFo was even in the process of completing an infringement chart. In other words, it appears that Kilopass 

officials had already set their mind prior to learning of 

MoFo’s infringement analysis.

In 2008, a team of engineers led by Kilopass’s CTO 

sent an exemplary Sidense memory device to a thirdparty for reverse-engineering. After receiving the results, 

the CTO created a slide presentation for a meeting of 

Kilopass’s board noting that Kilopass had retained the 

law firm SNR Denton to investigate potential infringement against Sidense. The CTO also stated that Denton 

“[a]ttorneys don’t have a conclusion yet as to the reading 

of 1st doped region and STI region” and that their “formal

analysis [was] in progress.” J.A. 11296. However, in the 

CTO’s opinion, “[f]rom an engineer’s perspective,” Sidense 

infringed under the doctrine of equivalents. Id. 

III

On May 14, 2010, Kilopass filed suit against Sidense 

in the United States District Court for the Northern 

District of California, alleging both literal infringement 

and infringement under the doctrine of equivalents. 

During the course of the proceedings, the district 

court discovered that Kilopass was making claim construction arguments to the United States Patent and 

Trademark Office Board of Patent Appeals and Interferences (the “Board”) that were directly contrary to those 

being made to the court in order to distinguish over a key 

piece of prior art during a concurrent inter partes reexamination. Kilopass, 2012 WL 3545286, at *6. The 

district court admonished Kilopass for engaging in 

“gamesmanship.” J.A. 5990–91.

Additionally, the district court ruled that Kilopass 

had attempted to amend its infringement contentions and 

advance previously undisclosed theories under the doc-
10 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

trine of equivalents long past the applicable deadline and 

without the court’s approval. Kilopass, 2012 WL 3545286, 

at *8. The district court noted that “Kilopass’s assertion 

of a new theory of equivalence is particularly inappropriate in light of evidence that Kilopass has known for many 

years that Sidense does not literally infringe its patents.” 

Id. at n.8 (emphasis added). 

After ruling that Kilopass had disavowed claim scope 

and striking evidence relating to Kilopass’s theory of 

equivalence, the district court granted Sidense summary 

judgment of noninfringement. Id. at *10. The district 

court reasoned that Kilopass ignored “numerous differences” between the patent claims and Sidense’s accused 

products and that Peng, a named inventor on all three 

patents in suit, admitted before Kilopass filed suit that 

Kilopass had actually considered using Sidense’s design 

but chose not to because it resulted in a larger cell size. 

Id. at *9. 

Kilopass appealed the district court’s grant of summary judgment to this court, and we summarily affirmed 

pursuant to Federal Circuit Rule 36. Kilopass, 501 F. 

App’x at 980. While that appeal was pending, Sidense 

filed a motion in the district court for an award of attorneys’ fees pursuant to 35 U.S.C. § 285. Relying on the 

standard set forth by a panel of this court in Brooks 

Furniture Manufacturing v. Dutailier, Inc., 393 F.3d 1378 

(Fed. Cir. 2005), the district court denied the motion, 

stating: 

Although Sidense was the prevailing party on the 

patent claims, the Court concludes that Sidense 

has not met its burden of establishing with “clear 

and convincing evidence” that Kilopass brought or 

maintained the prosecution of its patent infringement in bad faith. Kilopass performed substantial pre-filing investigation and was able to 

obtain opinions from two different law firms that 
KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 11

Kilopass had a non-baseless claim against 

Sidense. In addition, Kilopass’s Chief Technology 

Officer performed his own independent analysis 

based on the results of an outside intellectualproperty forensics firm to determine that a patent-infringement suit was appropriate.

Kilopass, 2012 WL 6599428, at *3 (citations omitted). 

Sidense now appeals the district court’s denial of its 

motion for § 285 attorneys’ fees. We have jurisdiction 

pursuant to 28 U.S.C. § 1295(a)(1). 

IV

A determination of whether to award attorneys’ fees 

under § 285 involves a two-step process. First, a district 

court must determine whether the prevailing party has 

proved by clear and convincing evidence, Ruiz v. A.B. 

Chance Co., 234 F.3d 654, 669 (Fed. Cir. 2000), that the 

case is “exceptional.” 35 U.S.C. § 285; Cybor Corp. v. FAS 

Techs., Inc., 138 F.3d 1448, 1460 (Fed. Cir. 1998) (en banc). 

Under Brooks Furniture, 

A case may be deemed exceptional when there has 

been some material inappropriate conduct related 

to the matter in litigation, such as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, 

vexatious or unjustified litigation, conduct that 

violates [Federal Rule of Civil Procedure] 11, or 

like infractions. See, e.g., Cambridge Prods. Ltd. 

v. Penn Nutrients, Inc., 962 F.2d 1048, 1050–51 

(Fed. Cir. 1992); Beckman Instruments, Inc. v. 

LKB Produkter AB, 892 F.2d 1547, 1551 (Fed. Cir. 

1989). Absent misconduct in the litigation or in 

securing the patent, sanctions may be imposed 

against the patentee only if both (1) the litigation 

is brought in subjective bad faith, and (2) the litigation is objectively baseless. Professional Real 
12 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

Estate Investors v. Columbia Pictures Industries, 

508 U.S. 49, 60–61 . . . (1993); see also Forest 

Labs., Inc. v. Abbott Labs., 339 F.3d 1324, 1329–

31 (Fed. Cir. 2003).

393 F.3d at 1381.

We review de novo whether the court applied the 

proper legal standard under § 285, and review the court’s 

factual findings for clear error. Brasseler, U.S.A. I, L.P. v. 

Stryker Sales Corp., 267 F.3d 1370, 1378 (Fed. Cir. 2001). 

A finding is clearly erroneous when, despite some supporting evidence, “the reviewing court on the entire 

evidence is left with the definite and firm conviction that 

a mistake has been committed.” United States v. U.S. 

