Redefining Attorney-Fee Shifting Under the Lanham Act: Protecting Small Businesses and Deterring Trademark Infringement

AuthorSharad K. Bijanki
PositionJ.D. Candidate, The University of Iowa College of Law, 2013
Pages809-833
809
Redefining Attorney-Fee Shifting Under
the Lanham Act: Protecting Small
Businesses and Deterring Trademark
Infringement
Sharad K. Bijanki
ABSTRACT: Attorney-fee shifting under the Lanham Act is analyzed under
a variety of different standards; practically every circuit has its own method.
A major underlying difference between the circuits is whether bad faith is a
prerequisite to attorney-fee shifting. A bad-faith standard is problematic
because Congress intended for the courts to shift attorney fees in accordance
with equitable considerations. A court’s failure to consider equitable
elements can encourage oppressive litigation and turn a blind eye to reckless
infringement—which may not be covered by an attorney-fee shifting
standard that focuses on bad faith. Congress is legitimately concerned that
abusive trademark-litigation practices are often directed at small businesses,
which are vital for innovation and the growth of the economy. This Note
argues that courts should adopt a less-than-bad-faith standard coupled with
the Seventh Circuit’s objective “abuse of process” standard. The “abuse of
process” standard, which considers equitable elements, will expand the range
of circumstances in which courts may award attorney fees. In turn, courts
that adopt this standard will effectively deter infringement and bring the
Lanham Act’s attorney-fee shifting provision back in line with congressional
intent. A universal adoption of this objective standard will also diminish
existing forum-shopping incentives.
I. INTRODUCTION ...................................................................................... 811
II. BACKGROUND ON THE LANHAM ACT AND ATTORNEY-FEE SHIFTING ..... 812
A. A HISTORY OF ATTORNEY-FEE SHIFTING UNDER THE LANHAM ACT .... 812
B. THE HIGH COST OF TRADEMARK LITIGATION AND ITS EFFECT ON
SMALL BUSINESSES ........................................................................... 813
J.D. Candidate, The University of Iowa College of Law, 2013; B.S. University of Illinois
Urbana-Champaign, 2007. Thanks to KCRB.
810 IOWA LAW REVIEW [Vol. 98:809
C. CONGRESSIONAL INTENT IN PROVIDING FOR ATTORNEY-FEE
SHIFTING ......................................................................................... 814
D. HOW COURTS INTERPRET THE “EXCEPTIONAL CASE FOR
ATTORNEY-FEE SHIFTING .................................................................. 816
1. Circuits Requiring Bad Faith Before Shifting Attorney
Fees .......................................................................................... 817
2. Circuits Not Requiring Bad Faith Before Attorney Fees
Shift ......................................................................................... 820
III. THE PROBLEM WITH BAD-FAITH ATTORNEY-FEE SHIFTING
STANDARDS ............................................................................................ 822
A. A BAD-FAITH STANDARD IS NOT EQUITABLE ..................................... 822
B. A BAD-FAITH STANDARD DOES NOT ALIGN WITH SMALL
BUSINESSES TRADEMARK PROTECTION ............................................. 823
1. Background of Congressional Interest in Small
Businesses’ Trademark .......................................................... 823
2. A Bad-Faith Standard Is Not Adequate To Protect Small
Businesses’ Trademarks ......................................................... 825
IV. THE SOLUTION TO THE BAD-FAITH STANDARD ..................................... 826
A. ACCOUNTING FOR A BROADER RANGE OF CULPABLE BEHAVIOR........... 826
1. Attorney Fees Should Be Available from Reckless
Defendants .............................................................................. 827
2. Attorney Fees Would Be Available for Small Businesses
Subject to Onerous Litigation ............................................... 829
B. AN OBJECTIVE STANDARD WOULD ACCOUNT FOR CONGRESSIONAL
INTENT FOR EQUITABLE CONSIDERATIONS ......................................... 830
C. ADOPTION OF AN OBJECTIVE STANDARD BY ALL CIRCUITS WOULD
PREVENT FORUM SHOPPING .............................................................. 831
V. CONCLUSION ......................................................................................... 832

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