United States District Court, E.D. Virginia, Alexandria Division
ELLIS, III UNITED STATES DISTRICT JUDGE
a Virginia company engaged in the homebuying business,
prevailed in the underlying trademark action, and has now
filed a motion seeking attorney's fees pursuant to 15
U.S.C. § 1117(a). At issue, post-summary judgment, is
whether, as plaintiff contends, this case is an
"exceptional case" and thus warrants the award of
fees under § 1117(a) of the Lanham Act. For the reasons
stated below, plaintiff has not shown that defendant's
positions in this litigation were objectively unreasonable,
nor that there is a need in this particular case to grant an
award of fees in order to advance considerations of
compensation and deterrence, nor that this case is otherwise
"exceptional." Accordingly, plaintiffs motion must
28, 2017, plaintiff filed a complaint pursuant to 15 U.S.C.
§ 1064 seeking cancellation of defendant's two
registered trademarks, "We Buy Houses" and
"webuyhouses.com." As is typical in trademark
cases, there was in this case a threshold motion to dismiss
that was briefed, argued and resolved, followed by the filing
of an answer that included, as is also not atypical in
trademark cases, various counterclaims. The parties then
engaged in discovery, in which various depositions were taken
but neither party sought leave to take additional depositions
beyond the number permitted by Rule 30, Fed. R. Civ. P., and
Local Rule 30, Local Civ. R. Plaintiff also filed a
Daubert motion raising issues concerning proposed
expert testimony. In the end, it was not necessary to reach
or decide these issues. After the close of discovery, the
parties filed cross-motions for summary judgment with respect
to plaintiffs § 1064 claims and with respect to
defendant's nine counterclaims.
oral argument, a Memorandum Opinion and Order dated August
14, 2018 issued, granting summary judgment in favor of
plaintiff with respect to plaintiffs § 1064 claims on
the ground that defendant's marks were generic phrases;
the undisputed record evidence demonstrated the relevant
consuming public, competitors, and the prior owners of the
marks used and understood the phrase "we buy
houses" to signify generically house-buying services and
not the source of those services. Express Homebuyers USA,
LLC v. WBH Mktg. Inc., ___ F.Supp.3d ___ (E.D. Va.
2018). Summary judgment was also granted in favor of
plaintiff as to defendant's trademark infringement and
false designation of origin counterclaims because those
counterclaims were dependent on the validity of the marks.
Id. And by Order dated August 29, 2018, summary
judgment was granted in favor of plaintiff with respect to
defendant's false advertising, defamation, and conspiracy
counterclaims. Express Homebuyers USA, LLC v. WBH Mktg.
Inc, No. 1:17-cv-00736-TSE-IDD, Order, ECF No. 128 (Aug.
29, 2018). Plaintiff has now filed a motion seeking
attorney's fees under § 1117(a) of the Lanham Act.
1117(a) of the Lanham Act provides, in pertinent part, as
follows: "[t]he court in exceptional cases
may award reasonable attorney fees to the prevailing
party." 15 U.S.C. § 1117(a) (emphasis added). Two
important aspects of this congressional directive are
pertinent here. First, § 1117(a) makes clear that fees
are to be awarded only in "exceptional" cases.
Second, the statute also clearly provides that the decision
whether to award fees in an "exceptional" case is
discretionary, not mandatory.
properly begins with the meaning of the statutory phrase
"exceptional cases." This phrase has a well
understood meaning in common parlance; exceptional means
rare, extraordinary, atypical or aberrant. Indeed, the
Supreme Court in Octane Fitness, LLC v. ICON Health &
Fitness, Inc. had occasion to construe the phrase
"exceptional case" and referred to three
dictionaries in defining the word "exceptional" as
rare or extraordinary. 134 S.Ct. 1749, 1756 (2014) (citing
Merriam-Webster's Collegiate Dictionary 435 (11th ed.
2008); Webster's New International Dictionary 889 (2d ed.