Gypsum Co., 333 U.S. 364, 395 (1948). Second, if the 

district court finds the case to be exceptional, it must then 

determine whether an award of attorneys’ fees is appropriate. Cybor, 138 F.3d at 1460. We review that determination for an abuse of discretion. Id. 

Sidense argues that the district court erred in not 

finding this case “exceptional” under Brooks Furniture

because Kilopass’s claims were objectively baseless and 

brought in subjective bad faith. In the alternative, 

Sidense urges us to change the standard for assessing 

exceptionality under § 285 as set out in Brooks Furniture 

and cases that followed. Kilopass responds that, as the 

trial court found, it had a good faith basis for bringing and 

pursuing its infringement claims against Sidense’s products. Kilopass also argues that we should not alter our 

exceptional case standard. 

V 

A 

Sidense first faults the district court for its reliance on 

our decision in MarcTec, LLC v. Johnson & Johnson, 664 

F.3d 907 (Fed. Cir. 2012), which, in Sidense’s view, requires too great a showing to establish subjective bad 
KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 13

faith. Quoting iLOR, LLC v. Google, Inc., 631 F.3d 1372, 

1377 (Fed. Cir. 2011), MarcTec stated that, when a defendant seeks fee shifting under § 285 based on the allegation that the plaintiff’s claims were objectively baseless, 

the “patentee’s case ‘must have no objective foundation, 

and the plaintiff must actually know this.’” MarcTec, 664 

F.3d at 916 (emphasis added). Requiring actual 

knowledge that claims are baseless, according to Sidense, 

sets too high a bar for establishing that a case is exceptional. These concerns are echoed in the recent successful 

petition for a writ of certiorari in Octane Fitness, LLC v. 

Icon Health & Fitness, Inc., 496 F.3d 57 (Fed. Cir. 2012), 

cert. granted, 81 U.S.L.W. 3567 (U.S. Oct. 1, 2013) (No. 

12–1184). Petitioners argued that requiring defendants 

to prove actual knowledge results in impermissibly disparate treatment of plaintiffs and defendants under § 285 

because a plaintiff can demonstrate exceptionality by 

proving willful infringement, which only requires a showing of recklessness. See Petition for Writ of Certiorari, 

Octane Fitness, LLC v. Icon Health & Fitness, Inc., 2013 

WL 1309080, at *28–29 (U.S. Mar. 27, 2013) (No. 12–

1184); see also Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 

(1994) (stating that “[p]revailing plaintiffs and prevailing 

defendants are to be treated alike” in the context of assessing entitlement to attorneys’ fees under 17 U.S.C. 

§ 505); Eltech Sys. Corp. v. PPG Indus., Inc., 903 F.2d 

805, 811 (Fed. Cir. 1990) (“[T]here is and should be no 

difference in the standards applicable to patentees and 

infringers who engage in bad faith litigation.”). 

It is unclear whether the district court, in its brief 

analysis, required Sidense to demonstrate that Kilopass 

had actual knowledge that its claims were baseless. But, 

to the extent that the district court did require actual 

knowledge of objective baselessness, it erred. The language from iLOR and MarcTec that Sidense interprets as 
14 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

requiring actual knowledge does not reflect this court’s 

law governing § 285,1 and is dictum.2 As we made clear 

in Highmark, Inc. v. Allcare Health Management, 687 

F.3d 1300 (Fed. Cir. 2012), subjective bad faith only 

requires proof that the “lack of objective foundation for 

the claim ‘was either known or so obvious that it should 

have been known’ by the party asserting the claim.” Id. 

at 1309 (emphases added) (quoting In re Seagate Tech., 

LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc)). 

Thus, actual knowledge of baselessness is not required. 

Like a plaintiff seeking to recover attorneys’ fees under 

§ 285 based on alleged willful infringement, a defendant 

need only prove reckless conduct to satisfy the subjective 

component of the § 285 analysis. See Highmark, 687 F.3d 

at 1309; Seagate, 497 F.3d at 1371 (“[T]o establish willful 

infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted 

infringement of a valid patent.”).

1 Indeed, if iLOR had attempted to increase the required showing for demonstrating subjective bad faith, it 

would have been unable to do so as a panel decision 

because such a change would contravene this court’s 

established precedent. See Eltech, 903 F.2d at 810–11 

(stating that actual knowledge of baselessness is not 

required to prove subjective bad faith).

2 In iLOR, we resolved the appeal on the objective 

prong and never reached the subjective prong. See iLOR,

631 F.3d at 1374. In MarcTec, we not only found that the 

plaintiff did know during the course of the litigation that 

its claims were baseless, we also relied on litigation 

misconduct as an alternative ground to support the § 285 

fee award. See MarcTec, 664 F.3d at 917–20. The court’s 

discussion of the level of knowledge required under the 

subjective prong was not critical to either holding.

 
KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 15

In addition to any errors the district court may have 

made by requiring too great a showing of subjective bad 

faith, the court erred by taking too narrow a view of the 

proof that can satisfy the subjective prong of the § 285 

analysis. The court rejected Sidense’s request for fees 

based solely on Sidense’s purported failure to establish 

subjective bad faith. Kilopass, 2012 WL 6599428, at *3

(“[T]he Court concludes that Sidense has not met its 

burden of establishing with ‘clear and convincing evidence’ that Kilopass brought or maintained the prosecution of its patent infringement in bad faith.”). The court 

reached this determination, however, without addressing 

the objective merits of Kilopass’s claims. Id. Instead, it 

focused exclusively on evidence it considered to be indicative of good faith on Kilopass’s part—including opinions of 

counsel and Kilopass’s own independent infringement 

analysis. Id. This focus was inappropriately narrow, 

rendering the district court’s analysis incomplete.

