Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-13-17622/USCOURTS-ca9-13-17622-1/pdf.json

Parties Involved:
NBSolar USA Inc.
Appellee
Sun Earth Solar Power Co., Ltd.
Appellee
SunEarth, Inc.
Appellant
The Solaray Corporation
Appellant

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SUNEARTH, INC., a California

corporation; THE SOLARAY

CORPORATION, a Hawaiian

corporation,

Plaintiffs-Appellants,

v.

SUN EARTH SOLAR POWER CO.,

LTD., FKA Ningbo Solar Electric

Power Co., Ltd., a Chinese

limited liability company;

NBSOLAR USA INC., a California

corporation,

Defendants-Appellees.

Nos. 13-17622

15-16096

D.C. No.

4:11-cv-04991-CW

OPINION

Appeal from the United States District Court

for the Northern District of California

Claudia Wilken, District Judge, Presiding

Submitted En Banc October 14, 2016*

San Francisco, California

Filed October 24, 2016

* The en banc court unanimously concludes this case is suitable for

decision without oral argument. See Fed. R. App. P. 34(a)(2).

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2 SUNEARTH V. SUN EARTH SOLAR POWER

Before: Sidney R. Thomas, Chief Judge, and M. Margaret

McKeown, Kim McLane Wardlaw, William A. Fletcher,

Ronald M. Gould, Richard A. Paez, Richard R. Clifton,

Jacqueline H. Nguyen, Paul J. Watford, John B. Owens,

and Michelle T. Friedland, Circuit Judges.

Per Curiam Opinion

SUMMARY**

Lanham Act / Attorneys’ Fees

The en banc court held that following Octane Fitness,

LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014),

district courts analyzing a request for attorney fees under the

Lanham Act should examine the totality of the circumstances

to determine if the case was exceptional, exercising equitable

discretion in light of the nonexclusive factors identified in

Octane Fitness and Fogerty v. Fantasy, Inc., 510 U.S. 517

(1994), and using a preponderance of the evidence standard. 

Pursuant to Highmark, Inc. v. Allcare Health Mgmt. Sys.,

Inc., 134 S. Ct. 1744 (2014), the court of appeals’ review of

the district court’s decision on fees awarded under the

Lanham Act is for abuse of discretion.

The en banc court overruled precedent to the contrary and

agreed with the majority of other circuits. The en banc court

remanded the case to the three-judge panel for the resolution

of remaining issues.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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SUNEARTH V. SUN EARTH SOLAR POWER 3

COUNSEL

Clark E. Proffitt and Stephen B. Mosier, Hayes SolowayP.C.,

Tucson, Arizona, for Plaintiffs-Appellants.

James J. Foster, Hayes Messina Gilman & Hayes LLC,

Boston, Massachusetts; Michael A. Albert and Eric J. Rutt,

Wolf Greenfield & Sacks P.C., Boston, Massachusetts; for

Defendants-Appellees.

OPINION

PER CURIAM:

We voted to rehear this case en banc to reconsider our

jurisprudence concerning fee awards in cases filed pursuant

to the Lanham Act, 15 U.S.C. § 1051 et seq.

Section 35(a) of the Lanham Act provides that “[t]he

court in exceptional cases mayaward reasonable attorneyfees

to the prevailing party.” 15 U.S.C. § 1117(a). Historically,

we have reviewed de novo a district court’s finding as to

whether a defendant’s infringement was “exceptional” within

the meaning of the Lanham Act’s fee-shifting provision. See,

e.g., Secalt S.A. v. Wuxi Shenxi Constr. Mach. Co., 668 F.3d

677, 687 (9th Cir. 2012). We have required that a plaintiff

show that a defendant engaged in “malicious, fraudulent,

deliberate or willful” infringement. See, e.g., Lindy Pen Co.

v. Bic Pen Corp., 982 F.2d 1400, 1409 (9th Cir. 1993),

superseded by statute on other grounds, Trademark

Amendments Act of 1999, Pub. L. No. 106-43, 113 Stat. 218.

