Court Reiterates That Standard for Recovering Attorney Fees Under Lanham Act Is High

On October 31, 2017, the Western District of Missouri denied a request for attorney fees that was based only on a successful defense against false advertising claims.

Plaintiff Healthmate International, LLC and Defendant Rampant Lion, Inc. sell Transcutaneous Electrical Nerve Stimulation (“TENS”) units, which use electrical currents to help relieve body pain. In the course of litigation, Rampant Lion asserted a false advertising counterclaim based on a statement on Healthmate’s website describing some of its products as “FDA approved,” rather than “FDA cleared.” Rampant Lion lost its false advertising claim, and Healthmate moved for attorney fees.

Healthmate argued the case was exceptional enough to warrant fee-shifting because Rampant Lion’s counterclaim was only a litigation tactic used to increase Healthmate’s cost of litigation. As evidence, Healthmate pointed to the fact that Rampant Lion presented no evidence of customer confusion and unreasonably rejected Healthmate’s settlement offers. The Court disagreed.

According to the Court, Rampant Lion had a non-frivolous basis for its counterclaim because Healthmate’s statement that its products were “FDA approved” was inaccurate. Further, Rampant Lion sought to overcome the lack of customer confusion evidence by contending Healthmate’s statement was literally false, which, under Eighth Circuit law, would have allowed the Court to grant relief without such evidence. On summary judgment, the Court held that Healthmate’s statement was not literally false, and therefore to prevail, Rampant Lion had to present evidence of customer confusion. The Court stated: “The fact that the Court disagreed with Rampant Lion’s analysis does not make the case exceptional; to hold otherwise would make every case in which a party loses ‘exceptional’ and destroy the distinction between the Lanham Act’s fee provision and other fee-shifting provisions that merely require that a party prevail to recover fees.”

The case is Healthmate International, LLC v. French, Case No. 15-0761-CV-W-BP (W.D. Mo. Oct. 31, 2017).