Our case law has long held that, “in considering a party’s subjective state of mind, we are ‘to take into account 

the totality of the circumstances.’” Highmark, 687 F.3d at 

1311 (quoting Mach. Corp., 774 F.2d at 473). In Eltech, 

we examined the difficulty of proving what a party actually knew or did not know, explaining:

The “should know” rubric obviously applies when 

a party attempts to escape the consequences of its 

conduct with the bare statement, “I didn’t know.” 

A party confronted with the difficulty of proving 

what is in an adversary’s mind must be at liberty 

to prove facts establishing that that adversary 

should have known, i.e. to prove facts that render 

the “I didn’t know” excuse unacceptable.

903 F.2d at 810. Thus, focusing first and only on subjective factors, as the district court did here, is inadequate to 

obtain the justice that § 285 is intended to achieve. 

Subjective bad faith is difficult to prove directly, essential-
16 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

ly requiring the discovery of a smoking gun, and evidence 

of a lack of subjective bad faith is easy to provide, as 

occurred here. Kilopass, knowing that it had no literal 

infringement case, i.e., that Sidense’s product was not 

within the scope of its claims, was able to overcome 

Sidense’s § 285 fee motion simply by showing that it had 

consulted counsel who opined about the possibility of 

prevailing on an infringement claim under the doctrine of 

equivalents. Lack of direct proof of subjective bad faith 

should not alone free a party from the threat of assessment of attorneys’ fees under § 285, however. The district 

court prematurely ended the § 285 inquiry without determining whether Kilopass’s doctrine of equivalents 

theory was objectively baseless and whether that fact or 

other circumstantial evidence would support an inference 

of bad faith on the part of Kilopass. 

The primacy of objective evidence over assertions of 

subjective good faith or lack of knowledge is well established in our § 285 case law.3 The totality of the circumstances does include an evaluation of subjective good 

faith, but mostly as a negative. If a smoking gun is found, 

revealing that a patentee knew that he had no chance of 

winning a lawsuit, then subjective bad faith is easily 

shown. But one’s misguided belief, based on zealousness 

rather than reason, is simply not sufficient by itself to 

show that a case is not exceptional in light of objective 

3 Because objective baselessness is an independent 

requirement under Brooks Furniture and can influence 

assessment of the subjective component under § 285, it is 

in the interests of judicial economy for a court to consider 

the objective merits of a case first, and then assess the 

parties’ proofs of subjective intent. See Prof’l Real Estate 

Investors, 508 U.S. at 60 (“Only if challenged litigation is 

objectively meritless may a court examine the litigant’s 

subjective motivation.”).

 
KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 17

evidence that a patentee has pressed meritless claims. 

Thus, we have observed that, where “the patentee is 

manifestly unreasonable in assessing infringement, while 

continuing to assert infringement in court, an inference is 

proper of bad faith.” Eltech, 903 F.2d at 811. 

In discussing the requirement of bad faith to support 

a finding of exceptionality under § 285, Brooks Furniture

did not speak at all to the type of proofs that are adequate 

to establish bad faith. Brooks Furniture thus did nothing 

to discourage courts from drawing an inference of bad 

faith from circumstantial evidence thereof when a patentee pursues claims that are devoid of merit. Factors such 

as the failure to conduct an adequate pre-suit investigation, vexatious or unduly burdensome litigation tactics, 

misconduct in procuring the patent, or an oppressive 

purpose are factors which can be indicative of bad faith. 

The wide variety of ways available to establish bad faith

is why our case law has long required a party seeking fees 

under § 285 “to prove the other guilty of bad faith litigation by clear and convincing evidence in light of the totality of the circumstances.” Eltech, 903 F.2d at 811

(emphasis added); see also Highmark, 687 F.3d at 1311 

(quoting Mach. Corp., 774 F.2d at 473); Forest Labs., Inc. 

v. Abbott Labs., 339 F.3d 1324, 1330 (Fed. Cir. 2003) 

(considering the record as a whole in determining whether 

the patentee maintained its infringement counterclaim in 

bad faith). Thus, we vacate the district court’s judgment 

denying fees and remand for consideration of whether 

Kilopass acted in bad faith in light of the totality of the 

circumstances—with particular attention paid to the 

objective merits of Kilopass’s claims and other objective 

evidence indicative of bad faith. 

B 

Sidense also argues that it should not even be required to prove that Kilopass acted in bad faith to show 

exceptionality. Proof of objective baselessness, in 
18 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

Sidense’s view, should be enough to demonstrate exceptionality under § 285. Sidense does not contend that a

finding of exceptionality predicated on objective baselessness would demand that the district court shift fees, only

that it should permit it to do so in its discretion in light of 

the totality of the circumstances. Sidense’s argument is 

not without some force. 

In 1946, Congress amended the then patent remedy 

statute, section 4921 of the Revised Statutes of 1874, to 

state that the “court may in its discretion award reasonable attorney fees to the prevailing party.” Mach. Corp., 

774 F.2d at 471 (quoting Patent Act of August 1, 1946, 

§ 1, 60 Stat. 778, 35 U.S.C. § 70 (1946 ed.)). The legislative history indicates that a key aim of this provision was 

“‘to enable the court to prevent a gross injustice to an 

alleged infringer.’” See Mathis v. Spears, 857 F.2d 749, 

755 (Fed. Cir. 1988) (quoting S. Rep. No. 1503, 79th 

Cong., 2d Sess. (1946), reprinted in 1946 U.S. Code Cong. 

Serv. 1386, 1387). This statute was interpreted by the 

circuit courts of appeals as giving district courts broad 

discretion to award attorney fees in “extraordinary circumstances.” See, e.g., id. (“The statute was construed to 

allow the award of fees in extraordinary cases . . . .”); 

Park-In-Theatres v. Perkins, 190 F.2d 137, 142 (9th Cir. 

