Like § 285 of the Patent Act, Section 35(a) of the Lanham Act (15 U.S.C. § 1117(a)) permits the recovery of reasonable attorneys’ fees only “in exceptional cases.” In fact, the Octane Fitness Court noted that the Lanham Act fee provision is “identical” to § 285 of the Patent Act. The Third Circuit interpreted this as a clear message from the U.S. Supreme Court that it “was defining ‘exceptional’ not just for the fee provision in the Patent Act, but for the fee provision in the Lanham Act as well.”
Based on Octane Fitness and Fair Wind Sailing, a prevailing party under the Lanham Act (either plaintiff or a defendant) in the Third Circuit, must show the following to be awarded attorneys’ fees: (a) an unusual discrepancy in the merits of the positions taken by the parties; or (b) the losing party has litigated the case in an “unreasonable manner.” Whether litigation positions or litigation tactics are “exceptional” enough to warrant attorneys’ fees is to be determined on a case-by-case basis by the district courts based on the totality of the circumstances.
By removing a threshold finding of culpable behavior, the Courts are making it easier to award attorneys’ fees if there is a finding that the litigation was brought or conducted in an abusive manner. Time will tell if Octane Fitness and Fair Wind Sailing have this impact.