A trademark plaintiff once told its lawyers, with some confidence, that even if it lost the case it would "only" be out its own legal bills. That is the instinct the American Rule trains into all of us: win or lose, you pay your own lawyers, and the worst-case number is knowable in advance. Then the defendant filed a motion under one short, deceptively mild clause of the Lanham Act—"in exceptional cases"—and the worst-case number roughly doubled. The plaintiff was now staring at a bill not only for its own counsel but for the lawyers it had spent two years fighting.

That clause is the subject of this guide. It is eleven words long. It has been the difference, in real cases, between a manageable defeat and a catastrophic one, and between a hollow victory and a genuinely compensated one. And since 2014, when the Supreme Court rewrote how courts read identical language in the patent statute, the clause has become dramatically easier to invoke. If you litigate trademarks—or own a brand that someone might one day accuse, or that someone might one day infringe—you need to understand how it works.

The Exception to the American Rule

Start with the baseline, because the exception only makes sense against it. In the United States, the default rule is that each side bears its own attorney's fees regardless of who wins. This is the "American Rule," and it is old, entrenched, and consequential. It is the reason a defendant can be dragged through a meritless lawsuit, win completely, and still walk away hundreds of thousands of dollars poorer. It is also the reason a plaintiff with a real grievance but a small claim may never sue at all: the cost of vindication can exceed the value of vindication. The American Rule has its defenders—it keeps the courthouse doors open to people who would be terrified to sue if losing meant paying the other side—but it cuts hard against parties who are clearly in the right.

A statute or a contract can displace the American Rule. The Lanham Act is one of the statutes that does, and it does so with deliberate stinginess. Section 35(a), codified at 15 U.S.C. § 1117(a), provides that "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." Note what Congress did not write. It did not write a loser-pays rule. It did not say fees "shall" be awarded to whoever wins. It carved out a narrow exception—fees in exceptional cases—and left the courts to police the boundary.

Why does this matter so much in trademark practice specifically? Because trademark litigation is expensive in ways that surprise newcomers. The merits often turn on a likelihood-of-confusion analysis that invites consumer surveys, survey experts and their methodologies, and the Daubert fights those experts attract. Discovery sprawls across sales records, marketing files, and customer communications. Validity may be contested, dragging in cancellation theories. A contested trademark case that goes the distance can cost each side anywhere from the low six figures to several million dollars. When fee-shifting is on the table, the loser may have to pay all of that twice. That is why the fee question is frequently litigated as fiercely as the underlying claim, and why a credible threat of fee-shifting reshapes settlement negotiations long before anyone files a fee motion.

This guide takes a deliberately neutral stance. It is as useful to the party hoping to recover fees as to the party terrified of paying them, because the analysis is the same from both chairs—you are just standing on opposite sides of it. The fee question also threads through several adjacent topics we treat in depth: the apportionment of monetary recovery, the preclusion of undisclosed evidence and discovery sanctions under Rule 37(c)(1), the fact that fee awards—like other equitable questions—are decided by the judge rather than the jury, and the appellate standards that govern whether a fee ruling survives review. The leading treatment in the secondary literature is McCarthy on Trademarks and Unfair Competition §§ 30:99 et seq., which any practitioner briefing a fee motion should consult.

The Statute and Its Three Elements

The fee provision is short enough to quote in full and worth reading slowly, because nearly every contested fee motion is a fight over one of its words: "The court in exceptional cases may award reasonable attorney fees to the prevailing party." 15 U.S.C. § 1117(a). Compressed into that sentence are three requirements and one grant of discretion, and a fee claim has to clear all of them.

First, the case must be exceptional. This is the marquee inquiry and the subject of most of this guide. It is also the requirement that has changed the most over the last decade.

Second, the movant must be a prevailing party. That is a defined legal status, not a vibe. A party that "did pretty well" is not necessarily a prevailing party; a party that obtained a judgment, an injunction, or a court-ordered alteration of the parties' relationship usually is. We treat the doctrine below.

Third, the fees must be reasonable. Even when a court decides to shift fees, it does not write a blank check. It calculates a reasonable amount using the lodestar method—reasonable hours times a reasonable rate—and adjusts for the degree of the movant's success.

And then the verb: the court "may" award fees. That single word makes the award discretionary. A court that finds a case exceptional is permitted to shift fees but is not required to. In practice, an exceptionality finding usually produces an award—courts rarely go to the trouble of declaring a case exceptional and then decline to do anything about it—but the discretion is real, and it is what makes these rulings so hard to overturn on appeal.

A bit of history explains why the clause exists at all, and why it was drafted so narrowly. Before 1975, the Supreme Court had held that the Lanham Act contained no authorization for fee awards, so the American Rule applied with full force to trademark cases. See Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714 (1967). Congress disagreed with the policy result and amended the Act to add the "exceptional cases" language. But it chose its words carefully. Congress did not create a loser-pays regime; it created a limited safety valve for cases that genuinely stand apart. The narrowness was the point. Keep that legislative posture in mind, because it survives even the modern, more permissive standard: fees remain the exception, not the rule, and a court that loses sight of the word "exceptional" is committing reversible error.