1951) (“[I]n granting this power, Congress made plain its 

intention that such fees be allowed only in extraordinary 

circumstances.”). An extraordinary case was one “bottomed upon a finding of unfairness or bad faith in the 

conduct of the losing party, or some other equitable consideration of similar force, which makes it grossly unjust

that the winner of the particular law suit be left to bear 

the burden of his own counsel fees.” Park-In-Theatres, 

190 F.2d at 142 (emphasis added) (listing additional cases 

that “support this view”). 

The 1952 Patent Act slightly modified and incorporated the 1946 statute into the present day patent remedy 

statute, 35 U.S.C. § 285. See Mach. Corp., 774 F.2d at 
KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 19

471. Section 285 states, “The court in exceptional cases 

may award reasonable attorney fees to the prevailing 

party.” 35 U.S.C. § 285 (1952). Although the word “exceptional” was added and the word “discretion” was 

removed, the legislative history makes clear that no 

change in meaning was intended: 

This section is substantially the same as [the] corresponding provision in R.S. 4921, [except] “in exceptional cases” has been added as expressing the 

intention of the present statute as shown by its 

legislative history and as interpreted by the 

courts.

S. Rep. No. 1979, 82nd Cong., 2d Sess. (1952), reprinted in

1952 U.S. Code Cong. & Ad. News 2394, 2423; see also 

Rohm & Haas Co. v. Crystal Chem. Co., 736 F.2d 688, 691 

(Fed. Cir. 1984) (quoting P.J. Federico, Commentary on 

the New Patent Act, Title 35, United States Code Annotated, page 1, at 56 reprinted in 75 J. Pat. & Trademark 

Off. Soc’y 161, 216 (1993)). 

Thus, a central aim of § 285, as well as its predecessor, is to prevent an alleged infringer from suffering a 

“gross injustice.” The injury to the alleged infringer is the 

focus—an injury that can occur regardless of a plaintiff’s 

state of mind. In the same vein, we have stressed that 

§ 285 “is remedial and for the purpose of compensating 

the prevailing party for the costs it incurred in the prosecution or defense of a case where it would be grossly 

unjust . . . to require it to bear its own costs.” Highmark, 

687 F.3d at 1310. Again, it is clear that the aim of § 285 

is to compensate a defendant for attorneys’ fees it should 

not have been forced to incur. The aim is not to punish a 

plaintiff for bringing those claims—an inquiry that legitimately would involve inquiry into the plaintiff’s state of 

mind. Thus, relevant legislative history and our own case 

law at least suggest that we should focus on the “gross 
20 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

injustice” to the defendant, if any, and not necessarily on 

the plaintiff’s subjective state. 

Even Federal Rule of Civil Procedure 11—which allows the imposition of punitive sanctions—does not involve inquiry into a party’s subjective good faith. Rule 11 

allows courts to impose sanctions where a filing contains 

“claims, defenses, and other legal contentions [that] are 

[not] warranted by existing law or by a nonfrivolous 

argument for extending, modifying, or reversing existing 

law or for establishing new law.” Rule 11 functions to 

assure that parties assert litigation positions that are 

objectively reasonable at the time of filing. See Hall v. 

Bed Bath & Beyond, Inc., 705 F.3d 1357, 1372 (noting 

that Rule 11 sanctions are appropriate when a plaintiff 

asserts frivolous claims in its complaint). Importantly, 

however, Rule 11 does not require a showing of bad faith. 

See Chambers v. NASCO, Inc., 501 U.S. 32, 47 (1991) 

(“Rule 11 . . . imposes an objective standard of reasonable 

inquiry which does not mandate a finding of bad faith.”). 

Because subjective bad faith is not required in the context 

of Rule 11, it follows that the question of exceptionality

under § 285—a compensatory provision—should involve

an objective inquiry as well, under which a party’s assertions of subjective good faith or lack of knowledge do not 

bear on whether a case is exceptional. Again, while those 

factors might influence a trial court’s exercise of its discretion under the second part of the § 285 inquiry (i.e., 

when determining whether to award fees after finding 

exceptionality), it is arguable they should not impact the 

initial exceptionality finding. 

It does not seem, moreover, that the Supreme Court’s 

decision in Professional Real Estate Investors would

require that we retain the requirement of subjective bad 

faith as a predicate to a finding of exceptionality. We 

cited Professional Real Estate Investors in Brooks Furniture for the proposition that both subjective bad faith and 

objective baselessness are required under § 285 in the 
KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 21

absence of litigation misconduct or misconduct in securing 

the patent at issue. Brooks Furniture, 373 F.3d at 1381. 

But, Professional Real Estate Investors does not seem to 

demand the bad faith requirement we gleaned from it. It 

is true that, in Professional Real Estate Investors, the 

Court does demand inquiry into a “litigant’s subjective 

motivation.” 508 U.S. at 60. But, the Court’s subjective 

inquiry has nothing to do with what a litigant knew or 

should have known regarding the merits of its claims—

the inquiry that currently forms the subjective prong of 

our § 285 analysis. Instead, the Supreme Court focused 

on “whether the baseless lawsuit conceals an attempt to 

interfere directly with the business relationships of a 

competitor through the use [of] governmental process—as 

opposed to the outcome of that process—as anticompetitive weapon.” Id. at 60–61 (alteration and emphases in 

original) (citations and internal quotation marks omitted). 

