Circuit Backs One Attorneys’ Costs Guideline for Patent, TM Cases

The U.S. Supreme Court’s standard for identifying whether to award attorneys’ costs to the winner in a patent dispute need to be used to hallmark cases as well, a federal appeals court ruled May 3.

In denying offender Jeffrey Todd DeShong’s motion for lawyers’ costs, the high court applied the incorrect standard of what constitutes a remarkable case, the U.S. Court of Appeals for the 5th Circuit ruled.

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In the decision, the 5th Circuit joins numerous other federal appeals courts in discovering that the very same standard must request awarding lawyers’ costs in both patent and trademark cases.

Complainant Clive Baker and his organization, the Office of Medical and Scientific Justice Inc., sued DeShong for trademark infringement under the Lanham Act. The OMSJ has a service called the HIV Innocence Group, and DeShong has a number of websites, consisting of www.hivinnocencegrouptruth.com, which claim to expose the OMSJ’s misdeeds. Baker’s suit is based upon claims that DeShong’s site infringes his hallmarks.

The district court dismissed the claims, and DeShong moved for lawyers’ costs under 1117 of the Lanham Act. The court rejected the motion, saying that the case was not exceptional because DeShong did not prove by clear and persuading proof that the plaintiffs brought the match in bad faith.

Section 1117 licenses attorneys’ costs awards to the prevailing party in extraordinary hallmark cases.

The 5th Circuit reversed. It discovered that the Supreme Court’s judgment in Octane Fitness LLC v. ICON Health & Fitness Inc., 134 S. Ct. 1749, 2014 BL 118431, 188 L. Ed. 2d 816, 110 U.S.P.Q. 2d 1337, 134 S. Ct. 1749, 2014 BL 118431, 188 L. Ed. 2d 816, 110 U.S.P.Q. 2d 1337 (U.S. 2014) uses, even though that case discussed the area of law licensing attorneys’ fees award in patent and not trademark cases.

The court explained that 1117 of the Lanham Act and the Patent Act’s charges provision contain identical language, which indicates that Octane applies to hallmark cases. Under this analysis, the celebration looking for costs does not need to prove that the other party acted in bad faith. The winning celebration does not have to show that a case was exceptional under the higher clear and convincing requirement (83 PTD, 4/30/14).

The high court erred in asking for both bad faith and proof under the higher requirement. Instead, an extraordinary case justifying a lawyers’ charges award is one that stands out from others with respect to the substantive strength of a celebration’s prosecuting position, or where the losing celebration litigated the case in an unreasonable way.

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