United States Court of Appeals
for the Federal Circuit
______________________
GAYMAR INDUSTRIES, INC.,
Plaintiff-Appellee
v.
CINCINNATI SUB-ZERO PRODUCTS, INC.,
Defendant-Appellant
______________________
2014-1174
______________________
Appeal from the United States District Court for the
Western District of New York in No. 1:08-cv-00299-WMS-
JJM, Chief Judge William Skretny.
______________________
Decided: June 25, 2015
______________________
JODYANN GALVIN, Hodgson Russ LLP, Buffalo, NY,
argued for plaintiff-appellee. Also represented by ROBERT
J. LANE, JR.
THOMAS J. BURGER, Wood, Herron & Evans, LLP, Cin-
cinnati, OH, argued for defendant-appellant. Also repre-
sented by PAUL J. LINDEN; TIMOTHY J. GRABER,
MELISSA M. MORTON, Gibson, McAskill & Crosby, LLP,
Buffalo, NY.
______________________
2 GAYMAR INDUSTRIES, INC. v. CINCINNATI SUB-ZERO PRODUCTS
Before PROST, Chief Judge, BRYSON, and DYK, Circuit
Judges.
DYK, Circuit Judge.
Cincinnati Sub-Zero Products, Inc. (“CSZ”), the pre-
vailing party in this patent infringement case, appeals the
district court’s denial of attorney’s fees under 35 U.S.C.
§ 285. In holding that this was not an “exceptional case,”
the district court found that plaintiff Gaymar Industries,
Inc.’s (“Gaymar”) litigation position was not objectively
baseless. In assessing the totality of the circumstances,
the district court relied on several instances of defendant
CSZ’s purported litigation misconduct as a basis for
finding that the case was not exceptional. We affirm the
district court’s finding of a lack of objective baselessness.
We reverse the exceptional case finding insofar as it was
based on CSZ’s purported misconduct, and remand.
BACKGROUND
Gaymar is the owner by assignment of U.S. Patent
No. 6,517,510 (“the ’510 patent”), which is directed to a
patient temperature control system, including a blanket
that can conductively warm or cool the patient. 1 On April
1 Representative claim 1 of the ’510 patent pro-
vides:
A device for delivering a desired medium at cer-
tain temperature ranges for temperature man-
agement of a mammal, comprising:
an inlet source receives the desired medi-
um and directs the desired medium to a
temperature-control device;
GAYMAR INDUSTRIES, INC. v. CINCINNATI SUB-ZERO PRODUCTS 3
18, 2008, Gaymar sued CSZ, asserting that CSZ’s
Blanketrol III device infringed claims 1, 2, 5, 7–12, 19, 20,
23, 25–27, 29–31, 37, 38, 41, 43–45, 47–49, and 55 of the
’510 patent. On July 15, 2008, Gaymar moved for a
preliminary injunction against CSZ.
a bio-feedback device measures the mam-
mal’s actual temperature, and transmits
the measurement to the temperature-
control device;
depending on the measurement, the tem-
perature-control device alters the temper-
ature of the desired medium; and
an outlet source directs the desired medi-
um to manage the temperature of the
mammal;
wherein the mammal is to have its tem-
perature set to a predetermined-desired
temperature which is entered into the
temperature-control device;
wherein when the actual temperature is
above the predetermined-desired tempera-
ture, the temperature-control device alters
the temperature of the desired medium to
a predetermined differential from the ac-
tual temperature; and
wherein when the actual temperature is
below the predetermined-desired tempera-
ture, the temperature-control device alters
the temperature of the desired medium to
a pre-set differential from the actual tem-
perature.
J.A. 54–55.
4 GAYMAR INDUSTRIES, INC. v. CINCINNATI SUB-ZERO PRODUCTS
On July 31, 2008, CSZ filed an inter partes reexami-
nation request with the United States Patent and Trade-
mark Office (“PTO”), asserting that all 134 claims of the
’510 patent were invalid primarily based on the combina-
tion of the ’510 patent’s description of the Medi-Therm II
device (“MT-II”) and SARNS, a manual for a surgical
blood-warming device. On September 9, 2008, CSZ moved
to stay the district court action in light of the pending
reexamination request. On October 24, 2008, the PTO
granted the reexamination request and issued a first
Office Action rejecting all claims of the ’510 patent as
anticipated or obvious over prior art cited in CSZ’s re-
quest. On September 28, 2009, the district court denied
Gaymar’s motion for a preliminary injunction based on a
substantial issue of patent validity, and granted CSZ’s
motion to stay the case pending the conclusion of the
reexamination. On November 23, 2009, the PTO reaf-
firmed its rejection of all claims of the ’510 patent.