Thus, the subjective component in Professional Real 

Estate Investors, as Sidense argues, may only pertain to 

antitrust concerns not present in § 285 analyses. If that 

is true, Professional Real Estate Investors would not 

demand that subjective considerations remain a necessary component of findings of exceptionality under § 285.4 

4 As Sidense argues, this appears to be how other 

circuit courts interpret identical language in the Lanham 

Act. See 15 U.S.C. § 1117(a) (“The court in exceptional 

cases may award reasonable attorney fees to the prevailing party.”). No other circuit court interpreting the Lanham Act has held that the Supreme Court’s decision in 

Professional Real Estate Investors requires both objective 

baselessness and subjective bad faith to support exceptionality when other independent bases for such a finding 

are absent. Instead, the circuit courts interpreting the 

Lanham Act allow exceptionality to be predicated on 

baselessness alone, or on numerous other grounds, such 

 
22 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

While Sidense’s arguments may constitute good faith 

assertions that our law should be something other than it 

is, as a panel, we are not able to entertain them. We 

must, and do, apply our current law, which requires proof 

of objective baselessness and subjective bad faith as a 

prerequisite to a finding of exceptionality—the first prong 

in the court’s § 285 inquiry. See Brooks Furniture, 393 

F.3d at 1381. Consequently, on remand, the district court 

should require Sidense to prove Kilopass’s subjective bad 

faith. We reiterate, however, that a subjective bad faith 

requirement is not the obstacle to fee shifting that the 

district court in this case appears to have believed. As 

explained above, a wide variety of proofs can provide the 

requisite showing of bad faith under § 285, which must be 

assessed in light of the totality of the circumstances. 

Objective baselessness alone can create a sufficient inference of bad faith to establish exceptionality under § 285, 

unless the circumstances as a whole show a lack of reckas bad faith litigation, vexatious or unreasonable conduct, 

and similar misconduct. See, e.g., Retail Servs., Inc. v. 

Freebies Publishing, 364 F.3d 535 (4th Cir. 2004) (stating 

that an alleged infringer can show exceptionality by 

showing “something less than bad faith” and noting that 

groundless arguments can demonstrate exceptionality 

(citation and internal quotation marks omitted)); Tamko 

Roofing Prods., Inc. v. Ideal Roofing Co., 282 F.3d 23, 32 

(1st Cir. 2002) (“Willfulness short of bad faith or fraud 

will suffice when equitable considerations justify an 

award and the district court supportably finds the case 

exceptional.”); Hartman v. Hallmark Cards, Inc., 833 F.2d 

117, 124 (8th Cir. 1987) (clarifying that the “absence of 

bad faith is not alone determinative on the Lanham Act 

fee issue” because an exceptional case can be one that is 

“groundless, unreasonable, vexatious, or . . . pursued in 

bad faith”) (emphasis added) (citation and internal quotation marks omitted)).

 
KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 23

lessness on the patentee’s part. See Eltech, 903 F.2d at 

811. Thus, the retention of the subjective bad faith requirement may prove to have little effect on this case, as 

well as many that follow. 

C 

Sidense also contends that it should not be required to 

prove exceptionality by clear and convincing evidence, as 

our law currently requires. According to Sidense, proof by 

a preponderance of the evidence should be sufficient 

under § 285. Again, Sidense’s argument is not a frivolous 

one. 

We have justified the requirement that a party prove 

exceptionality by clear and convincing evidence by citing 

the “‘presumption that an assertion of infringement of a 

duly granted patent is made in good faith.’” Highmark, 

687 F.3d at 1310 (quoting Medtronic Navigation, Inc. v 

BrainLAB Medizinische Computersysteme GmbH, 603 

F.3d 943, 954 (Fed. Cir. 2010)). According to our case law, 

this presumption of good faith originated in the Supreme 

Court’s decision in Virtue v. Creamery Package Manufacturing Co., 227 U.S. 8, 37–38 (1913). See C.R. Bard, Inc. 

v. M3 Sys., Inc., 157 F.3d 1340, 1369 (Fed. Cir. 1998). In 

Virtue, however, the Court merely stated that “[p]atents 

would be of little value if infringers of them could not 

be . . . proceeded against in the courts. Such action, 

considered by itself, cannot be said to be illegal.” 227 U.S. 

at 37–38. This language does not establish, or even 

suggest, that there is a presumption that patents are 

asserted in good faith. It simply states that the assertion 

of a patent, in and of itself, is not a proper predicate for 

antitrust liability. And even if Virtue could be read to 

create a presumption, there seems to be no basis for 

requiring a defendant to overcome that presumption by 

clear and convincing evidence. See Microsoft Corp. v. i4i 

Ltd. P’ship, 131 S. Ct. 2238, 2246 (2011) (recognizing that 

it is “unusual to treat a presumption as alone establishing 
24 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

the governing standard of proof”); see also Fed. R. Evid. 

301 (noting that, where there is a presumption in a civil 

case, the typical effect is that “the party against whom 

[the] presumption is directed has the burden of producing 

evidence to rebut the presumption”). Virtue thus does not 

clearly demand that we require that exceptionality be 

proved by clear and convincing evidence. 

Other cases trace our requirement of clear and convincing evidence with respect to exceptionality under 

§ 285 to our decision in Hycor Corp. v. Schlueter Co., 740 

F.2d 1529, 1538 (Fed. Cir. 1984), a case in which attorneys’ fees were sought based on fraud on the PTO. Hycor 

noted that “[f]raud must be proved by clear and convincing evidence.” In Reactive Metals & Alloys Corp. v. ESM, 

Inc., 769 F.2d 1578 (Fed. Cir. 1985), we cited Hycor for the 

proposition that “[t]he quantum of proof required to prove 

bad faith conduct is clear and convincing evidence.” Id. at 

1582; see also Mach. Corp., 774 F.2d at 471 (citing Reactive Metals, 769 F.2d at 1582, for the proposition that a 

party must “establish[ ] the exceptional nature of the case 

by clear and convincing evidence”).

The pronouncement in Reactive Metals, however, 

seems to reflect an unneeded expansion of the clear and 

convincing burden to all aspects of the § 285 analysis. A 

preponderance-of-the-evidence standard is typical in civil 

cases—particularly with respect to compensatory provisions such as § 285. See Herman & MacLean v. Huddleston, 459 U.S. 375, 390 (1983) (noting that “the 

preponderance-of-the-evidence standard [is] generally 

applicable in civil actions”); Highmark, 687 F.3d at 1310. 