The Octane Fitness Revolution

For decades, the "exceptional case" standard was a fortress that prevailing parties rarely stormed. Most circuits required a showing of bad faith, fraud, or independently sanctionable misconduct, often proven by clear and convincing evidence. The practical result was that the fee provision did very little work. A defendant who beat a weak-but-not-frivolous claim almost never recovered, because "weak" was not "bad faith," and proving a culpable mental state to a clear-and-convincing certainty is a tall order.

Then came Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014). Here is the wrinkle that confuses people, and that is worth stating plainly: Octane Fitness was a patent case. It interpreted 35 U.S.C. § 285, the fee provision of the Patent Act, not § 1117(a) of the Lanham Act. So why does a patent decision govern trademark fee motions? Because Congress used the identical operative language in both statutes—"[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party"—and courts presume that identical words in related statutes carry the same meaning. When the Supreme Court told us what "exceptional cases" means in the patent context, it effectively told us what the same two words mean in the trademark context. The circuits have, without meaningful dissent, agreed.

Octane swept away the old framework. The Court held that the prior test—demanding bad faith plus litigation-related misconduct, proven by clear and convincing evidence—was "unduly rigid" and untethered from the statutory text. The word "exceptional," the Court reasoned, simply means "uncommon," "rare," or "not ordinary," and a court does not need a culpable mental state to recognize that a case is out of the ordinary. In its place, the Court announced a flexible, common-sense definition that every trademark litigator should be able to recite:

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."

District courts are to make this determination case-by-case, weighing the totality of the circumstances, with no rigid formula and broad equitable discretion. Three features of the new standard do enormous work in practice.

Two independent routes. The definition uses the word "or." A case can stand out because of the substantive weakness of a party's position, or because of the unreasonable manner in which it was litigated, or both. These are alternative paths to the same destination. A party can win the fee fight on either ground standing alone—a meritorious claim can still be litigated so abusively that the case becomes exceptional, and a clean, professional litigant can still have advanced a position so hopeless that the case becomes exceptional. We devote a section to each route below.

A lower burden of proof. Octane expressly held that the movant need only show entitlement to fees by a preponderance of the evidence, not the old clear-and-convincing standard. That sounds technical; it is actually one of the most consequential lines in the opinion. Moving from "highly probable" to "more likely than not" dramatically widens the set of cases in which fees are recoverable.

No requirement of sanctionable conduct. Under Octane, the conduct that renders a case exceptional need not be independently sanctionable. A position can be objectively unreasonable, or a litigant's manner can be unreasonable, without crossing the line that would justify Rule 11 sanctions or a contempt finding. The standards are related but not coextensive; exceptionality is the broader, more forgiving net.

A companion decision handed down the same day, Highmark Inc. v. Allcare Health Management System, Inc., 572 U.S. 559 (2014), supplied the other half of the modern framework. Highmark held that a district court's exceptionality determination is reviewed only for abuse of discretion. Because the exceptionality inquiry is a fact-intensive, holistic judgment "best suited to the district court," the appellate court owes it substantial deference. The practical upshot is enormous: the fee fight is won or lost in the trial court, on the record the parties built there, and a losing party who hoped to find relief on appeal will usually be disappointed. This is the same deferential posture explored in our discussion of Second Circuit appellate standards in trademark cases—the legal questions embedded in the analysis are reviewed de novo, but the ultimate exceptionality call gets abuse-of-discretion review, and that distinction often decides appeals.

Put Octane and Highmark together and you get the modern fee landscape: fee awards are easier to obtain (lower burden, two routes, no need to prove sanctionable conduct) and harder to disturb once granted (deferential review). For prevailing parties, that is a double tailwind. For losing parties, a double headwind.

One more piece of Octane deserves attention because lawyers cite it constantly. The Court borrowed an illustrative, non-exclusive list of considerations from its copyright fee jurisprudence in Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994): "frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence." These are guideposts, not elements. A movant does not have to check every box. They are simply the kinds of things a court may weigh in deciding whether the case "stands out." Compensation and deterrence are the policy ends the statute serves; frivolousness, motivation, and objective unreasonableness are the case-specific clues that those ends are in play.

Octane Applied to the Lanham Act: The Circuits Fall in Line

Within a few years of Octane, essentially every circuit to consider the question had imported its standard into Lanham Act fee practice. The Third Circuit got there early in Fair Wind Sailing, Inc. v. Dempster, 764 F.3d 303 (3d Cir. 2014), reasoning that the identical statutory language compelled the same construction. The Fourth, Fifth, Sixth, Ninth, Eleventh, and Federal Circuits, among others, followed. There is no live circuit split on the threshold question of whether Octane governs; the only meaningful variation lies in how individual courts apply the totality-of-the-circumstances test to particular records.

The Second Circuit adopted the Octane standard for trademark cases in Sleepy's LLC v. Select Comfort Wholesale Corp., 909 F.3d 519 (2d Cir. 2018). Sleepy's abandoned the Circuit's older, more demanding approach—which had effectively required a showing of bad faith—and aligned New York with the national consensus. The case is worth knowing for a second reason beyond the threshold holding: it addressed apportionment, an issue that surfaces whenever a complaint mixes Lanham Act claims with non-Lanham Act claims. Sleepy's held that because § 1117(a) authorizes fees only for the Lanham Act claims, a fee award must be apportioned to the fees attributable to those claims, and fees tied solely to non-Lanham claims must be excluded unless the claims are so intertwined that the work cannot reasonably be separated. We return to apportionment when we discuss calculating the award; it is also a cousin of the recovery-allocation problems we cover in damages apportionment in trademark cases.

