2014 SCOTUS Ruling Has Led to More Fee-Shifting in Trademark Cases

An increasing number of prevailing patent litigants are seeking—and receiving—attorneys’ fees due to a 2014 Supreme Court ruling that replaced a stricter fee-shifting (“loser pays”) requirement with a more discretionary standard. That same ruling is expected to also produce an uptick in fees awarded to trademark dispute winners.

The Business Trial Group handles trademark and other intellectual property disputes on a contingency-fee basis. If your copyright, patent, trademark, trade dress, or trade secret was infringed upon, find out how we can help during a free case review.

Octane Standard Being Applied to Trademark Cases

The Supreme Court’s April 2014 ruling in Octane Fitness v. Icon Health made it significantly easier for judges to order losing parties in patent cases to pay the winning party’s attorneys’ fees.

Justices ruled in Octane that attorneys’ fees can be awarded if the case “stands out from the others” based on the “totality of the circumstances.” This decision rejected the previous rule that sanctions should be imposed only for cases that were “objectively baseless” and “brought in subjective bad faith.”

It is probably just a matter of time before Octane is a national standard in trademark litigation.

Octane applied to patents, not trademarks, but many inferred that Octane would change the analysis of fee-shifting under the Patent Act and the Lanham Act—the federal trademark statutes that until recently allowed fees to be awarded only in “exceptional” cases.

That inference has largely proven to be correct. Since April 2014, several lower courts have applied the fee-shifting standard established in Octane to trademark cases, including most notably the Ninth Circuit, which recently overturned its precedent of awarding fees in “malicious, fraudulent, deliberate or willful” cases and replaced it with the Octane standard.

Legal experts agree that it is probably just a matter of time before Octane is a national standard in trademark litigation.

“Should courts continue to apply Octane Fitness to trademark infringement disputes, prevailing litigants should have a better shot at recovering their attorneys’ fees and costs,” said Business Trial Group intellectual property attorney Pete Albanis. “This is an important part of the evaluation process prior to filing suit and throughout the lifespan of a case.”

Research Confirms Patent Litigation Changes

While there is not yet hard data confirming Octane’s effect on trademark litigation fee-shifting, if patent litigation is any indication, courts will be more inclined to award fees in trademark cases.

For example, a Federal Circuit Bar Association report found that motions for fee-shifting in patent cases were granted 36 percent of the time in the year following Octane, compared to 13 percent of motions in the year preceding Octane. And in April 2016, the Washington Legal Foundation reported that requests for attorneys’ fees in patent cases were up 56 percent since the ruling.

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Implications for Trademark Litigants

With fee-shifting, there is an opportunity for trademark plaintiffs to recover not only their damages, but their attorneys’ fees and costs. This is an important consideration for individuals and businesses defending their trademarks against illegal usage, as well as for those being unjustly accused of trademark infringement.

A New Jersey federal court granted attorneys’ fees to a television producer that preemptively sued a county for accusing him of misusing the county’s logo in a TV program. The judge, citing Octane, ruled that the county’s positions were “objectively unreasonable.”

In addition, judges may now award fees in response to litigation conduct. A Florida federal judge cited Octane when awarding fees to a car dealership after its trademark lawsuit against a rival dealership was ignored. Fees were warranted, said the judge, because the defendant’s actions were “patently unreasonable.”

In these and similar trademark cases, defendants argued that attorneys’ fees should not be awarded to plaintiffs because their conduct was not “malicious, fraudulent, deliberate or willful.” But under Octane, judges may be more inclined to apply a flexible standard when deciding whether fees are warranted.

BTG Charges No Up-Front Fees for Trademark Litigation

Business Trial Group attorneys represent clients nationwide in trademark infringement and related intellectual property cases. Our clients include small businesses, individuals and artists, and all different entities in-between.

BTG successfully represented a trademark owner in a lawsuit against a corporate giant.

Our contingency-fee model allows individuals and businesses to obtain just results even against much wealthier opponents.

For example, in one recent dispute, we represented the owner of a federally-registered trademark for apparel who was selling his clothes out of the trunk of his car. A corporate giant that’s one of the largest apparel companies in the world began to use a virtually identical mark. Our lawyers were retained to pursue this reverse confusion trademark infringement claim (a classic “David vs. Goliath” scenario) and, ultimately, achieved a positive result for our client.

The Business Trial Group handles numerous types of trademark-related claims on a contingency-fee basis, including:

• Direct trademark infringement
• Reverse confusion trademark infringement
• Trade dress infringement
• Trademark dilution
• Unfair competition
• Common law trademark infringement
• False designation of origin

To discuss your dispute with one of our intellectual property attorneys, please contact us.