The Lanham Act is the federal statute addressing trademark lawsuits. Under the Lanham Act, a court may “in exceptional cases award reasonable attorney fees to the prevailing party.”
The US Supreme Court explained, in the patent infringement context:
“[A]n ‘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.” Octane Fitness, LLC v. Icon Health, 572 U.S. 545, 554 (2014).
While for years federal circuits were split on the meaning of “exceptional” in the statute, many federal circuits have adopted this standard for trademark lawsuits. The Eighth Circuit, for instance, cited Octane with approval. Safeway Transit LLC v. Disc. Party Bus, Inc., No. 18-2990 (8th Cir. April 6, 2020). In evaluating whether a case is “exceptional,” courts may consider a nonexclusive list of factors, 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 16.