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Text: Prior to 1946, the Patent Act did not authorize the awarding of attorney’s fees to the prevailing party in patent litigation. Rather, the “American Rule” governed: “ ‘[E]ach litigant pa[id] his own attorney’s fees, win or lose . . . .’ ” Marx v. General Revenue Corp., 568 U. S. ___, ___ (2013) (slip op., at 9). In 1946, Congress amended the Patent Act to add a discretionary fee-shifting provision, then codified in §70, which stated that a court “may in its discretion award reasonable attorney’s fees to the prevailing party upon the entry of judgment in any patent case.” 35 U. S. C. §70 (1946 ed.).1

Courts did not award fees under §70 as a matter of course. They viewed the award of fees not “as a penalty for failure to win a patent infringement suit,” but as appropriate “only in extraordinary circumstances.” Park-InTheatres, Inc. v. Perkins, 190 F. 2d 137, 142 (CA9 1951). The provision enabled them to address “unfairness or bad faith in the conduct of the losing party, or some other equitable consideration of similar force,” which made a case so unusual as to warrant fee-shifting. Ibid.; see also Pennsylvania Crusher Co. v. Bethlehem Steel Co., 193 F. 2d 445, 451 (CA3 1951) (listing as “adequate justification[s]” for fee awards “fraud practiced on the Patent Office or vexatious or unjustified litigation”).

Six years later, Congress amended the fee-shifting provision and recodified it as §285. Whereas §70 had specified that a district court could “in its discretion award reasonable attorney’s fees to the prevailing party,” the revised language of §285 (which remains in force today) provides that “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” We have observed, in interpreting the damages provision of the Patent Act, that the addition of the phrase “exceptional cases” to §285 was “for purposes of clarification only.”2 General Motors Corp. v. Devex Corp., 461 U. S. 648, 653, n. 8 (1983); see also id., at 652, n. 6. And the parties agree that the recodification did not substantively alter the meaning of the statute.3

For three decades after the enactment of §285, courts applied it—as they had applied §70—in a discretionary manner, assessing various factors to determine whether a given case was sufficiently “exceptional” to warrant a fee award. See, e.g., True Temper Corp. v. CF&I Steel Corp., 601 F. 2d 495, 508–509 (CA10 1979); Kearney & Trecker Corp. v. Giddings & Lewis, Inc., 452 F. 2d 579, 597 (CA7 1971); Siebring v. Hansen, 346 F. 2d 474, 480–481 (CA8 1965).

In 1982, Congress created the Federal Circuit and vested it with exclusive appellate jurisdiction in patent cases. 28 U. S. C. §1295. In the two decades that followed, the Federal Circuit, like the regional circuits before it, instructed district courts to consider the totality of the circumstances when making fee determinations under §285. See, e.g., Rohm & Haas Co. v. Crystal Chemical Co., 736 F. 2d 688, 691 (1984) (“Cases decided under §285 have noted that ‘the substitution of the phrase “in exceptional cases” has not done away with the discretionary feature’ ”); Yamanouchi Pharmaceutical Co., Ltd. v. Danbury Phar­ macal, Inc., 231 F. 3d 1339, 1347 (2000) (“In assessing whether a case qualifies as exceptional, the district court must look at the totality of the circumstances”).

In 2005, however, the Federal Circuit abandoned that holistic, equitable approach in favor of a more rigid and mechanical formulation. In Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F. 3d 1378 (2005), the court held that a case is “exceptional” under §285 only “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 Fed. R. Civ. P. 11, or like infractions.” Id., at 1381. “Absent misconduct in conduct of the litigation or in securing the patent,” the Federal Circuit continued, fees “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.” Ibid. The Federal Circuit subsequently clarified that litigation is objectively baseless only if it is “so unreasonable that no reasonable litigant could believe it would succeed,” iLOR, LLC v. Google, Inc., 631 F. 3d 1372, 1378 (2011), and that litigation is brought in subjective bad faith only if the plaintiff “actually know[s]” that it is objectively baseless, id., at 1377.4

Finally, Brooks Furniture held that because “[t]here is a presumption that the assertion of infringement of a duly granted patent is made in good faith[,] . . . the underlying improper conduct and the characterization of the case as exceptional must be established by clear and convincing evidence.” 393 F. 3d, at 1382.

The parties to this litigation are manufacturers of exercise equipment. The respondent, ICON Health & Fitness, Inc., owns U. S. Patent No. 6,019,710 (’710 patent), which discloses an elliptical exercise machine that allows for adjustments to fit the individual stride paths of users. ICON is a major manufacturer of exercise equipment, but it has never commercially sold the machine disclosed in the ’710 patent. The petitioner, Octane Fitness, LLC, also manufactures exercise equipment, including elliptical machines known as the Q45 and Q47.

ICON sued Octane, alleging that the Q45 and Q47 infringed several claims of the ’710 patent. The District Court granted Octane’s motion for summary judgment, concluding that Octane’s machines did not infringe ICON’s patent. 2011 WL 2457914 (D Minn., June 17, 2011). Octane then moved for attorney’s fees under §285. Applying the Brooks Furniture standard, the District Court denied Octane’s motion. 2011 WL 3900975 (D Minn., Sept. 6, 2011). It determined that Octane could show neither that ICON’s claim was objectively baseless nor that ICON had brought it in subjective bad faith. As to objective baselessness, the District Court rejected Octane’s ——————

inference of bad faith to establish exceptionality under §285, unless the

circumstances as a whole show a lack of recklessness on the patentee’s

part.” Id., at 1314. Chief Judge Rader wrote a concurring opinion that

sharply criticized Brooks Furniture, 738 F. 3d, at 1318–1320; the court,

he said, “should have remained true to its original reading of” §285, id.,

at 1320.

argument that the judgment of noninfringement “should have been a foregone conclusion to anyone who visually inspected” Octane’s machines. Id., *2. The court explained that although it had rejected ICON’s infringement arguments, they were neither “frivolous” nor “objectively baseless.” Id., *2–*3. The court also found no subjective bad faith on ICON’s part, dismissing as insufficient both “the fact that [ICON] is a bigger company which never commercialized the ’710 patent” and an e-mail exchange between two ICON sales executives, which Octane had offered as evidence that ICON had brought the infringement action “as a matter of commercial strategy.”5 Id., *4.

ICON appealed the judgment of noninfringement, and Octane cross-appealed the denial of attorney’s fees. The Federal Circuit affirmed both orders. 496 Fed. Appx. 57 (2012). In upholding the denial of attorney’s fees, it rejected Octane’s argument that the District Court had “applied an overly restrictive standard in refusing to find the case exceptional under §285.” Id., at 65. The Federal Circuit declined to “revisit the settled standard for exceptionality.” Ibid.

We granted certiorari, 570 U. S. __ (2013), and now reverse.