As a trademark attorney, clients often ask about how they can get “the other side” to pay for the cost of litigating the enforcements of their trademarks in a trademark infringement lawsuit. Of course, most of hem have little or no knowledge about how and when attorney’s fees can be awarded in U.S. litigation let alone litigation involving trademarks and it is a bit tortured to have to explain how and why the bar is set so high.
In an article entitled, “The 9th Circuit Injects Some “Octane” into the Lanham Act Attorneys’ Fee Provision” the good attorneys over at Dorsey & Whitney LP recently reported on a 9th Circuit Court of Appeals case that may have ramped up the possibility of attorney’s fee awards in such cases,
In the immortal words of the most recent Nobel Laureate in literature, “the times they are a changin.’” Section 35(a) of the Lanham Act provides that “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” Until just last week, the Ninth Circuit had historically interpreted that provision to mean that a plaintiff must prove that the defendant engaged in “malicious, fraudulent, deliberate or willful” infringement. Further, the Court reviewed fee awards de novo, instead of for an abuse of discretion. That test for an award of fees and the de novo standard of review are now officially blowin’ in the wind, compliments of the Ninth Circuit’s en banc decision in Sunearth, Inc. v. Sun Earth Solar Power, Co. Thus, successful litigants in Lanham Act cases in the Ninth Circuit should now find it a bit easier to recover an award of attorneys’ fees.
This all came about as a result of the U.S. Supreme Court’s 2014 decision in Octane Fitness, LLC v. Icon Health and Fitness, Inc. In that case, the Court interpreted the identical “exceptional cases” language from the Patent Act’s attorneys’ fee provision, 35 U.S.C. § 285. The Court rejected the notion that “exceptional” required a showing of bad faith or other culpable conduct before fees could be awarded in patent cases. Instead, the Court held that “exceptional” simply meant “uncommon,” “rare,” or “not ordinary.” Accordingly, an exceptional case is “simply one that 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.” The Court also rejected the heightened “clear and convincing” burden of proof, in favor of a preponderance of the evidence standard.
On the same day the Supreme Court handed down its decision in Octane Fitness, it also decided that a district court’s award of fees under the Patent Act should be reviewed for abuse of discretion. Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S. Ct. 1744, 1748–49 (2014).
For the rest of the story, check out Attorney’s Fees in the 9th Circuit