The patent statute has always allowed courts to compel losers to pay winners' attorneys' fees, but only in fairly rare circumstances. The specific term used is that the case must be "exceptional" - which until yesterday, meant something very, very narrow, and fee awards were consequently very rare.
Yesterday's decision in Octane Fitness (along with the companion case Highmark v. Allcare, also decided yesterday), did three useful things for patent defendants:
1) Ended the requirement that fees can only be awarded when the case is BOTH "so unreasonable that no reasonable litigant could believe it could succeed" AND is actually known by the plaintiff to be baseless.
2) Ended the requirement that defendants prove by "clear and convincing evidence" that the case is "exceptional" (saying instead that there's "no specific evidentiary standard" defendants must meet).
3) Clarified the standard for appellate review of fee awards, finding that district court awards can be overturned only for "abuse of discretion"
As a result, district court judges have substantially more latitude to grant fee awards in patent cases, combined with significantly reduced fear of reversal. The outcome should be immediate, and will have a chilling effect on new frivolous litigation -- while simultaneously providing an incentive to current frivolous plaintiffs to drop their cases sooner or on better terms.
BTW, one other thing to note: most of the chatter is about non-practicing entities, aka patent trolls -- but the decision isn't limited to cases brought by NPEs. Frivolous patent plaintiffs, even if they're active competitors in the market, are in a much weaker position thanks to this decision.
This is a great step toward a more sane patent system, and many startup founders should be delighted.