The Circuit applied the framework in 4 Pillar Dynasty LLC v. New York & Co., Inc., 933 F.3d 202 (2d Cir. 2019)—the same decision that anchors our damages apportionment discussion—confirming both the totality-of-the-circumstances analysis and the deferential review of fee determinations. And the court has continued to work through the standard in more recent cases, including Stevens v. McGimsey, 99 F.4th 87 (2d Cir. 2024), a recent example of the Second Circuit applying the Octane exceptional-case analysis and a useful illustration of how the framework operates years after it was adopted. District courts throughout the Circuit—including the busy trademark dockets of the Southern and Eastern Districts of New York—now route every § 1117(a) fee motion through Octane, Sleepy's, and 4 Pillar Dynasty.

The bottom line for litigants anywhere in the country, and emphatically in New York, is that the modern, flexible standard governs: two routes to exceptionality, a preponderance burden, no requirement of sanctionable conduct, and deferential appellate review.

Path One: The Substantive Strength of the Position

The first route to an exceptional-case finding looks at the merits—at whether a party's litigating position was so weak that the case stands out from the ordinary run of disputes. This is the route a prevailing defendant most often travels, arguing that the plaintiff never should have sued. But it is symmetric: a prevailing plaintiff can walk the same path by showing that the defendant's defenses were baseless.

What makes a position exceptionally weak? It is not enough to lose. Most losing positions are perfectly ordinary; reasonable parties disagree, juries go one way or another, and close cases produce losers who were never close to frivolous. The standard targets positions that fall outside the band of reasonable disagreement. A position can be legally unreasonable—flatly contrary to settled law, the kind of argument no competent lawyer could believe would succeed. Or it can be factually unreasonable—unsupported by any evidence, the kind of theory that crumbles the moment discovery closes. Either species can make a case exceptional, and Octane told courts to consider both "the governing law and the facts of the case."

Translated into trademark terms, the substantive-weakness route catches things like these. A plaintiff sues to enforce a mark that is generic or descriptive without secondary meaning—an asserted right it plainly does not have. A plaintiff presses an infringement theory with no plausible likelihood of confusion, ignoring the Polaroid factors that any competent analysis would flag as fatal. A plaintiff asserts a registration that is obviously vulnerable to cancellation—for fraud on the USPTO, abandonment, or descriptiveness—on grounds it should have recognized before filing. Or a plaintiff continues to litigate a claim long after discovery has demonstrated that the claim is hopeless, which is a recurring and underappreciated source of exceptionality: a claim that was reasonable when filed can become unreasonable when maintained once the evidence comes in. Courts sometimes describe this as a position that became objectively baseless, and continuing to push it can tip a case into the exceptional column even if filing it did not.

A defendant can be on the receiving end too. A defendant who concedes copying, has no colorable defense, and litigates anyway—forcing the plaintiff to prove the obvious—may find that its position was the objectively unreasonable one. The good-faith protections that a careful adopter builds through clearance searches and counsel opinions cut the other way here: a defendant who cannot point to any reasonable basis for its conduct or its defense is exposed.

One historically important point bears emphasis. Octane made the exceptionality standard symmetric as between plaintiffs and defendants. Some courts had previously applied a tougher test to prevailing defendants, on the theory that fee awards against plaintiffs might chill legitimate enforcement. Octane rejected that asymmetry. A weak position is a weak position regardless of who advanced it, and a prevailing defendant who beats a meritless claim stands on the same footing as a prevailing plaintiff who wins a meritorious one. For accused infringers, that symmetry is the doctrine's quiet gift: the fee provision is now a genuine deterrent against being targeted by a baseless suit.

Path Two: The Unreasonable Manner of Litigation

The second route ignores the merits and asks a different question: how did the party behave? A case can become exceptional because of the unreasonable manner in which it was litigated—and this is the route's defining feature—even if the underlying claim or defense had genuine merit. You can be right on the law and the facts and still hand your opponent a fee award, if you litigate badly enough. The manner-of-litigation prong is not about who deserved to win; it is about who imposed needless cost and friction on the other side and on the court.

Litigation misconduct comes in many flavors. Pursuing claims or defenses in bad faith. Asserting positions for an improper purpose—to harass a competitor, to extract a settlement unrelated to the merits, to bleed a smaller adversary dry. Making misrepresentations to the court. Filing vexatious or dilatory motions. Disobeying court orders. Shifting theories from one filing to the next to avoid pinning anything down. And, most prominently and most commonly, abusing the discovery process.

Discovery misconduct deserves its own paragraph because it is the workhorse of the manner-of-litigation route. A party that withholds responsive documents, gives evasive or incomplete interrogatory answers, refuses to disclose information it is plainly obligated to produce, stonewalls depositions with baseless instructions not to answer, serially blows deadlines, or buries the other side in objections it cannot defend imposes enormous and unnecessary cost—on the opponent, who must file motions to compel and chase what should have been produced, and on the court, which must referee the mess. That is precisely the kind of conduct that makes a case "stand out." Where a party's discovery behavior is unreasonable, it can support a fee award against that party regardless of how the merits came out, and that is why discovery conduct is so often the hinge of a fee motion.

