## Facts

- LHO Chicago River, L.L.C. owned a downtown Chicago hotel rebranded in 2014 as “Hotel Chicago.”
- Rosemoor Suites, LLC and related entities operated a different Chicago hotel on the west side, rebranded in 2016 as “Hotel Chicago.”
- LHO sued Rosemoor in federal court alleging Lanham Act trademark infringement and unfair competition, plus Illinois deceptive advertising and common-law trademark claims.
- LHO sought a preliminary injunction; a magistrate judge recommended granting it, finding LHO likely had priority and secondary meaning.
- The district judge denied the injunction, finding LHO had not shown it was likely to prove secondary meaning and was unlikely to show “Hotel Chicago” was protectable.
- LHO noticed an interlocutory appeal but then voluntarily dismissed the entire action with prejudice; the district court granted dismissal.
- Rosemoor sought attorney’s fees as the prevailing party under 15 U.S.C. § 1117(a); after an initial remand directing use of the Octane Fitness standard, Rosemoor renewed its fee request (over $630,000).
- On remand, the district court applied Octane Fitness and again denied fees; Rosemoor appealed that denial.

## Issues

1. Whether the district court abused its discretion in denying Rosemoor’s request for attorney’s fees under 15 U.S.C. § 1117(a) after applying the Octane Fitness “exceptional case” standard.

## Decision

- The Seventh Circuit affirmed the order denying attorney’s fees.
- The court held the district court applied Octane Fitness and reasonably concluded Rosemoor did not prove, by a preponderance of the evidence, that the case was exceptional.
- The court agreed that LHO’s claims were not shown to be frivolous or unusually weak, that alleged improper motive evidence was ambiguous, and that the asserted discovery problems reflected ordinary litigation disputes.
- The court held that voluntary dismissal with prejudice established prevailing-party status but did not, by itself, make the case exceptional.

## Legal Principles

- Under 15 U.S.C. § 1117(a), a court may award reasonable attorney’s fees to the prevailing party only in “exceptional cases.”
- A case is “exceptional” if it “stands out” based on (a) the substantive strength of a party’s position or (b) the unreasonable manner in which the case was litigated, assessed under the totality of circumstances.
- The party seeking fees bears the burden to prove exceptionality by a preponderance of the evidence.
- Fee determinations under § 1117(a) are reviewed for abuse of discretion; appellate courts do not reweigh evidence where the district court’s assessment is reasonable.
- Prevailing-party status is necessary but not sufficient for fees; an adverse merits ruling or a dismissal with prejudice does not automatically establish exceptionality.

## Conclusion

The Seventh Circuit held that, applying Octane Fitness, the district court acted within its discretion in denying Lanham Act fees because the record did not show an unusually weak case, improper motive proven with sufficient clarity, or litigation misconduct beyond ordinary disputes, even though the plaintiff dismissed with prejudice.


LHO Chi. River, L.L.C. v. Rosemoor Suites, LLC, 988 F.3d 962 (7th Cir. 2021)