Gaymar filed a notice of appeal with respect to the
PTO’s cancellation decision, but ultimately determined
not to pursue it. Gaymar filed an express abandonment of
all claims on April 16, 2010, and the PTO concluded the
reexamination on July 13, 2010, cancelling all of the
claims. The district court lifted the stay on January 20,
2012, and referred the case to a magistrate judge on
February 21, 2012. Although the PTO’s unappealed
cancellation had resolved the merits of the district court
action, the question of attorney’s fees remained.
CSZ moved for attorney’s fees under § 285, alleging
that Gaymar’s litigation position was frivolous and that
Gaymar had engaged in litigation misconduct. On August
8, 2013, the magistrate judge issued a report (the “first
report”) recommending the denial of CSZ’s § 285 motion.
In the first report, the magistrate judge found that “CSZ
has not proven by clear and convincing evidence
that . . . Gaymar’s claims were objectively baseless.” J.A.
GAYMAR INDUSTRIES, INC. v. CINCINNATI SUB-ZERO PRODUCTS 5
17. The magistrate judge further found that although
Gaymar intentionally gave a misleading response to a
discovery request relating to a prior art reference, that
alone was insufficient to render the case exceptional. J.A.
24. Finally, the magistrate judge noted that he “would
not recommend an award of attorney’s fees even if the
case was exceptional,” J.A. 24, relying primarily on ap-
parent litigation misconduct by CSZ based on four exam-
ples of purported “misrepresentations to the court” or
“shifting legal theories,” J.A. 26. The district court adopt-
ed in full the magistrate judge’s recommendations on
November 21, 2013, and denied the motion for attorney’s
fees.
Following the Supreme Court’s April 29, 2014, deci-
sion in Octane Fitness, LLC v. ICON Health & Fitness,
Inc., 134 S. Ct. 1749 (2014), CSZ moved for reconsidera-
tion of its attorney’s fees motion. The magistrate judge
issued a second report on July 3, 2014 (the “second re-
port”), recommending the denial of CSZ’s motion for
reconsideration. While the magistrate judge did not
revisit his finding of a lack of objective baselessness, the
magistrate judge “disagree[d]” that the primary focus
under Octane was the objective reasonableness inquiry.
J.A. 36. The magistrate judge denied fees relying on the
litigation misconduct findings from the first report, stat-
ing that “[g]iven CSZ’s own litigation misconduct, it does
not have ‘clean hands’ sufficient to render this an ‘excep-
tional case.’” Id. (citing J.A. 25–27). The district court
again adopted the magistrate judge’s recommendations in
full on September 30, 2014, concluding that Octane did
not require a different result and denying reconsideration.
CSZ appeals the denial of its attorney’s fees motion.
We have jurisdiction under 28 U.S.C. § 1295(a)(1). We
review de novo whether the district court applied the
correct legal standard under § 285. Monolithic Power Sys.
v. O2 Micro Int’l Ltd., 726 F.3d 1359, 1365 (Fed. Cir.
6 GAYMAR INDUSTRIES, INC. v. CINCINNATI SUB-ZERO PRODUCTS
2013). We review the district court’s factual findings
underlying an exceptional case determination for clear
error. Id. And we review the district court’s determina-
tion of whether a case is “exceptional” for an abuse of
discretion. Highmark, Inc. v. Allcare Health Mgmt. Sys.,
Inc., 134 S. Ct. 1744, 1748–49 (2014).
DISCUSSION
I
Section 285 provides: “The court in exceptional cases
may award reasonable attorney fees to the prevailing
party.” 35 U.S.C. § 285. The Supreme Court in Octane
rejected the two-pronged standard articulated in Brooks
Furniture Manufacturing, Inc. v. Dutailier International,
Inc., 393 F.3d 1378 (Fed. Cir. 2005), for determining
whether a case is exceptional under § 285. The Supreme
Court explained that “[t]here is no precise rule or formula
for making” that determination. Octane, 134 S. Ct. at
1756 (internal quotation marks and citation omitted).
Instead, “[d]istrict courts may determine whether a case
is ‘exceptional’ in the case-by-case exercise of their discre-
tion, considering the totality of the circumstances.” Id.
