In Teal Bay Alliances, LLC v. Southbound One, Inc., the US District Court for the District of Maryland awarded defendant Southbound its reasonable attorneys' fees, ruling that this was an exceptional case under the Lanham Act. The court based its exceptionality finding on the Supreme Court standard articulated in a patent infringement case, Octane Fitness, LLC v. Icon Health & Fitness, Inc.
On January 26, 2015, in Teal Bay Alliances, LLC v. Southbound One, Inc., the US District Court for the District of Maryland awarded Southbound its reasonable attorneys' fees based on the court's ruling that the action presented an exceptional case under Section 35(a)(3) of the Lanham Act (No. 1:13-cv-02180, (D. Md. Jan. 26, 2015)). Section 35(a)(3) of the Lanham Act allows prevailing parties to recover attorneys' fees in exceptional cases but does not define the term exceptional (15 U.S.C. § 1117).
The court found the Third Circuit's rationale in Fair Wind persuasive and predicted that the US Court of Appeals for the Fourth Circuit would follow suit.
Therefore, guided by the Octane and Fair Wind decisions, the court held that the case was exceptional because:
Plaintiff Teal's case was based on a trademark registration that Teal had obtained by relying on a false representation.
Teal had not used its trademark in commerce before Southbound first used its mark.
Teal did not establish that Southbound would have infringed its trademark rights by using a name and logo having no similarity to Teal's claimed mark.