## Facts

- Nightingale Home Healthcare, Inc., a home-healthcare provider, bought Anodyne Therapy, LLC’s infrared lamp devices for patient use.
- After a business dispute over pricing, Nightingale sued Anodyne under the Lanham Act, alleging false advertising based on statements that the lamps were FDA-approved to treat a particular illness.
- The district court granted summary judgment to Anodyne on the Lanham Act claim, finding it meritless and brought to coerce a price reduction.
- Anodyne, as the prevailing party, moved for attorneys’ fees under 15 U.S.C. § 1117(a), which permits fees only in “exceptional cases.”
- The district court awarded Anodyne $72,747 in attorneys’ fees, citing the baselessness of the claim and litigation conduct that increased defense costs.
- Nightingale did not appeal the merits judgment but appealed the fee award.

## Issues

1. Whether the suit qualified as an “exceptional case” under 15 U.S.C. § 1117(a), permitting an attorneys’ fee award to the prevailing defendant.
2. What standard governs “exceptional” in Lanham Act fee-shifting when the prevailing party is a defendant.
3. Whether the district court abused its discretion in awarding $72,747 in fees based on the claim’s lack of merit, improper purpose, and cost-increasing litigation conduct.

## Decision

- The Seventh Circuit affirmed the attorneys’ fee award.
- The court held that “exceptional” under § 1117(a) centers on abuse-of-process type conduct—oppressive or unreasonable behavior in bringing or litigating the case—rather than requiring a rigid showing of traditional bad faith.
- The district court acted within its discretion in finding the case exceptional because:
  - the Lanham Act claim lacked merit and was effectively baseless, and
  - the suit was brought to gain economic leverage in a price dispute and litigated in a way that unnecessarily increased defense expenses.

## Legal Principles

- Under 15 U.S.C. § 1117(a), attorneys’ fees may be awarded to a prevailing party only in “exceptional cases.”
- In the Seventh Circuit, an “exceptional” Lanham Act case is one involving abuse of process, including suits that are meritless and pursued for harassment, economic coercion, or other improper purposes, or litigation conduct that is oppressive or unreasonably increases the opponent’s costs.
- A fee award under § 1117(a) is reviewed on appeal for abuse of discretion; the trial court’s findings about purpose, merit, and litigation conduct may support an “exceptional case” determination.

## Conclusion

The court upheld fee-shifting to the prevailing defendant because the Lanham Act claim was meritless, used as leverage in a commercial pricing dispute, and prosecuted in a manner that inflated defense costs, making the case “exceptional” under § 1117(a).


Nightingale Home Healthcare, Inc. v. Anodyne Therapy, LLC, 626 F.3d 958 (7th Cir. 2010)