Hogan Lovells Scores Unanimous Supreme Court Victory in Highmark Case

WASHINGTON, D.C. April 30, 2014 – Hogan Lovells scored a unanimous victory at the Supreme Court on Tuesday, 29 April as the high court issued a decision in Highmark v. Allcare Health Management System, Inc., making it easier for patent-holders to obtain sanctions against plaintiffs that bring meritless patent suits.

The Court held that all aspects of the “exceptional case” determination underlying patent fee awards must be reviewed for abuse of discretion and rejected the Federal Circuit’s de novo standard of review.  The Court remanded the case back to the Federal Circuit to apply this new standard.

The case involved a patent infringement dispute between Highmark, a non-profit Blue Cross Blue Shield Plan, and Allcare, which owns a broad patent that purports to cover certain healthcare-management systems.  Allcare did not practice the patent, but instead used it to try to obtain licensing fees from other companies.

Instead of paying the licensing fees Allcare demanded, Highmark sought a declaratory judgment of non-infringement.  After years of costly litigation, the district court granted summary judgment for Highmark.  Highmark later obtained a fee award against Allcare.  The Federal Circuit reversed that award in part using its de novo standard, but it will now have to revisit that decision in light of the Supreme Court’s ruling. 

“Today's decision is a significant one for companies that are used to having non-practicing entities threaten them with litigation to extract fees,” said Hogan Lovells partner Neal Katyal, who argued the case on February 26, 2014.  “It should make patent trolls think twice.”

The Hogan Lovells team advising Highmark was led by litigation partners Neal Katyal and Dominic Perella, associates Amanda Rice and Jonathan Shaub in Washington, D.C. and former Washington, D.C. associates David Ginn and Craig Kitchen, both of whom have left the firm for Government service.
The unanimous victory in Highmark underscores the depth of Hogan Lovells’ patent litigation practice, which is the only legal practice to be ranked top tier for IP at a Global, European, and Asian level by Chambers Guide 2014.

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