Does the Octane Fitness Standard for Determining if an Award of Attorneys' Fees is Appropriate in Patent Cases Apply when Such Fees are Sought Under the Lanham Act?  All Circuits that Have Considered the Issue Say "Yes!"

January 2020

In 2014 the Supreme Court established a new standard for determining whether a patent case is “exceptional” for purposes of awarding the prevailing party its reasonable attorneys’ fees under 35 U.S.C. 285. Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014).  Under Octane Fitness, “an ‘exceptional’ case is simply one that 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. District courts may determine whether a case is ‘exceptional’ in the case-by-case exercise of their discretion, considering the totality of the circumstances.” 572 U.S. at 554.  The Court identified a nonexclusive list of factors to consider when making this determination, including “frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.” Id. at 554, n.6.

A majority of circuits have extended the Octane Fitness standard to fee award determinations in Lanham Act cases under 15 U.S.C. § 1117(a), which contains the same language as the fee-shifting statute in patent cases that the Supreme Court interpreted in Octane Fitness.  The most recent circuit to formally adopt and apply Octane Fitness to § 1117(a) is the Seventh Circuit. LHO Chicago River, LLC v. Perillo, 942 F.3d 384 (7th Cir. Nov. 8, 2019).  No circuit to date appears to have rejected Octane Fitness’s applicability in this context.  The Tenth and D.C. circuits are the only two which have yet to address the issue. LHO Chicago River, 942 F.3d at 388, n.5.