Any trademark litigator knows that it has historically been difficult to obtain an award of attorney fees in a federal trademark case, no matter how egregious the opposing party’s actions. Section 35(a) of the Lanham Act provides, in part, “The court in exceptional cases may award reasonable attorney fees to the prevailing party.” 15 U.S.C. § 1117(a). In practice, federal courts rarely found cases to be “exceptional.”
The Octane Fitness Decision
Last year’s Supreme Court decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014), provided an opening for a more liberal standard for fees in trademark cases. Octane Fitness was a patent case where the Supreme Court interpreted the Patent Act’s identical attorney fees language: “The court in exceptional cases may award reasonable attorney fees to the prevailing party.” 35. U.S.C. § 285. In the underlying case, the Federal Circuit had applied its longstanding formulation that “exceptional cases” involved litigation that is (1) objectively baseless and (2) brought in “subjective bad faith.” Octane Fitness, 134 S. Ct. at 1754 (citing Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378 (Fed. Cir. 2005)). The Federal Circuit required clear and convincing evidence of both the lack of merit and the subjective bad faith.