• 7th Circuit Cuts Through Lanham Act Attorneys' Fees "Jungle"
  • December 1, 2010 | Author: Richard J. Leighton
  • Law Firm: Keller and Heckman LLP - Washington Office
  • Bad cases may make bad law, but they also can result in the prevailing party being awarded attorneys' fees under the Lanham Act's "exceptional cases" provision - whatever that means these days.

    The Seventh Circuit Court of Appeals now "offers a pathway through the semantic jungle" of other trademark and false advertising law on what is an "exceptional case." *

    BACKGROUND

    Plaintiff not only failed to prove its allegation that Defendant made a false claim about its infrared lamps, the trial court found that the case was initiated to coerce a price reduction for the lamps. Defendant was granted summary judgment and attorneys' fees. Plaintiff appealed.

    DECISION

    The Seventh Circuit affirmed, stating that it would attempt to clarify the "exceptional cases" provision due to "the surprising lack of agreement" among the courts.

    Judge Posner's opinion for the panel delineates the differences among the circuits and delves into the relevant legislative history of the Act. After plumbing the tort of abuse of process, the court held:

    We conclude that a case under the Lanham Act is "exceptional," in the sense of warranting an award of reasonable attorneys' fees to the winning party, if the losing party was the plaintiff and was guilty of abuse of process in suing, or if the losing party was the defendant and had no defense yet persisted in the trademark infringement or false advertising for which he was being sued, in order to impose costs on his opponent.

    The court clarified that all elements of the tort of abuse of process need not be proved when seeking fees under the Act:

    It should be enough to justify the award if the party seeking it can show that his opponent's claim or defense was objectively unreasonable ¿ was a claim or defense that a rational litigant would pursue only because it would impose disproportionate costs on his opponent ¿ in other words only because it was extortionate in character if not necessarily in provable intention.