The inquiry into the objective reasonableness of a party’s
litigating position may still be relevant under Octane
because, if a case “stands out from others with respect to
the substantive strength of a party’s litigating position
(considering both the governing law and the facts of the
case) or the unreasonable manner in which the case was
litigated,” it is “exceptional” under § 285. Id.
In the first order, the court noted that CSZ’s claim
that Gaymar’s litigation position was objectively baseless
was solely based on Gaymar’s apparent knowledge of
prior art which disclosed “the only feature that distin-
guished the asserted claims of the ’510 patent from the
prior art.” J.A. 10 (internal quotation marks and citation
omitted). The court found that CSZ had failed to estab-
GAYMAR INDUSTRIES, INC. v. CINCINNATI SUB-ZERO PRODUCTS 7
lish by clear and convincing 2 evidence that Gaymar’s
litigation position was objectively baseless, relying on the
fact that CSZ could have but did not move for summary
judgment in lieu of awaiting the outcome of the PTO
reexamination, suggesting that “this case was closer than
CSZ would now have this court believe.” J.A. 25. The
court also relied on the fact that “[i]n its reply papers,
Gaymar addressed CSZ’s invalidity arguments at great
length and in considerable detail.” J.A. 16.
While on appeal CSZ takes issue with the district
court’s finding that Gaymar’s litigation position was not
objectively baseless, it has failed to establish that the
district court abused its discretion in reaching that con-
clusion. CSZ relies on the fact that Gaymar lost at the
PTO, but as the Supreme Court made clear in Octane, fee
awards are not to be used “as a penalty for failure to win
a patent infringement suit.” 134 S. Ct. at 1753 (quoting
Park-In-Theatres, Inc. v. Perkins, 190 F.2d 137, 142 (9th
Cir. 1951)). In other words, fees are not awarded solely
because one party’s position did not prevail. CSZ also
relies on factors relevant only to the subjective inquiry, 3
such as Gaymar’s pre-suit knowledge of the prior art
SARNS manual and failure to withdraw its preliminary
injunction motion during the pendency of the PTO reex-
2 CSZ does not argue on appeal that the district
court’s use in the first report of the clear and convincing
standard, which was reversed by Octane in favor of a
preponderance of the evidence standard, requires a re-
mand on this issue. See Octane, 134 S. Ct. at 1758.
3 The subjective inquiry remains relevant under Oc-
tane. See 134 S. Ct. at 1757 (“[A] case presenting either
subjective bad faith or exceptionally meritless claims may
sufficiently set itself apart from mine-run cases to war-
rant a fee award.”).
8 GAYMAR INDUSTRIES, INC. v. CINCINNATI SUB-ZERO PRODUCTS
amination. CSZ has not established that the district
court erred in its determination that Gaymar’s claims
were not objectively baseless.
II
Under Octane, a district court may consider “the sub-
stantive strength of a party’s litigating position,” includ-
ing objective reasonableness, when determining if the
case “stands out from others.” Octane, 134 S. Ct. at 1756.
Here, after Octane, the district court chose not to rest its
decision on the reasonableness of Gaymar’s litigation
position—a step it might have taken—but instead refused
to award fees under Octane based in significant part on
its finding that “[g]iven CSZ’s own litigation misconduct,
it does not have ‘clean hands’ sufficient to render this an
‘exceptional case.’” J.A. 36 (citing J.A. 25–27 (first re-
port)). 4
To be sure, the conduct of the parties is a relevant fac-
tor under Octane’s totality-of-the-circumstances inquiry, 5
including the conduct of the movant, but we conclude that
the district court committed clear error here in finding
misconduct by CSZ.
4 The district court also adopted the magistrate
judge’s finding that he would not have awarded fees even
if the case were exceptional, but that determination was
also largely based on CSZ’s purported litigation miscon-
duct.
5 See Octane, 134 S. Ct. at 1756; see also, e.g., Power
Mosfet Techs., L.L.C. v. Siemens AG, 378 F.3d 1396, 1415
(Fed. Cir. 2004) (district court did not abuse its discretion
in denying fees under § 285 “because all of the parties had
conducted themselves without the decorum required when
practicing before a federal court”).
GAYMAR INDUSTRIES, INC. v. CINCINNATI SUB-ZERO PRODUCTS 9
The first example cited by the magistrate judge relat-
ed to a July 21, 2008, initial status conference hearing
(the “July 2008 hearing”) before Judge Skretny:
[CSZ’s] telling Judge Skretny on July 21, 2008
that [CSZ] needed to identify an expert in the
technology, then later asserting that it had main-
tained “from the outset” that no technological ex-
pert was needed[.]
