SunEarth, Inc., et al v. Sun Earth Solar Power Co., Ltd, et al

Filing

FILED PER CURIAM OPINION (SIDNEY R. THOMAS, M. MARGARET MCKEOWN, KIM MCLANE WARDLAW, WILLIAM A. FLETCHER, RONALD M. GOULD, RICHARD A. PAEZ, RICHARD R. CLIFTON, JACQUELINE H. NGUYEN, PAUL J. WATFORD, JOHN B. OWENS and MICHELLE T. FRIEDLAND) With this correction in the law, we return control of the case to the three-judge panel for resolution of the remaining issues presented by the case. REMANDED. FILED AND ENTERED JUDGMENT. [10170135] [13-17622, 15-16096]

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

SUNEARTH, INC., a California
corporation; THE SOLARAY
CORPORATION, a Hawaiian
corporation,
Plaintiffs-Appellants,

Nos. 13-17622
15-16096
D.C. No.
4:11-cv-04991-CW

v.
OPINION
SUN EARTH SOLAR POWER CO.,
LTD., FKA Ningbo Solar Electric
Power Co., Ltd., a Chinese
limited liability company;
NBSOLAR USA INC., a California
corporation,
Defendants-Appellees.

Appeal from the United States District Court
for the Northern District of California
Claudia Wilken, District Judge, Presiding
Submitted En Banc October 14, 2016*
San Francisco, California
Filed October 24, 2016

*

The en banc court unanimously concludes this case is suitable for
decision without oral argument. See Fed. R. App. P. 34(a)(2).

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SUNEARTH V. SUN EARTH SOLAR POWER

Before: Sidney R. Thomas, Chief Judge, and M. Margaret
McKeown, Kim McLane Wardlaw, William A. Fletcher,
Ronald M. Gould, Richard A. Paez, Richard R. Clifton,
Jacqueline H. Nguyen, Paul J. Watford, John B. Owens,
and Michelle T. Friedland, Circuit Judges.
Per Curiam Opinion

SUMMARY**

Lanham Act / Attorneys’ Fees
The en banc court held that following Octane Fitness,
LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014),
district courts analyzing a request for attorney fees under the
Lanham Act should examine the totality of the circumstances
to determine if the case was exceptional, exercising equitable
discretion in light of the nonexclusive factors identified in
Octane Fitness and Fogerty v. Fantasy, Inc., 510 U.S. 517
(1994), and using a preponderance of the evidence standard.
Pursuant to Highmark, Inc. v. Allcare Health Mgmt. Sys.,
Inc., 134 S. Ct. 1744 (2014), the court of appeals’ review of
the district court’s decision on fees awarded under the
Lanham Act is for abuse of discretion.
The en banc court overruled precedent to the contrary and
agreed with the majority of other circuits. The en banc court
remanded the case to the three-judge panel for the resolution
of remaining issues.
**

This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.

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COUNSEL
Clark E. Proffitt and Stephen B. Mosier, Hayes Soloway P.C.,
Tucson, Arizona, for Plaintiffs-Appellants.
James J. Foster, Hayes Messina Gilman & Hayes LLC,
Boston, Massachusetts; Michael A. Albert and Eric J. Rutt,
Wolf Greenfield & Sacks P.C., Boston, Massachusetts; for
Defendants-Appellees.

OPINION
PER CURIAM:
We voted to rehear this case en banc to reconsider our
jurisprudence concerning fee awards in cases filed pursuant
to the Lanham Act, 15 U.S.C. § 1051 et seq.
Section 35(a) of the Lanham Act provides that “[t]he
court in exceptional cases may award reasonable attorney fees
to the prevailing party.” 15 U.S.C. § 1117(a). Historically,
we have reviewed de novo a district court’s finding as to
whether a defendant’s infringement was “exceptional” within
the meaning of the Lanham Act’s fee-shifting provision. See,
e.g., Secalt S.A. v. Wuxi Shenxi Constr. Mach. Co., 668 F.3d
677, 687 (9th Cir. 2012). We have required that a plaintiff
show that a defendant engaged in “malicious, fraudulent,
deliberate or willful” infringement. See, e.g., Lindy Pen Co.
v. Bic Pen Corp., 982 F.2d 1400, 1409 (9th Cir. 1993),
superseded by statute on other grounds, Trademark
Amendments Act of 1999, Pub. L. No. 106-43, 113 Stat. 218.