The heightened burden of proof that applies to allegations 

of fraud is an exception to the general rule. See Addington v. Texas, 442 U.S. 418, 424 (1979) (observing that 

clear and convincing evidence is typically required “in 

civil cases involving allegations of fraud or some other 

quasi-criminal wrongdoing by the defendant”); see also 

Grogan v. Garner, 498 U.S. 279, 286 (1991) (“Because the 
KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 25

preponderance-of-the-evidence standard results in a 

roughly equal allocation of the risk of error between 

litigants, we presume that this standard is applicable in 

civil actions between private litigants unless particularly 

important individual interests or rights are at stake.”). 

Although fraud certainly is a ground upon which a finding

of exceptionality under § 285 may be predicated, other 

forms of misconduct (e.g., recklessly pursuing a baseless 

infringement claim) can support an exceptionality finding

as well. And, because exceptionality can be based on 

conduct less culpable than fraud, there is arguably no 

reason to depart from the typical preponderance standard 

with respect to § 285 where fraud is not at issue.5 

Again, while we cannot fault Sidense for making good 

faith arguments asking that we change our current law, 

as a panel we may not indulge it. Thus, on remand, the 

court will apply a clear and convincing evidence standard 

to the exceptionality component of the § 285 inquiry.

5 To the extent Sidense argues we should align our 

jurisprudence with that of other circuits interpreting the 

parallel fee shifting provision under the Lanham Act, we 

note that the circuits are split on the burden of proof they 

impose upon a prevailing party in these circumstances. 

Compare Bd. of Supervisors for La. State Univ. Agric. & 

Mech. Coll. v. Smack Apparel Co., 550 F.3d 465, 491 (5th 

Cir. 2008) (“The prevailing party bears the burden of 

demonstrating the exceptional nature of the case by clear 

and convincing evidence.”), and Fin. Inv. Co. (Bermuda) 

Ltd. v. Geberit AG, 165 F.3d 526, 533 (7th Cir. 1998), with 

Eagles, Ltd. v. Am. Eagle Found., 356 F.3d 724, 729 (6th 

Cir. 2004) (indicating that exceptionality can be proven by 

a preponderance).

 
26 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

D 

Sidense finally urges an even greater overhaul of our 

standard for assessing exceptionality under § 285, suggesting that fee shifting should be appropriate when a 

patentee has “filed and or maintained a patent infringement suit having little likelihood of success, under circumstances where it would be ‘unjust’ for the prevailing 

[defendant] to bear its own attorney fees.” Appellant’s Br. 

at 31. Sidense thus suggests that we depart from Brooks 

Furniture’s requirement that a case be objectively baseless to support fee shifting in the absence of litigation 

misconduct or misconduct in securing the asserted patent. 

In Sidense’s view, fee shifting should only require an 

alleged infringer to show, “for the objective prong, that 

the patent owner brought and maintain[ed] the claims of 

infringement despite an objectively low likelihood that it 

would prevail on its infringement claim.” Appellant’s Br. 

at 49 (emphasis in original). 

We find this to be Sidense’s weakest argument for a 

change in our jurisprudence. As we explained in iLOR, 

Section 285 must be interpreted against the background of the Supreme Court’s decision in Professional Real Estate Investors, Inc. v. Columbia 

Pictures Industries, Inc., 508 U.S. 49 . . . (1993). 

There, the Court recognized that the right to bring 

and defend litigation implicated First Amendment 

rights and that bringing allegedly frivolous litigation could only be sanctioned if “objectively baseless in the sense that no reasonable litigant could 

realistically expect success on the merits.” Id. at 

60 . . . .

631 F.3d at 1376; see also Highmark, 678 F.3d at 1310–11 

(explaining that the objective prong is a “single backwards-looking inquiry” that asks whether a reasonable 

litigant could have expected to succeed in light of the 

entire record generated in the infringement proceedings). 
KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 27

In light of patentees’ First Amendment right to petition 

the government (by, for instance, filing a lawsuit seeking 

relief in the courts), we do not think Congress intended to 

discourage patentees from bringing reasonable claims of 

infringement by raising the specter of fee shifting—even 

when the patentee’s legitimate claims are on less than the 

firmest ground. 

While Professional Real Estate Investors involved the 

assertion of claims under the Sherman Act, and is, thus, 

not binding in the patent context, its reasoning on this 

point is persuasive. Patent owners possess presumptively 

valid property rights which convey the right to exclude 

others from practicing the claims in their patents. The 

property right conveyed by a patent has constitutional 

underpinnings. See U.S. Const. art. I, § 8, cl. 8 (granting 

Congress the right “[t]o promote the Progress of Science 

and useful Arts, securing for limited Times to Authors 

and Inventors the exclusive Right to their respective 

Writings and Discoveries”). And, patentees have a constitutional right to petition the government to enforce or 

otherwise vindicate those rights. Thus, where there is no 

basis upon which to predicate exceptionality other than 

the viability of the claims asserted, we conclude that § 285 

fees should not be awarded as long as the patentee had an 

objectively reasonable basis for its claims, or, as the 

Supreme Court put it in Professional Real Estate Investors, “[i]f an objective litigant could conclude that the suit 

is reasonably calculated to elicit a favorable outcome.” 

508 U.S. at 60. 

Instead, when a plaintiff presses reasonable, but 

weak, claims of infringement, a prevailing defendant 

must look to the many other bases for fee shifting under 

§ 285. Our law sets out a number of such circumstances 

under which a case can be considered “exceptional”—

providing significant flexibility that critics of our § 285 

jurisprudence often overlook. Our decision in Perricone v. 

