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Teal Bay Alliances, LLC v. Southbound One, Inc.

United States District Court, D. Maryland

January 26, 2015

TEAL BAY ALLIANCES, LLC, Plaintiff
v.
SOUTHBOUND ONE, INC. Defendant

MEMORANDUM AND ORDER RE: COSTS/FEES

MARVIN J. GARBIS, District Judge.

The Court has, as set forth in the Bench Trial Decision issued herewith, decided that Plaintiff Teal Bay Alliances, LLC ("Teal Bay") has failed to prove any of the claims it asserts against Defendant Southbound One, Inc. ("Southbound"). Southbound seeks to have "[t]he Court find this to be an exceptional case pursuant to 15 U.S.C. § 1117(a), and award[] Defendant its reasonable attorneys' fees pursuant to 15 U.S.C. § 1117(a)." Answer 7, Prayer for Relief ¶ 4, ECF No. 23.

Title 15 U.S.C. § 1117 provides for recovery for violations of any right of the registrant of a mark registered in the Patent and Trademark Office. Section 1117(a) states, in pertinent part:

The court in exceptional cases may award reasonable attorney fees to the prevailing party.

The United States Court of Appeals for the Fourth Circuit has held that a prevailing alleged infringer may be awarded attorney's fees under this provision in exceptional cases. See, e.g., Retail Servs., Inc. v. Freebies Publ'g, 364 F.3d 535, 550 (4th Cir. 2004).

The term "exceptional" is not defined in the statute.

I. THE STANDARD FOR AN EXCEPTIONAL CASE

A. The Octane Fitness (Patent Case) Decision

In Octane Fitness, LLC v. Icon Health & Fitness, Inc., ___ U.S. ___, 134 S.Ct. 1749 (2014), a patent infringement action, the Supreme Court defined the term "exceptional" as used in the Patent Act, 35 U.S.C. § 285, which states - in language identical to that used in 15 U.S.C. § 1117(a):

The court in exceptional cases may award reasonable attorney fees to the prevailing party.

The Supreme Court rejected the Federal Circuit's prior standard requiring culpable conduct and held that "an 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." Octane Fitness, 134 S.Ct. at 1756. The Court stated that "[d]istrict courts may determine whether a case is exceptional' in the case-by-case exercise of their discretion, considering the totality of the circumstances." Id.

The Court further rejected the Federal Circuit's requirement that a party establish exceptionality by clear and convincing evidence and required proof by a preponderance of the evidence. Id. at 1758.

B. Applicability to Trademark Cases

The Fourth Circuit has not yet addressed the question of whether the Supreme Court's Octane Fitness definition of an exceptional case ...


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