United States District Court, S.D. California
ORDER DENYING DEFENDANTS' MOTION FOR ATTORNEY
FEES AND SANCTIONS [ECF NO. 132]
CYNTHIA BASHANT UNITED STATES DISTRICT JUDGE
Siemens Medical Solutions USA, Inc. and Siemens Healthcare
Diagnostics Inc. move for an award of attorneys' fees and
costs pursuant to 28 U.S.C. § 1117(a) and for sanctions
against Plaintiff Quidel Corporation and its counsel pursuant
to Federal Rule of Civil Procedure 11. (“Mot., ”
ECF No. 132.)
extensive background of this case can be found in the
Court's order on the parties' cross-motions for
summary judgment. (See ECF No. 254.)
15 U.S.C. § 1117(a)
Lanham Act permits an award of reasonable attorneys' fees
in “exceptional cases.” 15 U.S.C. § 1117(a).
Originally, “[w]hile the term ‘exceptional'
[was] not defined in the statute, generally a trademark case
[was] exceptional for purposes of an award of attorneys'
fees when the infringement [was] malicious, fraudulent,
deliberate or willful.” Lindy Pen Co., Inc. v. Bic
Pen Corp., 982 F.2d 1400, 1409 (9th Cir. 1993). In 2016,
the Ninth Circuit in SunEarth, Inc. v. Sun Earth Solar
Power Co., Ltd., 839 F.3d 1179 (9th Cir. 2016), relied
on the Supreme Court's decision in Octane Fitness,
LLC v. ICON Health & Fitness, Inc., 472 U.S. 545
(2014), to abrogate Lindy Pen Co. and modify the
standard definition of “exceptional” in attorney
fee recovery Lanham Act cases. SunEarth, Inc., 839
F.3d at 1180. Ultimately, the Ninth Circuit held that
“district courts analyzing a request for fees under the
Lanham Act should examine the ‘totality of the
circumstances' to determine if the case [is] exceptional,
exercising equitable discretion in light of the nonexclusive
factors identified in Octane Fitness and
Fogerty, and using a preponderance of the evidence
standard.” Id. at 1181 (internal citation
omitted). These nonexclusive factors include:
“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.”
Id. at 1181 (citation omitted).
exceptional case as one that simply “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.” Id.
at 1180 (citation omitted). The determination of
“exceptional” falls squarely within the
discretion of the trial court. Highmark Inc. v. Allcare
Health Mgmt. Sys., Inc., 572 U.S. 559, 563 (2014).
Rule 11, any “pleading, written motion, or other
paper” presented “to the court” must
contain “factual contentions” with
“evidentiary support” or must “likely have
evidentiary support after a reasonable opportunity for
further” discovery. Fed.R.Civ.P. 11(b). Rule 11
sanctions are “an extraordinary remedy” to be
“exercised with extreme caution.” Operating
Engineers Pension Trust v. A-C Co., 859 F.2d 1336, 1345
(9th Cir. 1988).
believe this case is exceptional because Plaintiff's
claims are frivolous and stem from a wrongful motivation.
Defendants argue this case epitomizes the “type of
baseless litigation that should be discouraged.” (Mot.
parties recently moved for summary judgment in their favor.
The Court granted Defendants' motion in part, finding no
evidence that any laboratories were deceived or likely to be
deceived by Defendants' allegedly false advertisements.
But the Court found a genuine question of material fact
existed as to whether the statements at issue are false, and
further issues as to whether physicians are a part of the
relevant market and whether they were deceived by the
allegedly false statements. Both parties have submitted
plausible evidence on these issues. See Sophia &
Chloe, Inc. v. Brighton Collectibles, Inc., No.
12-CV-2472-AJB-KSC, 2019 WL 1429588, at *10 (S.D. Cal. Mar.
29, 2019) (finding courts have denied attorney's fees
“when a plaintiff's ‘position . . . was not
unreasonably or exceptionally weak” and it
“submit[ted] evidence of some actual confusion from
customers” (citing cases)).
the Court declines to find that Plaintiff's case is
frivolous or objectively unreasonable. The Court exercises
its discretion in light of the totality of the circumstances
and finds that this case is not exceptional warranting
attorney's fees under the Lanham Act. For the same
reasons, the Court also declines to award fees under ...