Hot Topics In Trademark Law 2015 Series: How The Supreme Court's Octane Fitness Decision Addressing 'Exceptional Cases' In The Patent Context Is Affecting Lanham Act 'Exceptional Cases'

Note: This blog post is part of a series that reviews and discusses a number of significant trademark-related decisions handed down in 2015, including two from the U.S. Supreme Court and several from the U.S. Court of Appeals for the Federal Circuit and other Circuit Courts. Going forward, these rulings will impact how parties protect their trademark assets, including in particular the strategies that parties will need to employ to maximize their likelihood of success in litigation. To follow the entire blog series, click here.

Both the Lanham Act and the Patent Act allow an award of attorneys' fees to a prevailing party in an "exceptional case." See 15 U.S.C. 1117(a) (i.e., Lanham Act Section 35(a)); 35 U.S.C. 285. The "exceptional case" provision is identical in the two statutes; indeed, Congress referenced the patent "exceptional case" statute when it enacted the trademark "exceptional case" statute. Id.; See S.Rep. No. 93-1400, at 2 (1974), reprinted in 1974 U.S.C.C.A.N. 7132, 7133. Therefore, it is natural that courts have relied on patent-related "exceptional case" jurisprudence to construe the identical Lanham Act statute, particularly in determining when a case is "exceptional," thereby warranting an award of attorneys' fees. Id.; Fair Wind Sailing, Inc. v. Dempster, 764 F.3d 303, 314-15 (3d Cir. 2014) (noting that the court has "'look[ed] to the interpretation of the patent statute for guidance' in interpreting § 35(a)" of the Lanham Act, 15 U.S.C. 1117(a) (citations omitted)). The landscape of "exceptional cases" in patent litigation changed dramatically in 2014, and this change has begun making its way into trademark litigation. We anticipate that this will continue, and that all Circuits will adopt for trademark litigation the broader definition of when a case is "exceptional" that now controls in patent litigation. The Supreme Court significantly broadened the meaning of an "exceptional case" in the patent context in 2014. See Octane Fitness, LLC v ICON Health & Fitness, Inc., 134 S.Ct. 1749 (2014). In Octane Fitness, the Court rejected the Federal Circuit's rigid two-part analysis for determining whether a case is "exceptional" for purposes of the Patent Act. Id. at 1755. Instead, the Court relied on the plain and ordinary meaning of "exceptional," including dictionary definitions and concluded:

[A]n 'exceptional' case is simply one that stands out from others with respect to the substantive strength of a party's litigating...