J.A. 26 (citing J.A. 942 and quoting J.A. 6489) (internal
citations omitted). The first statement is from the July
21, 2008 hearing, where CSZ noted that Gaymar had
“identified three experts” and that “[w]e need to identify
our own expert in the technology. And we also would like
to have an expert witness on patent practice.” J.A. 942.
The second, and supposedly inconsistent, statement arose
four years later in the context of Gaymar’s November 20,
2012, motion to strike the declarations in support of CSZ’s
§ 285 motion by Richard Killworth, CSZ’s expert in “the
field of patent law and, specifically, [PTO] practice and
procedure.” J.A. 5389. Gaymar argued that Killworth
was not a technical expert who could properly opine on
whether the patent was obvious. CSZ argued that while
Killworth was not a technical expert, he was a PTO
expert who could opine on obviousness. CSZ asserted:
[T]he technology at issue in the current matter is
generally understandable and does not require an
expert with technical skill in the art. CSZ has
maintained this position from the outset, where it
challenged the validity of the ’510 patent at the
preliminary injunction phase without the aid of a
technical expert.
J.A. 6489 (emphasis added).
Apparently, in finding misconduct, the district court
was taxing CSZ for use of the phrase “from the outset”
10 GAYMAR INDUSTRIES, INC. v. CINCINNATI SUB-ZERO PRODUCTS
with regard to the lack of a need for a technical expert,
because at the July 2008 hearing—more than four years
earlier—CSZ’s attorney stated that “[w]e need to identify
our own expert in technology.” J.A. 942. But CSZ’s use of
“from the outset” here is clearly referring to the point at
which “it challenged the validity of the ’510 patent at the
preliminary injunction phase without the aid of a tech-
nical expert,” J.A. 6489, i.e., CSZ’s opposition to Gaymar’s
motion for a preliminary injunction. There CSZ first laid
out its invalidity defense, relying on the declaration of
Killworth, who was not a technical expert. The fact that
between the July 2008 hearing and the October 14, 2008,
opposition CSZ decided that it did not need to rely on a
technical expert does not amount to litigation misconduct,
and the district court’s contrary finding was clearly erro-
neous.
The second example cited by the magistrate judge is:
[CSZ’s] having Mr. Killworth opine on prior art
from the perspective of one skilled in the art, then
later denying that he did so[.]
J.A. 26 (citing J.A. 5394, 6489) (internal citations omit-
ted). The first reference is to Killworth’s October 25,
2012, supplemental declaration in support of CSZ’s § 285
motion. Relying on the PTO’s findings on reexamination,
a prior art manual, and the testimony of Gaymar’s own
President (Dr. Stewart), Killworth concluded that “it
would have been obvious to a person of ordinary skill to
minimize patient discomfort by operating the MT-II [prior
art] device in Manual mode to maintain the gradient.”
J.A. 5394 (emphasis added). The second reference is to
CSZ’s opposition to Gaymar’s motion to strike:
Mr. Killworth’s opinions are not based from the
perspective of one of ordinary skill in the art. Ra-
ther, his opinions are based on the perspective of
the USPTO examiner conducting a hypothetical
GAYMAR INDUSTRIES, INC. v. CINCINNATI SUB-ZERO PRODUCTS 11
examination of the ’510 patent in light of the ref-
erences withheld by Gaymar. . . . It is . . . a per-
spective for which Mr. Killworth is well-qualified
through his background as a patent examiner and
decades of experience as a patent attorney.
J.A. 6489 (emphasis added).
In this second example, the district court was appar-
ently taxing CSZ for stating that Killworth’s “opinions are
not based from the perspective of one of ordinary skill in
the art,” J.A. 6489, whereas in an earlier filing Killworth
referred to what “would have been obvious to a person of
ordinary skill,” J.A. 5394. Read in context, Killworth was
not opining from the perspective of one of ordinary skill in
the art, but rather relying on others—the PTO examiner
and Dr. Stewart—to support his opinions as a PTO ex-
pert. 6 Thus, CSZ’s statements were not inconsistent, this
was not litigation misconduct, and the district court’s
finding otherwise was clearly erroneous.
The final two examples of supposed misconduct arose
against a background of a dispute between the parties as
to whether Gaymar had the burden of addressing validity
in its preliminary injunction (to show likelihood of suc-
cess) or whether Gaymar was obligated to address the
issue only after CSZ raised the issue. 7
6 We do not suggest that the use of such an expert
is appropriate. See Sundance, Inc. v. DeMonte Fabricat-
ing Ltd., 550 F.3d 1356, 1364–65 (Fed. Cir. 2008).
