Faier on the law: LHO Chicago River, L.L.C. v. Rosemoor Suites, LLC, 2021 WL 649200, Feb. 19, 2021 (CA7) – If you want attorney fees, then follow Octane Fitness!

The issue in this case is award of attorney fees in an aborted trademark infringement matter.

Can counsel for the defendant get legal fees where the owner of a trademark withdrew the suit after an adverse finding in a Motion for Preliminary Injunction where the mark was rather descriptive?

This is the case of the two Hotel Chicago properties. Senior user sued junior user for infringement and asked for a preliminary injunction. The magistrate judge recommended issue of the preliminary injunction. When the circuit judge looked at the matter, he disagreed on the key issue of the trademark significance of the mark. The judge, Hon. Judge Kocoras, found that senior use had failed at that point to show that it was likely to show secondary meaning in the mark and, since that was the case, senior user would have a tough time showing it had a protectable mark. Senior user elected voluntarily to dismiss its claims.

Defendant then requested $500,000 in attorney fees arguing that this case was “exceptional” under the Lanham Act, the U.S. federal trademark act. Judge Kocoras denied the request under the “abuse of process” standard of Burford vs. Accounting Practice Sales, Inc. Defendant appealed saying that Judge Kocoras should have analyzed the case using the test in Octane Fitness to determine if the case was exceptional. The Court of Appeals agreed and the case was remanded back to Judge Kocoras for application of the correct standard.

The test in Octane Fitness is (1) The strength of a party’s litigating position compared to the position of other litigants and (2) the other side’s conduct in the litigation.

Judge Kocoras, on remand, held that the case was not exceptional. Defendant again appealed. The Court of Appeals affirmed Judge Kocoras’ finding. as not an abuse of his discretion. Essentially, the Court of Appeals points to the fact that the finding of the strength of the mark was at issue and as evidence of the potential for disagreement on strength of the mark was the different views of the magistrate and Judge Kocoras. As for the manner in which plaintiff litigated, barring one email early on from plaintiff questioning the protectability of the mark, there was nothing exceptional about the conduct.

Bottom line: on the question of attorney fees in a Lanham Act case, remember that the test is from Octane Fitness. ###