This route dovetails tightly with the discovery-sanctions machinery covered in our article on Rule 37(c)(1) preclusion of undisclosed evidence. Conduct that draws a Rule 37 sanction—or that plainly would, even if no formal motion was made—strongly supports an exceptional-case finding. The connection runs both ways: a party that has been sanctioned, ordered to compel discovery, or caught flat-footed in a discovery dispute has handed its opponent a tidy record for the eventual fee motion. But here is the crucial point that lawyers sometimes miss: because Octane does not require the conduct to be independently sanctionable, a pattern of unreasonable discovery behavior can render a case exceptional even where no sanction was ever imposed. The absence of a formal Rule 37 order is not a safe harbor.

The strategic lesson is that fee positions are built throughout the case, not assembled after judgment. The more egregious, repeated, and—above all—well-documented the misconduct, the stronger the case for exceptionality. A party that wants to recover under this prong should create a contemporaneous paper trail: meet-and-confer letters that lay out the deficiency in detail, motions to compel that put the obstruction in front of the court, orders that memorialize it, and deposition transcripts that capture the stonewalling in real time. A fee motion that can attach that record is far more persuasive than one that asks the court to take the movant's word for it after the fact. And the converse is the warning: a party that litigates obstructively is manufacturing the very evidence that will be used against it, even if its claims are sound. The cleanest path to avoiding a fee award is not to win on the merits—it is to litigate so cleanly that the manner-of-litigation route is simply unavailable.

Who Is a "Prevailing Party"?

Before any court reaches exceptionality, the movant must clear a threshold: it must be a prevailing party. This is not a casual label. It is a defined legal status governed by a line of Supreme Court fee-statute cases, and a party that misjudges it can lose the fee motion before the exceptionality argument is ever heard.

The touchstone is Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, 532 U.S. 598 (2001). A party prevails when it obtains a material alteration of the legal relationship between the parties that carries the judicial imprimatur. The clearest example is a judgment on the merits. A court-ordered consent decree counts too, because the court's involvement supplies the imprimatur. What does not count, under Buckhannon, is a purely voluntary change in the opponent's behavior—the so-called "catalyst theory," under which a plaintiff claimed to prevail because its lawsuit prompted the defendant to change course without any court order. Buckhannon rejected that theory. If your opponent capitulates voluntarily and the case is dismissed without any judicial relief, you may have won in a practical sense, but you may not be a "prevailing party" in the technical sense the statute requires. (A negotiated settlement that the court does not adopt or oversee can present the same problem—which is one reason a savvy prevailing party tries to have its victory embodied in something the court signs.)

Critically, both sides can prevail. The statute speaks of "the prevailing party," not "the prevailing plaintiff." A defendant who defeats the claim is just as eligible to seek fees as a plaintiff who wins a judgment. The Supreme Court confirmed and extended this in CRST Van Expedited, Inc. v. EEOC, 578 U.S. 419 (2016), holding that a defendant can be a prevailing party even without a merits ruling. When a plaintiff's claim is dismissed—even on a non-merits ground—the defendant has achieved exactly what it came for: the rebuff of the plaintiff's attempt to alter the legal relationship. CRST arose under Title VII, but its reasoning about prevailing-party status applies across federal fee-shifting statutes, including § 1117(a). The practical significance in trademark practice is large: an accused infringer who beats back a baseless suit—on summary judgment, on a Rule 12 motion, or by securing a dismissal—is a prevailing party and may pursue fees, and the same Octane exceptionality test applies to its motion as to a trademark owner's.

Finally, prevailing-party status interacts with partial outcomes, which sets up the next question. A party that wins some claims and loses others can still be a prevailing party if it achieved a material, court-sanctioned victory on a significant issue. The fact that it did not run the table does not, by itself, knock it out of prevailing-party status—though, as we will see, it may shape the amount of any award.

Can Fees Be Awarded for Partial Victories?

Yes—but proportionally. Partial success does not bar a fee award, yet it shapes both the threshold eligibility and, more importantly, the amount. Two principles do the work.

On eligibility, you do not have to win everything to prevail. A party that achieves a material, judicially sanctioned victory on a significant claim is a prevailing party even though other claims failed. A plaintiff who wins a permanent injunction on its core infringement claim but loses a secondary dilution or state-law claim is still a prevailing party. A defendant who defeats the principal infringement claim while conceding a minor, peripheral point is still a prevailing party. The mixed result does not erase the win.

On amount, the governing decision is Hensley v. Eckerhart, 461 U.S. 424 (1983), the foundational fee-award case that all federal fee-shifting analysis orbits. Hensley ties the reasonable fee to the results obtained. When a party prevailed on some claims but not others, the court runs a two-step analysis. First, it asks whether the unsuccessful claims were related to the successful ones—did they arise from a common core of facts or rest on related legal theories? If a claim is genuinely unrelated to the claims on which the party prevailed, the time spent on it is generally excluded; you do not get paid for the distinct, losing detour. But if the claims are related—intertwined facts, overlapping theories—the court does not mechanically parse hours claim-by-claim. Instead, it focuses on the overall degree of success and asks whether a fully compensatory fee is warranted or whether the result, viewed as a whole, justifies a reduction. A party that achieved excellent results may recover a full fee even for some hours spent on related claims that did not individually succeed; a party that won only limited relief may receive a correspondingly limited fee even though it technically prevailed.