1934); 3 Oxford English Dictionary 374 (1933)). Thus, in
drafting § 1117(a), Congress clearly intended to
abrogate the American Rule in a narrow range of cases and to grant
district courts the discretion to award fees in rare,
extraordinary cases when warranted. Otherwise, the American
review of the record as a whole in this case makes clear that
by no stretch of the imagination is this case
"exceptional"; it is not a rare, extraordinary or
otherwise unique trademark case. To the contrary, this case
is a garden variety trademark case challenging two registered
trademarks that use a phrase that is used in common parlance
to signify a service.
Supreme Court's decision in Octane Fitness,
construing the Patent Act's fee-shifting provision, which
is identical to § 1117(a), is particularly instructive
here. In Octane Fitness, the Supreme Court held that
an exceptional case in the Patent Act context is one that
"stands out from others with respect to the substantive
strength of a party's litigating position... or the
unreasonable manner in which the case was litigated."
Octane Fitness, 134 S.Ct. at 1756. Under this
standard, the instant case is not exceptional because
although plaintiff prevailed and defendant lost, neither the
substantive weakness of defendant's litigation position
nor the manner in which defendant litigated this case
"stands out" from the run-of-the-mill trademark
there any reason to conclude that Octane Fitness has
no application here because it occurred in the Patent Act
context. Many circuits, including the Fourth Circuit, have
applied the Octane Fitness standard in §
1117(a) cases, on the ground that § 1117(a) and its
Patent Act analog are identical. See, e.g., Georgia-Pac.
Consumer Prod. LP v. von Drehle Corp., 781 F.3d 710, 721
(4th Cir. 2015); SunEarth, Inc. v. Sun Earth Solar Power
Co., 839 F.3d 1179, 1181 (9th Cir. 2016); Baker v.
DeShong, 821 F.3d 620, 625 (5th Cir. 2016); Fair
Wind Sailing, Inc. v. Dempster, 764 F.3d 303, 315 (3d
Cir. 2014). In Georgia-Pacific, the Fourth Circuit
vacated the district court's award of attorney's fees
pursuant to § 1117(a) and remanded with the instruction
to consider whether the case was "exceptional" in
light of the Octane Fitness standard.
Georgia-Pacific, 781 F.3d at 719-21. Specifically,
the Fourth Circuit in Georgia-Pacific explained that
a district court may find a case "exceptional"
under § 1117(a) if, in light of the totality of the
circumstances, the court finds one of the following
(1) there is an unusual discrepancy in the merits of the
positions taken by the parties, based on the non-prevailing
party's position as either frivolous or objectively
unreasonable; (2) the non-prevailing party has litigated the
case in an unreasonable manner; or (3) there is otherwise the
need in particular circumstances to advance considerations of
compensation and deterrence.
Id. at 721. Further, and importantly, the prevailing
party must prove that a case is "exceptional" under
one of the above categories by a preponderance of the
evidence. Verisign, Inc. v. XYZ.COM LLC,
891 F.3d 481, 484 (4th Cir. 2018) ("Verisign
II"). Ultimately, the decision whether or not to
find a case "exceptional" on the basis of any of
the above grounds is within the discretion of the district
court. Id. at 484-85; see also Octane
Fitness, 134 S.Ct. at 756 (holding in the context of the
Patent Act's identical fee-shifting provision that
"[t]here is no precise rule or formula for making these
determinations, but instead equitable discretion should be
exercised in light of the considerations we have
identified.") (internal quotes omitted). The three
Georgia-Pacific factors, applied here, make clear
that this is not an exceptional case.
avoid this conclusion, plaintiff chiefly argues that this
case is exceptional because defendant's position on
summary judgment-that the Marks were not generic-was
objectively unreasonable, thus satisfying the first
Georgia-Pacific category. This argument fails
because the fact that the PTO had registered the Marks gave
defendant an objectively reasonable legal and ...