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We interpret the fee-shifting provisions in the Patent Act,
35 U.S.C. § 285, and the Lanham Act in tandem. See Int’l
Olympic Comm. v. S.F. Arts & Athletics, 781 F.2d 733,
738–39 (9th Cir.), as amended, 789 F.2d 1319 (9th Cir.
1986), aff’d, 483 U.S. 522 (1987). The fee-shifting
provisions in both acts are “parallel and identical.” GeorgiaPacific Consumer Prods. LP v. von Drehle Corp., 781 F.3d
710, 720 (4th Cir. 2015), as amended (Apr. 15, 2015). Thus,
we rely on an interpretation of the fee-shifting provision in
one Act to guide our interpretation of the parallel provision in
the other. See Octane Fitness, LLC v. ICON Health &
Fitness, Inc., 134 S. Ct. 1749, 1756 (2014) (interpreting the
Patent Act by relying in part on “the Lanham Act’s identical
fee-shifting provision”).
The Supreme Court has recently clarified how courts
should analyze fee requests under the Patent Act. The
Supreme Court held that a district court analyzing a request
for fees under the Patent Act should look to the “totality of
the circumstances” to determine if the infringement was
exceptional. Octane Fitness, 134 S. Ct. at 1756. The
Supreme Court explained that “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.”
Id. The Court eschewed a “precise rule or formula for
making these determinations” and instructed that “equitable
discretion should be exercised ‘in light of the considerations
we have identified.’” Id. (quoting Fogerty v. Fantasy, Inc.,
510 U.S. 517, 534 (1994)). Specifically, the Court cited a
“‘nonexclusive’ list of ‘factors,’ including ‘frivolousness,
motivation, objective unreasonableness (both in the factual
and legal components of the case) and the need in particular

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circumstances to advance considerations of compensation and
deterrence.’” Id. at 1756 n.6 (quoting Fogerty, 510 U.S. at
534 n.19). The Court further clarified that the applicable
burden of proof for fee entitlement was the preponderance of
the evidence standard and not proof by “clear and convincing
evidence.” Id. at 1758.
In a second decision issued the same day, the Supreme
Court held that Courts of Appeal should review a district
court’s award of fees under the Patent Act for abuse of
discretion. Highmark Inc. v. Allcare Health Mgmt. Sys., Inc.,
134 S. Ct. 1744, 1748–49 (2014).
Following these decisions, the Third, Fourth, Fifth, and
Sixth Circuits have recognized that Octane Fitness changed
the standard for fee-shifting under the Lanham Act. Baker v.
DeShong, 821 F.3d 620, 621–25 (5th Cir. 2016); GeorgiaPacific Consumer Prods., 781 F.3d at 720–21; Slep-Tone
Entm’t Corp. v. Karaoke Kandy Store, Inc., 782 F.3d 313,
317–18 (6th Cir. 2015); Fair Wind Sailing, Inc. v. Dempster,
764 F.3d 303, 313–15 (3d Cir. 2014). Only the Second and
Seventh Circuits have applied earlier case law to Lanham Act
fee disputes, and both did so without mentioning Octane
Fitness or Highmark. Merck Eprova AG v. Gnosis S.p.A.,
760 F.3d 247, 265–66 (2d Cir. 2014); Burford v. Accounting
Practice Sales, Inc., 786 F.3d 582, 588 (7th Cir. 2015).
We agree with the majority of our sister circuits and
conclude that Octane Fitness and Highmark have altered the
analysis of fee applications under the Lanham Act.
Therefore, district courts analyzing a request for fees under
the Lanham Act should examine the “totality of the
circumstances” to determine if the case was exceptional,
Octane Fitness, 134 S. Ct. at 1756, exercising equitable

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discretion in light of the nonexclusive factors identified in
Octane Fitness and Fogerty, and using a preponderance of the
evidence standard. Pursuant to Highmark, our review of the
district court’s decision on fees awarded under the Lanham
Act is for abuse of discretion. 134 S. Ct. at 1748–49. We
overrule our precedent to the contrary.
With this correction in the law, we return control of the
case to the three-judge panel for resolution of the remaining
issues presented by the case.
REMANDED.