Prevailing Defendant Denied Award of Attorneys' Fees in Lanham Act Claim

In an August 7, 2013 ruling, Judge Jed S. Rakoff denied the motion of defendants House of Cheatham Inc. and Robert Bell for attorneys' fees under the Lanham Act after the defendants prevailed on the trademark infringement, false designation of origin, unfair competition and state dilution claims brought by the plaintiff, Akiro LLC.  The Court first noted that Second Circuit case law "'allows recovery of a reasonable attorney's fee only on evidence of fraud or bad faith,'"  although some cases have allowed fees where the suit was a "'competitive ploy'" or where the suit is initiated with "'ulterior business motives.'"  In support of their motion, "defendants largely focus[ed] on such matters of the timing of Akiro's decision to commence this action, particular tactical decisions, and the expense of defendants' defense."  The Court, however, ruled that "the proper inquiry centers on whether or not Akiro 'had a credible, good faith basis on which to rest its Lanham Act claims."  After considering the (albeit limited) evidence presented at trial, Judge Rakoff held that "the Court cannot conclude that Akiro lacked a good-faith basis for its claims," and denied an award of fees.