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4 SUNEARTH V. SUN EARTH SOLAR POWER

We interpret the fee-shifting provisions in the Patent Act,

35 U.S.C. § 285, and the Lanham Act in tandem. See Int’l

Olympic Comm. v. S.F. Arts & Athletics, 781 F.2d 733,

738–39 (9th Cir.), as amended, 789 F.2d 1319 (9th Cir.

1986), aff’d, 483 U.S. 522 (1987). The fee-shifting

provisions in both acts are “parallel and identical.” GeorgiaPacific Consumer Prods. LP v. von Drehle Corp., 781 F.3d

710, 720 (4th Cir. 2015), as amended (Apr. 15, 2015). Thus,

we rely on an interpretation of the fee-shifting provision in

one Act to guide our interpretation of the parallel provision in

the other. See Octane Fitness, LLC v. ICON Health &

Fitness, Inc., 134 S. Ct. 1749, 1756 (2014) (interpreting the

Patent Act by relying in part on “the Lanham Act’s identical

fee-shifting provision”).

The Supreme Court has recently clarified how courts

should analyze fee requests under the Patent Act. The

Supreme Court held that a district court analyzing a request

for fees under the Patent Act should look to the “totality of

the circumstances” to determine if the infringement was

exceptional. Octane Fitness, 134 S. Ct. at 1756. The

Supreme Court explained 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.” 

Id. The Court eschewed a “precise rule or formula for

making these determinations” and instructed that “equitable

discretion should be exercised ‘in light of the considerations

we have identified.’” Id. (quoting Fogerty v. Fantasy, Inc.,

510 U.S. 517, 534 (1994)). Specifically, the Court cited a

“‘nonexclusive’ list of ‘factors,’ including ‘frivolousness,

motivation, objective unreasonableness (both in the factual

and legal components of the case) and the need in particular

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SUNEARTH V. SUN EARTH SOLAR POWER 5

circumstances to advance considerations of compensation and

deterrence.’” Id. at 1756 n.6 (quoting Fogerty, 510 U.S. at

534 n.19). The Court further clarified that the applicable

burden of proof for fee entitlement was the preponderance of

the evidence standard and not proof by “clear and convincing

evidence.” Id. at 1758.

In a second decision issued the same day, the Supreme

Court held that Courts of Appeal should review a district

court’s award of fees under the Patent Act for abuse of

discretion. Highmark Inc. v. Allcare Health Mgmt. Sys., Inc.,

134 S. Ct. 1744, 1748–49 (2014).

Following these decisions, the Third, Fourth, Fifth, and

Sixth Circuits have recognized that Octane Fitness changed

the standard for fee-shifting under the Lanham Act. Baker v.

DeShong, 821 F.3d 620, 621–25 (5th Cir. 2016); GeorgiaPacific Consumer Prods., 781 F.3d at 720–21; Slep-Tone

Entm’t Corp. v. Karaoke Kandy Store, Inc., 782 F.3d 313,

317–18 (6th Cir. 2015); Fair Wind Sailing, Inc. v. Dempster,

764 F.3d 303, 313–15 (3d Cir. 2014). Only the Second and

Seventh Circuits have applied earlier case law to Lanham Act

fee disputes, and both did so without mentioning Octane

Fitness or Highmark. Merck Eprova AG v. Gnosis S.p.A.,

760 F.3d 247, 265–66 (2d Cir. 2014); Burford v. Accounting

Practice Sales, Inc., 786 F.3d 582, 588 (7th Cir. 2015).

We agree with the majority of our sister circuits and

conclude that Octane Fitness and Highmark have altered the

analysis of fee applications under the Lanham Act. 

Therefore, district courts analyzing a request for fees under

the Lanham Act should examine the “totality of the

circumstances” to determine if the case was exceptional,

Octane Fitness, 134 S. Ct. at 1756, exercising equitable

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6 SUNEARTH V. SUN EARTH SOLAR POWER

discretion in light of the nonexclusive factors identified in

Octane Fitness and Fogerty, and using a preponderance of the

evidence standard. Pursuant to Highmark, our review of the

district court’s decision on fees awarded under the Lanham

Act is for abuse of discretion. 134 S. Ct. at 1748–49. We

overrule our precedent to the contrary.

With this correction in the law, we return control of the

case to the three-judge panel for resolution of the remaining

issues presented by the case.

REMANDED.

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