The Octane Standard for Exceptional Cases Applies to Lanham Act Cases

September 2017

 

Romag Fasteners, Inc. v. Fossil, Inc., 2016-1115, -1116, -1842 (Fed. Cir. Aug. 9, 2017)

 

In Romag Fasteners, the Federal Circuit considered what constitutes an “exceptional” Lanham Act case justifying an award of attorneys’ fees to the prevailing party. The court concluded that the standard is the same as the one set out for patent cases in the Supreme Court’s 2015 Octane decision. Under the Octane standard, a case is exceptional if, in the totality of the circumstances, it “stands out from others” with respect to the substantive strength of a party’s position, or the unreasonable manner in which the case was litigated.

After learning that certain Fossil products incorporated counterfeit Romag magnets, Romag filed suit, asserting patent and trademark infringement. Romag prevailed, and the district court awarded attorneys’ fees for the patent infringement claims under the Octane standard. The court declined to award fees for the trademark infringement, however, applying a pre-Octane case under which fees were awarded only in cases of bad faith or fraud. Romag appealed the denial of fees for its trademark claims.

Because the Second Circuit had not yet considered whether to apply Octane to fee awards in trademark infringement cases, the Federal Circuit had to decide how the Second Circuit would decide the issue. It noted that every other circuit to consider the issue had applied Octane. It also observed that the “exceptional” case language of the Patent Act and the Lanham Act is identical. Finally, it noted that the legislative history of the Lanham Act discussed a “strong connection” with the Patent Act.

The Federal Circuit therefore remanded the case for the district court to apply the Octane standard in considering whether to award attorneys’ fees to Romag.

Key Takeaway: The Octane standard for exceptional cases applies to Lanham Act as well as patent cases.