Ninth Circuit Could Reconsider Attorneys’ Fees Standard for Federal Trademark Litigation

In Octane Fitness v. ICON Health & Fitness (2014), the Supreme Court changed the standard for recovering attorneys’ fees in patent litigation.  Rejecting a “rigid and mechanical formulation,” the Court adopted a looser “totality of the circumstances” test.  Earlier this year, a Ninth Circuit panel held that the Octane Fitness standard did not apply in trademark cases.  But now the Ninth Circuit has ordered an en banc rehearing of the panel’s decision.

In SunEarth, Inc. v. Sun Earth Solar Power Co., the district court permanently enjoined Sun Earth Solar Power from using “Sun Earth” in the U.S. because that use infringed SunEarth’s trademarks.  But the court denied attorneys’ fees and SunEarth appealed.  The Ninth Circuit relied on its test of “malicious, fraudulent, deliberate or willful” infringement, instead of the Octane Fitness standard, and affirmed the injunction and the denial of attorneys’ fees.

Even if the Ninth Circuit adopts the Octane Fitness standard for trademark cases, the Sun Earth decision might not change. The Ninth Circuit panel explained, “we have little doubt that this case is unexceptional even under Octane Fitness’s totality of the circumstances test.” But adopting the Octane Fitness standard would alter the course of trademark litigation in the Ninth Circuit.