Layered on top of Hensley in trademark cases is the apportionment requirement from Sleepy's. Because § 1117(a) authorizes fees only for the Lanham Act claims, the court must apportion the award to the work attributable to those claims and exclude fees for non-Lanham claims—pendent state-law unfair-competition claims, breach-of-contract claims, and the like—unless the claims are so factually intertwined that the work cannot reasonably be separated. Note that Hensley relatedness and Sleepy's apportionment are cousins but not identical twins: Hensley asks about success across related claims; Sleepy's asks about the statutory basis for the fee. A claim can be factually related to the Lanham Act claim (so it survives Hensley) yet fall outside § 1117(a) (so it must be apportioned out under Sleepy's)—unless it is so intertwined that separation is impossible.

The combined effect is that a partial victory yields a fee calibrated to what the party actually won and to the fee-eligible claims. A sweeping success on the Lanham Act claims yields a robust, fully compensatory fee. A narrow or mixed result yields a reduced one. The partial-victory question is answered "yes—but proportionally," and the proportionality is worked out through Hensley's degree-of-success lens and Sleepy's apportionment screen.

Calculating a Reasonable Fee: The Lodestar

Once the court decides the case is exceptional and the movant is a prevailing party, it must fix the amount, and federal courts do this through the lodestar method. The lodestar is disarmingly simple as an equation and surprisingly contentious as an exercise. It is the product of two numbers: the hours reasonably expended on the litigation, multiplied by a reasonable hourly rate.

The reasonable rate is generally the prevailing market rate for comparable legal services in the relevant community—usually the forum district—for lawyers of similar experience, skill, and reputation. A Manhattan rate is not automatically reasonable in a rural district, and a junior associate's rate is not the same as a senior partner's. Courts test the claimed rates against fee surveys, awards in comparable cases, and the rates actually charged by lawyers of like standing in the forum. The reasonable rate is, in short, a market question, and the fee applicant bears the burden of showing that its requested rates track the market rather than its aspirations.

The hours must likewise be reasonable, which means the court strips out time that is excessive, redundant, duplicative, vague, or inadequately documented. "Block billing"—lumping multiple tasks into a single time entry so the reviewer cannot tell how long any one task took—invites across-the-board percentage cuts. Overstaffing a routine deposition, having three partners attend a single argument, or billing extravagant hours for a simple motion all draw scrutiny. The burden sits with the fee applicant to justify the hours claimed, and courts wield broad discretion to trim.

In the Second Circuit, there is a documentation rule that fee applicants ignore at their peril: fee requests must be supported by contemporaneous time records specifying, for each entry, the date, the hours expended, and the nature of the work. This requirement traces to New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136 (2d Cir. 1983), and it is enforced strictly. Records reconstructed after the fact from memory, or vague summaries that do not tie hours to tasks, can be disallowed wholesale. The lesson is mundane but decisive: keep meticulous, contemporaneous time records from the first day of the engagement, or risk leaving real money on the table even after winning the right to recover.

Having computed the raw lodestar, the court then adjusts. It applies the Hensley degree-of-success analysis (reducing for limited success or unrelated unsuccessful claims) and the Sleepy's apportionment requirement (separating out non-Lanham work). In rare cases, courts have entertained enhancements or further reductions, but the lodestar is presumptively the reasonable fee, and adjustments operate at the margins. Costs—filing fees, transcript fees, certain litigation expenses—are addressed separately under the applicable rules and statutes and should not be conflated with the attorney's-fee award.

The practical takeaway here is that documentation often matters as much as entitlement. Two prevailing parties with identical legal positions can recover wildly different amounts depending on how clean their billing records are. The party that kept contemporaneous time entries, staffed the case efficiently, billed at defensible rates, and can map every hour to a fee-eligible Lanham Act claim will recover reliably and close to the full amount. The party with vague block-billed entries, redundant staffing, and a tangle of non-Lanham work will watch the court carve its request down. And the fee-defender knows all of this: it scours the time records for excessive hours, duplication, block billing, and non-eligible work, arguing for reductions even when it cannot defeat entitlement outright. The fee fight does not end at exceptionality; it often begins there.

Strategy and Timing

Fee practice rewards foresight more than almost any other phase of litigation, because the record that wins a fee motion is built over months and cannot be conjured at the end. A party hoping to recover should think about fees from the complaint forward.

Choose your route early. Is this a substantive-weakness case, a manner-of-litigation case, or both? The answer dictates what record you need to build. For the substantive-weakness route, you want a clear evidentiary and procedural record showing why the opponent's position was objectively unreasonable—and, often, when it crossed from arguable to hopeless. Summary-judgment briefing, requests for admission that pin the opponent down, and correspondence flagging the fatal defects all contribute. For the manner-of-litigation route, you want the contemporaneous misconduct trail described above: meet-and-confer letters, motions to compel, orders, and deposition excerpts. A fee motion supported by a developed, time-stamped record beats one resting on after-the-fact characterization every time.

Mind the deadline. A motion for attorney's fees must ordinarily be filed within 14 days after the entry of judgment under Federal Rule of Civil Procedure 54(d)(2)(B). The motion must specify the judgment and the statute, rule, or other ground entitling the movant to the award, and state the amount sought or provide a fair estimate. The fourteen-day clock is unforgiving; missing it can forfeit an otherwise meritorious claim. (Local rules and individual judges' practices sometimes adjust the briefing schedule or permit the amount to be quantified later, but the motion itself is governed by the rule's tight window.) Calendar it the moment judgment is entered.

