Yes, attorneys’ fees are available in what are called “exceptional cases” of trademark infringement. The Lanham Act — the federal trademark statute — expressly allows a federal court to award reasonable attorneys’ fees in “exceptional cases” of trademark infringement to the prevailing party. 15 U.S.C. § 1117(a). This is a statutorily-created exception to the normal rule that litigants are required to bear their own attorneys’ fees and litigation expenses even if they are successful in the litigation. Generally, an exception must be contained in a statute or in a contract. The Lanham Act created such an exception.

The Lanham Act does not, however, define the term “exceptional.” Thus, over the years, the federal courts have determined the word “exceptional” allows an award of attorneys’ fees in trademark infringement cases where the acts of infringement can be characterized as malicious, fraudulent, deliberate or willful. Some courts have refined this further by defining “willful” as “knowing” or as “without legal justification.”

The evaluation of whether a case is “exceptional” is a “totality of the circumstances” approach. That is, the courts will look to a large number of potential factors which may be evaluated on a case-by-case basis. Among the factors that federal courts will consider are these:

• The substantive strength of a party’s litigating position in the court and before the Trademark Appeal Board
• Whether the case was litigated in an unreasonable manner
• Clarity of the governing law and judicial precedents on the specific legal points at issue
• The nature of the alleged infringement — that is, was the infringing trademark exactly the same or confusingly similar?
• The specific facts of the case with respect to what was known at the time of alleged trademark infringement
• Other factors such as registration and fame of the infringed trademark

Sometimes, it is easy for a federal court to deem a trademark case to be exceptional. For example, consider the recent case of WM. WRIGLEY JR. COMPANY v. Conde, Case No. 5:21-cv-00777 JWH (US Dist. CD California 2022). That case involved Wrigley’s various trademarks and trade dress for SKITTLES and STARBURST candies. The defendant began producing, marketing and selling cannabis-extract “medicinal candies” called

• “Medicated Skittles” — sold in four flavors: “Original,” “Sour,” “Wild Berry,” and “Seattle Mix”
• “Medicated Cannaburst Gummies” — sold in three flavors: “Original Sours,” “Berry Sours,” and “Tropical”)

As the court described, the “Medicated Skittles” were in a packages that used the SKITTLES trademark in plain text and white block lettering, used the distinctive rainbow designs and images of candy-coated lentils with an “S” imprinted thereon (like a typical SKITTLES) and a design featuring such candy lentils cascading along an upside-down rainbow. The court found that these marks, images and trade dress were “identical to, substantially indistinguishable from, and/or imitations of the SKITTLES® Mark and Trade Dress.” The court also noted that the flavors were identical to flavors offered by Wrigley. The court made similar findings with the respect to the “Cannaburst Gummies.”

From the foregoing, it was not difficult for the court to conclude that the trademark infringement case was an “exceptional” one. The court granted judgment in favor of Wrigley and awarded attorneys fees.

Contact Revision Legal

If you have questions about creating and registering a trademark or need to litigate a trademark infringement case, contact the trademark litigators at Revision Legal.You can contact us through the form on this page or call (855) 473-8474.

The Octane Fitness Standard and Its Impact on Fee Awards

The landscape for attorneys’ fees in trademark cases shifted significantly with the Supreme Court’s 2014 decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014). Although technically a patent case interpreting identical “exceptional case” language in the Patent Act, the Octane Fitness standard has been broadly applied to Lanham Act exceptional case determinations. Prior to Octane Fitness, many circuits required a showing of subjective bad faith to establish an exceptional case. Octane Fitness replaced that demanding standard with a more flexible one: a case is “exceptional” simply when it “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.”

This lower threshold has meaningful practical consequences. It is now easier for both prevailing plaintiffs and prevailing defendants to obtain fee awards. A plaintiff who prevails against a defendant that engaged in blatant, deliberate trademark infringement can more readily obtain fees. Conversely, a defendant who successfully defeats a weak, meritless trademark claim brought in bad faith or litigated unreasonably can now more readily recover its defense costs from the plaintiff.

Willful Infringement and Fee Awards: How Courts Assess Intent

Willful trademark infringement remains the most common basis for a finding that a case is exceptional and justifying a fee award to the plaintiff. Courts look at the totality of circumstances to assess willfulness, including: whether the infringer conducted a trademark clearance search before adopting the mark (and what that search revealed); whether the infringer continued infringement after receiving a cease and desist letter; whether the infringer attempted to conceal its infringement; whether the infringing mark is identical to or very closely mimics the plaintiff’s mark; and the overall commercial sophistication of the defendant. A defendant who copies a well-known mark with obvious intent to free-ride on its goodwill will almost always face a finding of willfulness, which opens the door to an exceptional case determination and fee shifting.

Calculating Reasonable Attorneys’ Fees Under the Lanham Act

When a court awards attorneys’ fees under 15 U.S.C. § 1117(a), it calculates the amount using the “lodestar” method — the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate for attorneys of comparable skill and experience in the relevant market. Courts scrutinize attorney billing records carefully and may reduce the fee award for hours that were excessive, redundant, or otherwise not reasonably expended. In complex trademark cases, attorneys’ fee awards can reach hundreds of thousands or even millions of dollars, making the exceptional case determination a high-stakes issue.

In addition to attorneys’ fees, Section 1117(a) also allows a court to award enhanced profits and damages — up to three times actual damages in cases of willful infringement — on top of the fee award. These combined remedies make a winning trademark infringement case against a willful infringer extraordinarily valuable to the prevailing plaintiff.

Contact Revision Legal for Trademark Litigation Counsel

Whether you are a trademark owner seeking to recover attorneys’ fees from a willful infringer, or a business defending against a weak trademark claim and seeking to recover your defense costs from an overreaching plaintiff, Revision Legal’s trademark litigation attorneys have the experience and track record to pursue the best outcome. Trademark litigation is complex and fee-shifting issues are among the most strategic decisions in any trademark case. Call us today to discuss your situation.