Opinion ID: 59474
Heading Depth: 2
Heading Rank: 3

Heading: Exceptional Case Warranting Attorney Fees

Text: The Lanham Act provides that a court in exceptional cases may award reasonable attorney fees to the prevailing party. 15 U.S.C. § 1117(a). The court ordered Sterling to pay $96,304.50 [2] in attorney fees, an award to which Sterling takes exception because it finds this case not to be exceptional. An award of attorney fees under the Lanham Act is reviewed for an abuse of discretion. Procter & Gamble Co. v. Amway Corp., 280 F.3d 519, 528 (5th Cir. 2002). The findings of the district court regarding the exceptional nature of a case are reviewed for clear error. Id. The prevailing party has the burden to demonstrate the exceptional nature of the case by clear and convincing evidence. Id. at 526. An exceptional case involves acts that can be called malicious, fraudulent, deliberate, or willful. Seven-Up, 86 F.3d at 1390. The district court awarded the fees to Schlotzsky's after it had conducted an independent examination of the testimony and other evidence presented at trial, including through observation of the witnesses' words, demeanor, and candor or lack thereof. The court was also mindful of the jury's finding that Sterling willfully violated the Lanham Act through false designation of affiliation, sponsorship, or approval with respect to Sterling's misrepresentation of its relationship and authority. The district court agreed that Sterling acted in bad faith and willfully violated the Lanham Act. There is evidence to support the district court's finding that Sterling acted in bad faith. Finding this to be an exceptional case was not clearly erroneous. The decision to award attorney fees was not an abuse of discretion.