7 Invalidity is an affirmative defense, and the pa-
tentee need not address invalidity as an initial matter in
filing for a preliminary injunction. See, e.g., Titan Tire
Corp. v. Case New Holland, Inc., 566 F.3d 1372, 1377
(Fed. Cir. 2009) (“To begin, the patent enjoys the same
presumption of validity during preliminary injunction
12 GAYMAR INDUSTRIES, INC. v. CINCINNATI SUB-ZERO PRODUCTS
The third example cited by the magistrate judge is:
proceedings as at other stages of litigation. Thus, if a
patentee moves for a preliminary injunction and the
alleged infringer does not challenge validity, the very
existence of the patent with its concomitant presumption
of validity satisfies the patentee’s burden of showing a
likelihood of success on the validity issue.” (citations
omitted)); Abbott Labs. v. Andrx Pharms., Inc., 473 F.3d
1196, 1201 (Fed. Cir. 2007) (“[I]n order to defeat the
[preliminary] injunction based on invalidity or unenforce-
ability defenses . . . the party bearing the burden of proof
on the issue at trial[] must establish a substantial ques-
tion of invalidity or unenforceability . . . .”); PHG Techs.,
LLC v. St. John Cos., 469 F.3d 1361, 1365 (Fed. Cir. 2006)
(“In order to defeat the [preliminary] injunction on
grounds of potential invalidity, [the alleged infringer], as
the party bearing the burden of proof on the issue at trial,
must establish a substantial question of invalidity.”).
On appeal, CSZ continues to rely on Nutrition 21 v.
United States, 930 F.2d 867 (Fed. Cir. 1991), for the
contrary view, i.e., that Gaymar bore the initial burden on
validity at the preliminary injunction phase. Nutrition 21
held that “at the preliminary injunction stage, because of
the extraordinary nature of the relief, the patentee carries
the burden of showing likelihood of success on the merits
with respect to the patent’s validity, enforceability, and
infringement.” 930 F.2d at 869 (emphasis in original).
But in Nutrition 21, the alleged infringer “raised substan-
tive issues respecting the validity and enforceability of the
[patent-in-suit] based on evidence of record,” id., and our
holding there is fully consistent with Titan Tire and other
cases which make clear that the alleged infringer bears
the initial burden of asserting invalidity at the prelimi-
nary injunction phase. See Titan Tire, 566 F.3d at 1377;
Abbott, 473 F.3d at 1201; PHG, 469 F.3d at 1365.
GAYMAR INDUSTRIES, INC. v. CINCINNATI SUB-ZERO PRODUCTS 13
[CSZ’s] claiming that “[a]t the hearing in July,
Gaymar denied that it had any obligations regard-
ing validity,” whereas in fact Gaymar correctly
told Judge Skretny that its obligation to address
validity would not arise until CSZ had alleged and
introduced evidence of invalidity[.]
J.A. 26 (quoting J.A. 3055 and citing J.A. 947–49) (inter-
nal citations omitted). There is no inconsistency. CSZ’s
consistent position was that Gaymar was taking the
position that it did not have any initial burden with
respect to validity—an accurate statement of Gaymar’s
position. Once again, this is not a misrepresentation, and
the district court’s reliance on this example was clearly
erroneous.
The fourth and final example is similar to the third:
[CSZ’s] claiming that “this court gave Gaymar an
opportunity to address its flawed position, with a
chance to update its motion for a preliminary in-
junction. . . . Instead, Gaymar chose to ignore its
obligations regarding validity,” whereas in fact
Judge Skretny agreed with Gaymar’s proposal to
defer discussion of validity until its reply papers,
after CSZ had asserted the defense of invalidity.
J.A. 26 (quoting J.A. 3056 and citing J.A. 949) (internal
citations omitted). CSZ accurately stated that the district
court gave Gaymar the opportunity to supplement its
preliminary injunction pleadings, and CSZ’s reference to
Gaymar’s “flawed position” expressed CSZ’s own position
that Gaymar’s argument (which was that Gaymar should
address the issue in its reply) was flawed, not the district
court’s view of Gaymar’s position. This is clear from other
portions of CSZ’s filings, which the magistrate judge
relied on in finding that “[t]he effect of CSZ’s misrepre-
sentations is only exacerbated by repetition.” J.A. 26.
