In SunEarth Inc. v. Sun Earth Solar Power Co., No. 15-16096 and 13-17622 (9th Cir. 2016) (Available Here), the Ninth Circuit adopted Octane Fitness, LLC. v. ICON Health & Fitness, Inc., 134 S.Ct. 1749 (2014) and held that district courts analyzing a request for attorney fees under the Lanham Act should examine the totality of the circumstances to determine if the case was exceptional, exercising equitable discretion in light of the nonexclusive factors identified in Octane Fitness and Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994) and using a preponderance of the evidence.
The Court noted that they interpret the fee-shifting provisions in the Patent Act and the Lanham Act in tandem. In Octane Fitness, the Supreme Court clarified how courts should analyze fee requests under the Patent Act. In analyzing a request for fees under the Patent Act, one should look to the totality of circumstances to determine if the infringement was exceptional. An exceptional case is 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. The nonexclusive list of factors include frivolousness, motivation, objective unreasonableness, and the need in particular circumstances to advance considerations of compensation and deterrence. The Ninth Circuit found this analysis equally applicable to a request for attorney fees under the Lanham Act.
Additionally, the Ninth Circuit adopted the Supreme Court’s view that the Court of Appeal should review a district court’s award of fees under the Patent Act for abuse of discretion. See Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 134 S.Ct. 1744 (2014). The Ninth Circuit found this review equally applicable to a request for attorney fees under the Lanham Act.
The Ninth Circuit noted that the Third, Fourth, Fifth and Sixth Circuits have recognized that Octane Fitness changed the standard for fee shifting under the Lanham Act. The Ninth Circuit agreed with these Circuits finding that the Octane Fitness and Highmark decisions have altered the analysis of fee applications under the Lanham Act.