Know who decides—and how it will be reviewed. The fee question is for the judge, not the jury, as an equitable matter—a point we develop in our article on bench versus jury trial issues in trademark litigation. And under Highmark, the court's exceptionality determination will be reviewed only for abuse of discretion, with the embedded legal questions reviewed de novo—the layered standard our Second Circuit appellate standards guide unpacks. Because of that deference, the contest is won or lost in the district court, on the record the parties built. An appeal is a long shot.

Use the leverage before the motion. The deterrent and settlement effects of all this are substantial and arrive early. A party confident of an exceptional-case argument carries real leverage into settlement talks, because its opponent must price in not only its own fees but potentially the movant's. Conversely, a party that knows its position is weak, or that its litigation conduct has been ugly, has to fold the fee exposure into its risk assessment from the start. Fee-shifting shapes behavior long before any motion is filed—often it shapes whether the case settles at all, and on what terms.

Fees and Willfulness: Related but Distinct

Here is a confusion that trips up lawyers and clients alike, and getting it straight sharpens both your fee motion and your damages case. The exceptional-case finding for fees and the willful infringement finding for monetary recovery are related but different, and treating them as interchangeable is an analytical error.

Willfulness is about the defendant's mental state in committing the infringement. Did the defendant act knowingly, in bad faith, or with reckless disregard for the plaintiff's rights? Willfulness bears on the equities of a disgorgement-of-profits award and can support enhanced recovery—the terrain covered in our damages apportionment guide, and shaped by the good-faith defenses a careful adopter can mount. Willfulness looks at conduct in the marketplace, before the lawsuit.

Exceptionality is about whether the case stands out—either because a party's litigating position was unreasonable or because the manner of litigation was unreasonable. Exceptionality looks at conduct in the courtroom (and at the strength of the positions taken there), during the lawsuit.

The two can diverge completely. A defendant can infringe willfully in the market yet litigate the resulting case reasonably and professionally—conceding what cannot be denied, contesting only what is genuinely contestable, and behaving impeccably in discovery. That defendant may face enhanced profits for its willful infringement but escape a fee award because the case did not "stand out" in its litigation. Conversely, a defendant can infringe innocently—a genuine, good-faith adoption that happened to cross a line—yet litigate so abusively that the case becomes exceptional and fees shift against it. Mental state at the time of infringement and reasonableness during litigation are simply different variables.

That said, they often travel together and reinforce one another. Egregious, willful infringement can help show that a defendant's defense of the indefensible was objectively unreasonable, feeding the substantive-strength route to exceptionality. And a finding that a party litigated in bad faith can color a court's view of its underlying conduct. But neither finding compels the other. A willfulness determination does not automatically make a case exceptional, and an exceptional-case finding does not establish willful infringement. A litigant must prove each on its own terms, with the evidence relevant to that distinct inquiry. Keep them analytically separate—it is the difference between a sloppy motion and a winning one.

Appellate Fees and Fees-on-Fees

Two further categories of fees surface once basic entitlement is established, and both expand the loser's exposure beyond what a quick look at the trial-court bill would suggest.

Appellate fees are the fees incurred in defending—or pursuing—the judgment on appeal. Where a case has been found exceptional and fees are authorized, a party that prevails on appeal may generally recover its reasonable appellate fees as well, because the statutory authorization reaches the reasonable fees of the litigation as a whole, not just the trial phase. The mechanics vary: appellate fees may be requested in the court of appeals or, more commonly, sought on remand once the appeal concludes. But the principle is that a prevailing party's recovery is not artificially capped at the trial-court door. A party considering an appeal in an exceptional case should reckon with the possibility that losing the appeal means paying for the privilege of having taken it.

Fees-on-fees are the fees incurred in litigating the fee motion itself. Preparing, briefing, and defending a fee application is not free—it can consume real attorney time, especially when the opponent contests entitlement and amount line by line. Courts in appropriate circumstances allow a prevailing party to recover reasonable fees for that work too, on the sensible rationale that forcing a party to absorb the entire cost of establishing its entitlement would erode the very compensation the statute was meant to provide. Fees-on-fees are themselves subject to a reasonableness check—courts trim time spent on excessive or unsuccessful fee litigation and watch for proportionality, declining to let the fee tail wag the merits dog—but their availability means that resisting a well-founded fee claim is not cost-free for the party doing the resisting.

Both categories underscore one practical reality: the exposure created by an exceptional-case finding can extend well beyond the trial-court merits fees, sweeping in the appeal and the fee litigation. A party weighing whether to fight a strong fee claim, or to appeal an adverse judgment in an exceptional case, should treat the trial-court fee award as a floor, not a ceiling.

Prevailing Plaintiff Versus Prevailing Defendant

The Octane standard is symmetric—the same test governs whichever side prevails—but the arguments each side tends to make differ, because plaintiffs and defendants occupy structurally different positions in the case.