Medicis Pharmaceutical Corp., 432 F.3d 1368 (Fed. Cir. 
28 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

2005), reinforces the fact that attorneys’ fee determinations retain a great deal of flexibility, even after Brooks 

Furniture. In MarcTec, we stressed that “a case may be 

deemed exceptional under § 285 where there has been 

willful infringement, fraud or inequitable conduct in 

procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Federal Rule of Civil Procedure 11, or like infractions.” 664 

F.3d at 916 (citation and internal quotation marks omitted). And, we recently reiterated that “‘[l]itigation misconduct and unprofessional behavior may suffice, by 

themselves, to make a case exceptional under § 285.’” 

Monolithic Power Sys., Inc. v. O2 Micro Int’l Ltd., 726 

F.3d 1359, 1366 (Fed. Cir. 2013) (alteration in original) 

(quoting Rambus, Inc. v. Infineon Techs. AG, 318 F.3d 

1081, 1106 (Fed. Cir. 2003)). Thus, trial courts retain 

broad discretion to make findings of exceptionality under 

§ 285 in a wide variety of circumstances. Proving objective baselessness and subjective bad faith is just one 

avenue for seeking fee shifting under § 285.6

In sum, we vacate the district court’s decision denying 

the motion for attorneys’ fees and remand for consideration of whether Kilopass’s doctrine of equivalents theory 

was objectively baseless, and then, whether the totality of 

the circumstances demonstrates that Kilopass acted with 

subjective bad faith. If the district court determines that 

the case is exceptional after applying the correct legal 

6 We do not need to go so far as to overrule Brooks 

Furniture, as the concurrence proposes, to give trial 

courts flexibility to award fees. As we have explained 

here, in almost every case to address the issues, and in 

Brooks Furniture itself, the Brooks Furniture framework 

that requires a showing of objective baselessness and 

subjective bad faith only comes into play where other 

grounds for an award of fees do not exist.

 
KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 29

standards, it should then determine, in its discretion, 

whether to award attorneys’ fees under § 285. Alternatively, the trial court may, in its discretion, award fees 

based on alternative grounds for doing so, if such grounds 

exist.

VI

Because the district court’s decision was premised on 

an incorrect legal standard, the decision of the district 

court is vacated and remanded.

VACATED AND REMANDED
United States Court of Appeals 

for the Federal Circuit ______________________ 

KILOPASS TECHNOLOGY, INC.,

Plaintiff-Appellee,

v.

SIDENSE CORPORATION,

Defendant-Appellant.

______________________ 

2013-1193

______________________ 

Appeal from the United States District Court for the 

Northern District of California in No. 10-CV-2066, Judge 

Susan Y. Illston.

______________________ 

RADER, Chief Judge, concurring

I welcome and join the court’s thoughtful analysis, legal scholarship, and improvement in the application of 

our fee-shifting law. I also endorse the changes proposed 

by Sidense that objective baselessness alone should be 

sufficient for an award of attorney’s fees, and that proof 

by a preponderance of the evidence should suffice. Majority Op. at 18 (“Sidense’s argument is not without some 

force.”); Majority Op. at 23 (“Sidense’s argument is not a 

frivolous one.”).

I wish to add to some of the court’s reasoning with my 

hope that our court will return to its original binding 

precedent on fee-shifting. Our earlier jurisprudence 

governs over the subsequent case of Brooks Furniture. 
2 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

See Newell Cos., Inc. v. Kenney Mfg. Co., 864 F.2d 757, 

765 (Fed. Cir. 1988) (“[P]rior decisions of a panel of the 

court are binding precedent on subsequent panels unless 

and until overturned in banc.”). Before Brooks Furniture, 

district courts enjoyed broad discretion to shift fees under 

35 U.S.C. § 285. In my view, this court should return to

the rule that a district court may shift fees when, based 

on the totality of the circumstances, it is necessary to 

prevent a gross injustice. See Eltech Sys. Corp. v. PPG 

Indus., Inc., 903 F.2d 805, 810–11 (Fed. Cir. 1990). 

I.

As this court notes, in 1946, Congress amended the 

Revised Statutes of 1874 to state that the “court may in 

its discretion award reasonable attorney fees to the prevailing party.” Majority Op. at 18; Mach. Corp. of Am. v. 

Gullfiber AB, 774 F.2d 467, 471 (Fed. Cir. 1985) (quoting 

Patent Act of August 1, 1946, § 1, 60 Stat. 778, 35 U.S.C. 

§ 70 (1946 ed.)). Before the creation of this court, the

various circuit courts interpreted this statute as giving 

district courts broad discretion to shift fees in “extraordinary” cases. See, e.g., Park-In-Theatres v. Perkins, 190 

F.2d 137, 142 (9th Cir. 1951). Extraordinary cases were 

those “bottomed upon a finding of unfairness or bad faith

in the conduct of the losing party, or some other equitable 

consideration of similar force, which makes it grossly 

unjust that the winner of the particular law suit be left to 

bear the burden of his own counsel fees.” Id. (emphases 

added) (listing additional cases that “support this view”). 

This court properly concludes that although the 1952 

Patent Act slightly modified the 1946 statute by adding 

the word “exceptional” and removing the word “discretion,” this change did not depart from the original understanding. Majority Op. at 19. And for a long period of 

time, this court did just that, reading 35 U.S.C. § 285 as 

applying a totality of the circumstances test. See, e.g., 

Mach. Corp., 774 F.2d at 472; Mathis v. Spears, 857 F.2d 
 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 3

749, 758 (Fed. Cir. 1988); Eltech, 903 F.2d at 810–11

(“[I]nterests of the patentee and alleged infringer are 

adequately taken into account in the required evaluation 

of the totality of the circumstances . . . .”); Sun-Tek Indus., 

Inc. v. Kennedy Sky Lites, Inc., 929 F.2d 676, 679 (Fed. 

Cir. 1991). 

