The Fifth Circuit Court of Appeals has adopted the United States Supreme Court’s standard announced in Octane Fitness, LLC v. Icon Health and Fitness, Inc., 13 S. Ct. 1749 (2014). Octane was a patent case that determined when fee awards may be available under the Patent Act’s “exceptional” case standard. In Octane, the Supreme Court unanimously held that the word “exceptional” in the Patent statute did not limit fee awards in patent lawsuit only to those cases where a party’s bad faith conduct in bringing the suit could be shown by clear and convincing evidence. We’ve previously discussed Octane and other patent fee cases on the blog and you can read more here.
The Lanham Act, which governs trademark infringement actions, includes the same “exceptional” case standard under § 1117(a), which states that “[t]he court in exceptional cases may award reasonable attorneys fees to the prevailing party.” The Fifth Circuit has followed Octane’s guidance in finding that an exceptional case for trademark infringement is “one where (1) in considering both governing law and the facts of the case, the case stands out from others with respect to the substantive strength of a party’s litigating position; or (2) the unsuccessful party has litigated the case in an ‘unreasonable manner.’” The Fifth Circuit further adopted Octane’s totality of the circumstances approach and ordered district courts in this Circuit to address the issue of fee awards for “exceptional” trademark cases.
The Fifth Circuit joins a line of other federal circuits, including the Fourth and the Third, that have applied the Octane standard to Lanham Act trademark infringement cases. The decision presumptively creates an easier standard for fee recovery for trademark litigants here in the Fifth Circuit, as the previous standard required that prevailing defendants demonstrate that plaintiff sued in bad faith and required clear and convincing evidentiary proof of bad faith.
Chelsie Spencer is a Senior Associate with the Dallas office of Kennedy Law, PC. She may be reached at 214-716-4345.