A prevailing plaintiff usually anchors its fee request in the defendant's conduct. On the substantive route, it argues that the defendant's defenses were objectively unreasonable—the infringement was clear, the mark was strong and valid, and the defendant had no plausible basis to contest liability. On the manner route, it points to the defendant's litigation behavior: stonewalling discovery, asserting defenses in bad faith, multiplying motions, dragging out a hopeless case to grind the plaintiff down. A prevailing plaintiff frequently pairs the fee request with the willfulness-and-profits analysis, marshaling evidence of egregious infringement to support both—while, as we stressed, keeping the two inquiries analytically distinct.

A prevailing defendant typically anchors its request in the weakness of the plaintiff's case. On the substantive route, it argues the claim never should have been brought—the asserted mark was invalid or unprotectable, confusion was implausible, or the suit was a competitive weapon aimed at harassing a rival or suppressing legitimate competition. On the manner route, it points to the plaintiff's tactics: a baseless suit pressed for improper purposes, theories that shifted to dodge summary judgment, or discovery abuse of the plaintiff's own. The historical significance of Octane's symmetry is greatest right here, because some courts had previously made it harder for prevailing defendants to recover. Under the modern standard, the defendant who beats a meritless claim stands on equal footing with the plaintiff who wins a meritorious one—which is exactly why a fee threat is now a meaningful card in an accused infringer's hand.

For both sides, the discipline is the same: frame the request around the route that best fits your record—conduct, merits, or both—and remember that the standard plays no favorites. The identity of the prevailing party changes the rhetoric and the target of the argument, but not the governing test.

A Worked Example

Consider an invented dispute—hypothetical, to illustrate the mechanics. "Harborline," a maker of nautical apparel, sues "Harbour Line Co.," a competitor, for trademark infringement in the Eastern District of New York, tacking on a state-law unfair-competition claim for good measure. The case goes badly for Harborline. On summary judgment, the court finds HARBORLINE descriptive and lacking secondary meaning, deems the likelihood-of-confusion theory implausible under the Polaroid factors, and enters judgment for Harbour Line. Harbour Line—now the prevailing party—moves for fees under § 1117(a).

Run the analysis the way a court would.

Prevailing party? Yes. Harbour Line obtained a merits judgment materially altering the legal relationship, with the requisite judicial imprimatur under Buckhannon, and as the defendant it is squarely a prevailing party under CRST.

Exceptional? Harbour Line can travel both routes. On the substantive-strength route, it argues that Harborline's position was objectively unreasonable—no reasonable trademark owner could have believed that a descriptive mark with no secondary meaning supported an infringement claim, and the confusion theory was hopeless from the start. On the manner-of-litigation route, suppose Harborline also stonewalled discovery, refusing to produce its sales and marketing records and forcing Harbour Line to file two motions to compel before the documents trickled out. That conduct, documented in the meet-and-confer letters and the motions, can independently render the case exceptional regardless of the merits—and, critically, it need not have been formally sanctioned to count. Under the preponderance standard and the totality of the circumstances, Harbour Line has a credible exceptional-case argument on either ground, and a strong one on both together.

Amount? If the court finds the case exceptional, it turns to the lodestar. It multiplies Harbour Line's reasonably expended hours by reasonable Eastern District rates, insisting on the contemporaneous time records Carey demands. It then apportions under Sleepy's, awarding fees for the Lanham Act infringement defense but separating out (or excluding) fees attributable solely to defending the state-law unfair-competition claim—unless the two were so factually intertwined that the work cannot reasonably be split, in which case the apportionment collapses and Harbour Line recovers for the intertwined work. Finally, it adjusts for degree of success under Hensley: because Harbour Line prevailed completely on the core dispute, a fully compensatory fee for the related work is appropriate. The result is a substantial but carefully cabined award—exceptional-case entitlement, lodestar amount, apportioned to the Lanham Act claim, calibrated to a near-total success.

Now flip it. Suppose instead that Harborline had won an infringement judgment, proven that Harbour Line's copying was deliberate and egregious, and shown that Harbour Line defended in bad faith and abused discovery. Harborline could pursue fees on the mirror-image theory: defendant's defenses objectively unreasonable (substantive route), defendant's litigation conduct unreasonable (manner route), with the willful-infringement evidence supporting both the fee motion and, separately, the enhanced-profits analysis. The standard is symmetric; the analysis is the same; only the identity of the prevailing party—and the direction the check is written—changes.

Frequently Asked Questions

Does winning a trademark case automatically mean I can recover my attorney's fees? No. Winning makes you a candidate—a prevailing party—but recovery requires more. You must show that the case was "exceptional" under Octane Fitness, meaning it stands out either for the substantive weakness of your opponent's position or for the unreasonable manner in which your opponent litigated. Most ordinary, hard-fought trademark cases are not exceptional, even though one side loses. Fees remain the exception, not the rule.

Why does a patent case, Octane Fitness, control trademark fee awards? Because Congress used the identical phrase—"[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party"—in both the Patent Act (35 U.S.C. § 285) and the Lanham Act (15 U.S.C. § 1117(a)). When the Supreme Court construed that phrase for patents in Octane, courts applied the same construction to trademarks, and every circuit to consider the question has agreed. Same words, same meaning.

Can a defendant who beats a trademark claim recover fees, or is this only for plaintiffs? A defendant can absolutely recover. The statute refers to the "prevailing party," not the prevailing plaintiff, and Octane made the standard symmetric. CRST Van Expedited v. EEOC confirms that a defendant can be a prevailing party even without a merits ruling—for instance, when the claim is dismissed. An accused infringer who defeats a baseless suit is on equal footing with a trademark owner who wins a meritorious one.