During this time, district courts found cases to be “exceptional” in a variety of contexts. For example, “willful 

or intentional infringement, . . . vexatious or unjustified 

litigation, or other misfeasant behavior” was sufficient. 

Multiform Desiccants, Inc. v. Medzam, Ltd., 133 F.3d. 

1473, 1481–82 (Fed. Cir. 1998). “[U]nprofessional behavior [was also found to be] relevant to the award of attorney fees, and may suffice, by [itself], to make a case 

exceptional.” Epcon Gas Sys., Inc. v. Bauer Compressors, 

Inc., 279 F.3d 1022, 1034 (Fed. Cir. 2002). 

This court’s first and binding reading of § 285 did not 

require a district court to independently parse through 

evidence related to subjective bad faith and evidence that 

the lawsuit was objectively baseless. Rather, these considerations were implicit in the district court’s obligation 

to consider the totality of circumstances. 

II. 

In 2005, a panel of this court in Brooks Furniture

drastically altered this court’s jurisprudence regarding 35 

U.S.C. § 285: “Absent misconduct in conduct of the litigation or in securing the patent, sanctions may be imposed 

against the patentee only if both (1) the litigation is 

brought in subjective bad faith, and (2) the litigation is 

objectively baseless.” Brooks Furniture Mfg. v. Dutailier, 

Inc., 393 F.3d 1378, 1381 (Fed. Cir. 2005) (emphasis 

added). This court based this new reading on the Supreme Court’s decision in Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 

49, 60–61 (1993). From my perspective, this intervening 
4 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION

Supreme Court case does not change this court’s traditional fee-shifting rule. 

As this court notes, Professional Real Estate Investors 

rests on antitrust concerns that are not present in the 

§ 285 analysis. Majority Op. at 21. In the antitrust 

context, both subjective bad faith and objective baselessness might be reasonable to protect parties from claims 

for punitive damages. See 15 U.S.C. §§ 1, 2. On the other 

hand, 35 U.S.C. § 285 is a compensatory fee-shifting 

statute. Highmark, Inc. v. Allcare Health Mgt. Sys., 687 

F.3d 1300, 1310 (Fed. Cir. 2012). The Supreme Court 

itself counsels against requiring both subjective bad faith 

and objective baselessness in compensatory fee-shifting 

statutes. Christiansburg Garment Co. v. Equal Emp’t

Opportunity Comm’n, 434 U.S. 412, 416 (1978). 

In Christiansburg, the Supreme Court analyzed section 706(k) of Title VII of the Civil Rights Act of 1964. 

The Title VII language is very similar to the 1946 patent 

remedy statute. The Court in Christiansburg described 

section 706(k) as “flexible, authorizing the award of 

attorney’s fees to either plaintiffs or defendants, and 

entrusting the effectuation of the statutory policy to the 

discretion of the district courts.” Christiansburg, 434 U.S. 

at 416 (emphasis added). Indeed, the Court expressly 

determined that subjective bad faith was not a barrier to 

shifting fees: “[A] district court may in its discretion 

award attorney’s fees to a prevailing defendant in a Title 

VII case upon a finding that the plaintiff’s action was 

frivolous, unreasonable, or without foundation, even 

though not brought in subjective bad faith.” Id. at 421

(emphasis added); see also Fogerty v. Fantasy, Inc., 510 

U.S. 517, 534 (1994) (inferring that a prevailing defendant in the context of copyright law can prove even less 

than a prevailing defendant in Christiansburg to recover 

fees and holding that fees are within the district court’s 

discretion: “There is no precise rule or formula for making 

these determinations, but instead equitable discretion 
 KILOPASS TECHNOLOGY, INC. v. SIDENSE CORPORATION 5

should be exercised in light of the considerations we have 

identified.”).

Brooks Furniture, to my eyes, does not fully account 

for Supreme Court precedent and does not align with

decisions of other circuit courts of appeals. For example, 

the Lanham Act’s fee-shifting clause, 15 U.S.C. § 1117(a), 

is identical to section 285: “The court in exceptional cases 

may award reasonable attorney fees to the prevailing 

party.” 15 U.S.C. § 1117. Yet, in applying that identical 

language, no other circuit court requires both subjective 

bad faith and objective baselessness. See, e.g., Tamko 

Roofing Prods., Inc. v. Ideal Roofing Co., 282 F.3d 23, 31–

32 (1st Cir. 2002) (“[A] finding of bad faith or fraud is not 

a necessary precondition [to find a case exceptional].”); 

Securacomm Consulting, Inc. v. Securacom, Inc., 224 F.3d 

273, 280–82 (3d Cir. 2000); Retail Servs. v. Freebies 

Publ’g, 364, F.3d 535, 550 (4th Cir. 2004); Hartman v. 

Hallmark Cards, Inc., 833 F.2d 117, 124 (8th Cir. 1987) 

(“An exceptional case is one . . . that ‘was groundless, 

unreasonable, vexatious, or was pursued in bad faith.’”);

Secalt S.A. v. Wuxi Shenxi Constr. Mach. Co., 668 F.3d 

677, 687 (9th Cir. 2012); Reader’s Digest Ass’n, Inc. v. 

Conservative Digest, Inc., 821 F.2d 800, 808–09 (D.C. Cir. 

1987) (“[S]omething less than ‘bad faith[ ]’ suffices to 

mark a case as ‘exceptional’ . . . .”).

Thus, in this setting, this court should have remained 

true to its original reading of 35 U.S.C. § 285. Eltech, 903 

F.2d at 810–11. This original standard aligns well with 

the language of the statute, the legislative intent in 

adopting this language, this court’s precedent, Supreme 

Court precedent, and decisions from other circuit courts of 

appeals. This original standard also properly empowers 

district courts, the entities best situated to recognize and 

address litigation excesses and misconduct, to supply a 

fee reversal remedy.