September 26, 2019
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. l:16-cv-6863 -
Charles P. Kocoras, Judge.
Bauer, Manion, and St. Eve, Circuit Judges.
Manion, Circuit Judge.
appeal the denial of their request for Lanham Act attorney
fees following the plaintiff's voluntary dismissal of its
trademark infringement suit. The lone question here is
whether the Supreme Court's decision in Octane
Fitness, LLC v. ICON Health & Fitness, Inc., 572
U.S. 545 (2014)-a patent case-should guide district
courts faced with Lanham Act attorney fees applications. Most
of our sister circuits have answered that question in the
affirmative, but we have never addressed the issue. The
opportunity now presents itself, and for all the reasons
herein, we join our sister circuits in holding that
Octane controls and remand for further
Chicago River, L.L.C., owns an upscale, downtown Chicago
hotel that underwent a branding change in February 2014 when
the establishment became "Hotel Chicago," a
signature Marriott venue. Around May 2016, Joseph Perillo and
his three associated entities-Rosemoor Suites, LLC, Portfolio
Hotels & Resorts, LLC, and Chicago Hotel,
LLC-opened their own "Hotel Chicago"
only three miles from LHO's site. LHO then sued
Defendants for trademark infringement and unfair competition
under the Lanham Act, 15 U.S.C. § 1125(a), and for
trademark infringement and deceptive trade practices under
Illinois state law. The litigation dragged on for more than a
year until LHO moved to voluntarily dismiss its claims, with
prejudice. The district judge granted LHO's motion and
entered judgment on February 21, 2018.
made a post-judgment request for attorney fees pursuant to 15
U.S.C. § 1117(a), which permits the district court to
award reasonable fees to the prevailing party in
"exceptional cases." In their attorney fees
briefing, the parties identified two distinct standards for
determining such exceptionality: (1) this Circuit's
prevailing standard, that a case is exceptional under §
1117(a) if the decision to bring the claim constitutes an
"abuse of process"; and (2) the more relaxed
totality-of-the-circumstances approach under the Patent Act
that the Supreme Court announced in Octane Fitness, LLC
v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014).
When Defendants moved for attorney fees, we had not yet
provided guidance on Octane's applicability in
this context, though several of our sister circuits had
extended Octane to the Lanham Act. It comes as no
surprise then, that when the district judge ruled on
Defendants' request, he acknowledged Octane but
nevertheless adhered to our "abuse-of-process"
standard. The judge found LHO had not brought an exceptional
case warranting attorney fees. Defendants appeal.
Lanham Act contains the following fee-shifting language:
"The court in exceptional cases may award reasonable
attorney fees to the prevailing party." 15 U.S.C. §
1117(a). Our current standard for identifying
"exceptional" trademark cases comes from
Burford v. Accounting Practice Sales, Inc., 786 F.3d
582, 588 (7th Cir. 2015), and Nightingale Home
Healthcare, Inc. v. Anodyne Therapy, LLC, 626 F.3d 958,
963-66 (7th Cir. 2010). Burford and
Nightingale hold a case "exceptional"
under § 1117(a) if it amounts to an "abuse of
process." Burford, 786 F.3d at 588 (citing
Nightingale, 626 F.3d at 963-64). An abuse of
process occurs when a claim is: (1) "objectively
unreasonable because it is one a rational litigant would
pursue only because it would impose disproportionate costs on
his opponent" (in other words, extortionate in nature);
or (2) when a party brings a frivolous claim with the purpose
of obtaining an advantage external to the litigation,
"'unrelated to obtaining a favorable
judgment.'" Id. (quoting
Nightingale, 626 F.3d at 966).
Patent Act contains an identical provision: "The court
in exceptional cases may award reasonable attorney fees to
the prevailing party." 35 U.S.C. § 285. Addressing
§ 285 in 2014, the Supreme Court determined:
[A]n "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. District courts may
determine whether a case is "exceptional" in the
case-by-case exercise of their discretion, considering the
totality of the circumstances.
Octane, 572 U.S. at 554. Among the circumstances for
consideration, the Court pointed to a nonexclusive set of
factors it identified earlier when addressing the Copyright
Act's similar fee-shifting provision. See id. at
554 n.6 (citing Fogerty v. Fantasy, Inc., 510 U.S.
517, 534 n.19 (1994)). Those factors include
"frivolousness, motivation, objective unreasonableness
(both in the factual and legal components of the case) and
the need in particular circumstances to advance
considerations of compensation and deterrence."
Id. (internal quotation marks and citation omitted).
Court reached this holding by construing the term
"exceptional" in accordance with the word's
ordinary meaning. Octane, 572 U.S. at 553-54. In
particular, while highlighting the identical language shared
by the Patent and Lanham Acts, the Court relied on Noxell
Corp. v. Firehouse No. 1 Bar-B-Que Rest., a trademark
case in which the D.C. Circuit interpreted the term
"exceptional" in § 1117(a) to mean
"uncommon" or "not ...