  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 Fran-
cisco, 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 defendant-
appellant. 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 embed-
ded 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 technolo-
gy. 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” connect-
ed 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 word-
lines. Id. Beneath the gate is a substrate separated from
the gate by a dielectric oxide. Id. col. 7 l. 17. The dielec-
tric 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 indi-
cates that the transistor is in a programmed state, while
the absence of current flow indicates that it is in a non-
programmed 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. Repre-
sentative 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 sub-
       strate,
    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 re-
       gion 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 semiconduc-
       tor region than said second doped semicon-
       ductor 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 inter-
national 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 e-
mail 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 infringe-
ment 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 expla-
nation 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 pre-
    sent in Sidense’s memory cell transistors. For at
    least these reasons, . . . we do not believe any li-
    cense 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 prod-
ucts 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 coun-
sel 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 in-
    fringe 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 shal-
    low 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 in-
    formation 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 dia-
gram 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 (em-
phasis 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. Coun-
sel stated that he was “not so worried about the inter-
change 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 re-
tained 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 chan-
   nel 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 con-
   duct 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 in-
vestigation” in order to meet Kilopass’s deadline. Howev-
er, 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 reflect-
ing [MoFo’s] analysis.” Id.
    The infringement chart provided an analysis concern-
ing 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 in-
fringement, 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.” De-
      termining 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 infringe-
ment 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 infringe-
ment 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 third-
party 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 infringe-
ment 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 con-
struction arguments to the United States Patent and
Trademark Office Board of Patent Appeals and Interfer-
ences (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 re-
examination. 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 inappropri-
ate 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 differ-
ences” 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 sum-
mary 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 attor-
neys’ 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 in-
     fringement in bad faith. Kilopass performed sub-
     stantial 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 intellectual-
    property forensics firm to determine that a pa-
    tent-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 in-
    fringement, fraud or inequitable conduct in pro-
    curing 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 liti-
    gation 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 sup-
porting 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 appro-
priate. Cybor, 138 F.3d at 1460. We review that deter-
mination 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 prod-
ucts. 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, re-
quires 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 de-
fendant seeks fee shifting under § 285 based on the alle-
gation 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 excep-
tional. 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 dis-
parate treatment of plaintiffs and defendants under § 285
because a plaintiff can demonstrate exceptionality by
proving willful infringement, which only requires a show-
ing 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 as-
sessing 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 lan-
guage 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 convinc-
ing evidence that the infringer acted despite an objective-
ly high likelihood that its actions constituted
infringement of a valid patent.”).



     1   Indeed, if iLOR had attempted to increase the re-
quired 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 evi-
dence’ that Kilopass brought or maintained the prosecu-
tion 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 indica-
tive 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 par-
ty’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 actual-
ly 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 subjec-
tive 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 assess-
ment of attorneys’ fees under § 285, however. The district
court prematurely ended the § 285 inquiry without de-
termining 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 estab-
lished in our § 285 case law. 3 The totality of the circum-
stances 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 patent-
ee pursues claims that are devoid of merit. Factors such
as the failure to conduct an adequate pre-suit investiga-
tion, 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 litiga-
tion by clear and convincing evidence in light of the totali-
ty 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 re-
quired 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 excep-
tionality under § 285. Sidense does not contend that a
finding of exceptionality predicated on objective baseless-
ness 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 reasona-
ble 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 legisla-
tive 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 cir-
cumstances.” 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 “bot-
tomed upon a finding of unfairness or bad faith in the
conduct of the losing party, or some other equitable con-
sideration 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 incorpo-
rated 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 “ex-
ceptional” 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] cor-
    responding provision in R.S. 4921, [except] “in ex-
    ceptional 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 Anno-
tated, 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 predeces-
sor, 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 prose-
cution 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 legit-
imately 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 al-
lows the imposition of punitive sanctions—does not in-
volve 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 asser-
tions 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 dis-
cretion 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 Furni-
ture 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 anticompeti-
tive 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 neces-
sary 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 prevail-
ing party.”). No other circuit court interpreting the Lan-
ham Act has held that the Supreme Court’s decision in
Professional Real Estate Investors requires both objective
baselessness and subjective bad faith to support excep-
tionality 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 infer-
ence of bad faith to establish exceptionality under § 285,
unless the circumstances as a whole show a lack of reck-


as 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 quota-
tion 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 re-
quirement 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 Manufac-
turing 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 con-
vincing 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 attor-
neys’ fees were sought based on fraud on the PTO. Hycor
noted that “[f]raud must be proved by clear and convinc-
ing 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 Reac-
tive 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 provi-
sions such as § 285. See Herman & MacLean v. Huddle-
ston, 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 Adding-
ton 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, sug-
gesting that fee shifting should be appropriate when a
patentee has “filed and or maintained a patent infringe-
ment suit having little likelihood of success, under cir-
cumstances 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 base-
less 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 back-
     ground of the Supreme Court’s decision in Profes-
     sional 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 litiga-
     tion could only be sanctioned if “objectively base-
     less 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 back-
wards-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 consti-
tutional 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 Inves-
tors, “[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 determina-
tions 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, vexa-
tious or unjustified litigation, conduct that violates Fed-
eral Rule of Civil Procedure 11, or like infractions.” 664
F.3d at 916 (citation and internal quotation marks omit-
ted). And, we recently reiterated that “‘[l]itigation mis-
conduct 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 objec-
tive 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 considera-
tion 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. Alterna-
tively, 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, le-
gal 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. Major-
ity 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 pre-
vailing 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 “extraordi-
nary” 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 “discre-
tion,” this change did not depart from the original under-
standing. 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 “ex-
ceptional” 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 behav-
ior [was also found to be] relevant to the award of attor-
ney 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 con-
siderations 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 litiga-
tion 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 Su-
preme Court’s decision in Professional Real Estate Inves-
tors, 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 tradi-
tional 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 baseless-
ness 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 sec-
tion 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 defend-
ant 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.