What burden of proof applies? A preponderance of the evidence—"more likely than not." Octane expressly rejected the older clear-and-convincing standard. That lower burden is one of the main reasons fee awards became more attainable after 2014.

Does my opponent's conduct have to be sanctionable for the case to be exceptional? No. Octane held that the conduct need not be independently sanctionable. A pattern of unreasonable discovery behavior, for example, can make a case exceptional even if no Rule 37 sanction was ever imposed. Exceptionality is a broader net than sanctions.

If I win some claims but lose others, can I still get fees? Possibly, but proportionally. You can be a prevailing party based on a significant, court-sanctioned win even if other claims failed. The amount, though, is shaped by Hensley v. Eckerhart's degree-of-success analysis (excluding unrelated unsuccessful claims, focusing on overall success for related ones) and, in trademark cases, by Sleepy's apportionment to the Lanham Act claims. Sweeping wins yield robust fees; mixed results yield reduced ones.

How is the fee amount calculated? By the lodestar method: reasonable hours multiplied by a reasonable hourly rate (typically the forum's prevailing market rate). Courts exclude excessive, duplicative, vague, or poorly documented time. In the Second Circuit, you must support the request with contemporaneous time records under Carey. The lodestar is then adjusted for degree of success and apportioned to the Lanham Act claims.

When do I have to file the fee motion? Ordinarily within 14 days after entry of judgment, under Federal Rule of Civil Procedure 54(d)(2)(B). The motion must identify the judgment, the statutory basis, and the amount or a fair estimate. Missing the deadline can forfeit the claim, so calendar it immediately when judgment is entered, and check the local rules and the judge's individual practices.

Is an exceptional-case finding the same as a finding of willful infringement? No, though they overlap and often appear together. Willfulness concerns the defendant's mental state when it infringed (relevant to profits and enhanced recovery). Exceptionality concerns whether the case stands out—through an unreasonable position or unreasonable litigation. A defendant can infringe willfully yet litigate reasonably, or infringe innocently yet litigate abusively. Prove each on its own terms.

Who decides the fee question—the judge or the jury? The judge. Attorney's fees are an equitable matter committed to the court, not the jury, which is why fee practice connects to the broader bench-versus-jury allocation in trademark litigation. And the exceptionality determination is reviewed on appeal only for abuse of discretion under Highmark, so the district court's call is hard to disturb.

Can I recover fees for the appeal and for litigating the fee motion itself? Often, yes. A party that prevails on appeal in an exceptional case may generally recover reasonable appellate fees, and courts in appropriate circumstances award "fees-on-fees" for the time reasonably spent litigating the fee application—both subject to a reasonableness check. The exposure can extend well beyond the trial-court merits bill.

Practical Takeaways

For the party seeking fees, entitlement is built throughout the case and proven at its end. Decide early which route fits—substantive weakness, unreasonable litigation conduct, or both—and develop the record to match. Document, in real time and in writing, why your opponent's position was objectively unreasonable and when it became so. Build a contemporaneous trail of any discovery abuse or bad-faith tactics through meet-and-confer letters, motions to compel, and orders. Remember that the conduct need not be sanctionable and that your burden is only a preponderance. Establish prevailing-party status—ideally by having your victory embodied in something the court signs. Move within 14 days of judgment under Rule 54(d)(2). And support the lodestar with detailed, contemporaneous time records, billing efficiently and tying your work to the Lanham Act claims so it survives apportionment. Where your core victory was complete, frame the degree of success to justify a fully compensatory fee.

For the party resisting fees, contest each element in turn. Argue first that the case does not "stand out"—that your position, even if it lost, sat within the range of reasonable disagreement, and that your litigation conduct was ordinary rather than abusive. If exceptionality is found anyway, pivot to the amount: scrutinize the time records for excessive, duplicative, or block-billed hours; challenge the claimed rates against the true forum market; insist on apportionment to strip out non-Lanham work; and argue for a Hensley reduction reflecting any limits on the opponent's success. Above all, manage your own conduct in real time. Because the manner-of-litigation route can shift fees regardless of the merits, the surest protection is to litigate cleanly—comply with discovery, avoid obstruction, take only defensible positions, and deny your opponent the record of abuse that a fee motion needs.

For both sides, the unifying principle is that Octane Fitness made fee-shifting more attainable but kept it genuinely exceptional. A case must stand out—by the weakness of a position or the unreasonableness of the litigation—and the determination rests in the district court's broad, deferential discretion. The standard is symmetric between plaintiffs and defendants, the burden is a preponderance, the conduct need not be sanctionable, and the amount is a lodestar calibrated to success and apportioned to the Lanham Act claims. Understand the two routes, build—or scrupulously avoid creating—the record from day one, and the fee provision becomes a predictable instrument of compensation and deterrence rather than a nasty surprise at the end of the case. The plaintiff in our opening scene learned that lesson the hard way. The eleven words of § 1117(a) are easy to overlook and expensive to ignore.

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This article is provided for general informational purposes and does not constitute legal advice. Fee awards are discretionary and intensely fact-specific; consult qualified litigation counsel about any particular matter.