For instance, the magistrate judge cited CSZ’s October 17,
14 GAYMAR INDUSTRIES, INC. v. CINCINNATI SUB-ZERO PRODUCTS
2008, memorandum in support of its motion for a protec-
tive order, where CSZ asserted:
Three months ago, [Gaymar] brought a Motion
[for] Preliminary Injunction that was facially de-
void of any evidence of the validity or enforceabil-
ity of its asserted [’510 patent]. When [CSZ]
brought this omission to Gaymar’s and this
Court’s attention just six days later, this Court
point blankly asked Gaymar if it was prepared to
stand on what it had submitted, and Gaymar said
“yes.” Nevertheless, this Court graciously gave
Gaymar a second chance to reassess whether it
had everything in its papers and supplement its
pleadings, but Gaymar did nothing.
J.A. 1674; see also J.A. 3081 (“At the initial hearing in
July, Gaymar asserted, incorrectly, that it could show
likelihood of success on the merits merely by establishing
infringement. Even after this Court gave Gaymar an
opportunity to supplement its motion for a preliminary
injunction, Gaymar chose not to address validity or en-
forceability.”); J.A. 4814 (“At the initial hearing in July
2008, CSZ explained Gaymar’s deficiency and cited Nutri-
tion 21. This Court gave Gaymar an opportunity to
supplement its preliminary injunction motion. But Gay-
mar ignored Nutrition 21 and did nothing.” 8 (citations
omitted)). The district court’s reliance on this fourth
example was also clearly erroneous.
8 As described above, CSZ was relying on Nutrition
21’s statement that “at the preliminary injunction stage,
because of the extraordinary nature of the relief, the
patentee carries the burden of showing likelihood of suc-
cess on the merits with respect to the patent’s validity,
enforceability, and infringement.” 930 F.2d at 869.
GAYMAR INDUSTRIES, INC. v. CINCINNATI SUB-ZERO PRODUCTS 15
Without question, CSZ’s arguments (particularly as to
the third and fourth examples) could be properly charac-
terized as overstatements. But none of the cited examples
amounts to misrepresentation or litigation misconduct.
In addressing potential litigation misconduct in analogous
contexts, other circuits have concluded that isolated
overstatements do not rise to the level of sanctionable
litigation misconduct under Federal Rule of Civil Proce-
dure 11. See, e.g., Kiobel v. Millson, 592 F.3d 78, 83 (2d
Cir. 2010) (a “possible overstatement” does not violate
Rule 11); Navarro-Ayala v. Hernandez-Colon, 3 F.3d 464,
467 (1st Cir. 1993) (“Rule 11 neither penalizes overstate-
ment nor authorizes an overly literal reading of each
factual statement.”); Fed. Deposit Ins. Corp. v. Tekfen
Constr. & Installation Co., 847 F.2d 440, 443–45, 444 n.6
(7th Cir. 1988) (vacating Rule 11 sanctions “even if [a]
minor argument were off the mark” and “not meritorious”
when the defendant’s “persistence, perhaps more than the
substance of its arguments, led to the sanctions”); see also,
e.g., A.G. Edwards & Sons, Inc. v. McCollough, 967 F.2d
1401, 1402–03 (9th Cir. 1992) (Under a statute providing
grounds for vacating an arbitration award procured by
“undue means,” 9 U.S.C. § 10(a)(1), “mere sloppy or
overzealous lawyering” does not “constitute[] ‘undue
means.’”).
III
In summary, the examples cited by the district
court—whether considered in isolation or in the aggre-
gate—amount to sloppy argument, at worst. While such
sloppiness on the part of litigants is unfortunately all too
common, it does not amount to misrepresentation or
misconduct. In view of the serious consequences of a
finding of misconduct, it is important that the district
court be particularly careful not to characterize bad
lawyering as misconduct. “CSZ’s own litigation miscon-
duct,” J.A. 36, was cited by the district court for finding
16 GAYMAR INDUSTRIES, INC. v. CINCINNATI SUB-ZERO PRODUCTS
that this was not an exceptional case in light of Octane.
Because none of the examples cited by the district court
constitutes litigation misconduct, a remand is required.
We reverse the district court’s denial of attorney’s
fees, and remand for reconsideration on the totality of the
circumstances under Octane. On remand, the district
court remains free to deny attorney’s fees based on the
totality of the circumstances, including the strength of
Gaymar’s litigation position and the sustained finding
that Gaymar’s litigation position was not objectively
baseless.
AFFIRMED-IN-PART, REVERSED-IN-PART, AND
REMANDED
COSTS
Each party to bear its own costs.