Supreme Court Decision In Patent Case May Make It Easier To Obtain Attorneys’ Fees In Trademark And Trade Dress Cases

In Octane Fitness LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014), decided in April 2014, the Supreme Court lowered the bar for obtaining attorneys' fees in patent infringement cases. In particular, the Supreme Court replaced the previously restrictive interpretation of an "exceptional case" that qualifies for the award of attorneys' fees under § 285 of the Patent Act (chapter 35 of the United States Code (U.S.C.)) with a lower, more discretionary standard. We previously provided an analysis of Octane Fitness, and the related Highmark Inc. v. Allcare Health Mgmt. Sys., Inc. decision in an April 30, 2014 advisory. Since then, there has been a rash of litigants attempting to cash in on their success in intellectual property litigation of all types—including trademark and trade dress litigation brought under the Lanham Act (15 U.S.C.). Section 1117(a) of the Lanham Act includes a provision for awarding attorneys' fees that is identical to § 285 of the Patent Act; however, because Octane Fitness only expressly addresses exceptional cases under § 285 of the Patent Act, courts are struggling with whether to replace the prevailing standard in their Circuit with the new, lower standard in cases brought under the Lanham Act. So far, courts are divided as to whether Octane Fitness applies to the Lanham Act, although a greater weight of authority exists in favor of applying the Octane Fitness standard to § 1117(a) of the Lanham Act.

The only Circuit Court to have directly addressed the issue, the Third Circuit, held that the Octane Fitness analysis applies to trademark and trade dress infringement claims brought under § 1117(a) of the Lanham Act. See Fair Wind Sailing, Inc. v. Dempster, 764 F. 3d 303 (3rd Cir. 2014). According to the Third Circuit, references to the Lanham Act within the Octane Fitness opinion send "a clear message that [the Court] was defining 'exceptional' not just under the fee provision in the Patent Act, but for the fee provision of the Lanham Act as well." However, the Sixth Circuit called this determination into question by reversing a district court's award of attorneys' fees under the standard for that Circuit. See Premium Balloon Accessories, Inc. v. Creative Balloons Mfg., Inc., 573 Fed. Appx. 547 (6th Cir. 2014). The Sixth Circuit did not expressly consider whether Octane Fitness might apply, but merely reversed the lower court's decision on an abuse of discretion standard.

Decisions at the district court level...