Antitrust Law Daily Wrap Up, ADVERTISING—S.D. Ohio: $850K in attorney fees awarded for malicious Lanham Act violations, (Oct 9, 2014)

By Greg Hammond, J.D.

An emergency and exit lighting products manufacturer was awarded more than $850,000 in attorney fees for a competitor’s willful, malicious, and deliberate violations of the Lanham Act by false advertising. In partially granting the manufacturer’s motion for attorney fees, the federal district court in Columbus, Ohio decided that this was an exceptional case, warranting fee shifting (Kehoe Component Sales Inc. v. Best Lighting Products, Inc., October 8, 2014, Sargus, E.).

Kehoe Component Sales Inc., doing business as Pace Electronic Products, and Best Lighting Products, Inc. both produce and sell emergency and exit lighting products. The parties started conducting business together in 2000, when the Pace companies manufactured products for Best. However, the relationship eventually soured, and Pace included pictures of Best’s products in its catalogue, in an effort to sell Best’s products under the Pace name. The court found that Pace’s conduct constituted misleading representation through markets as to the origin of a product, in violation of the Lanham Act. Best moved for attorney’s fees, interest, and costs.

According to the court, a prevailing party is entitled to attorney fees under the Lanham Act in “exceptional cases” involving malicious, fraudulent, willful, or deliberate infringement. The court previously concluded that Pace acted with actual malice when it took best’s products and sold them without Best’s permission or with Pace’s name attached to them, in violation of the Lanham Act. Consequently, attorney fees and fee shifting was deemed appropriate in this case. Specifically, the court awarded Best $851,102 in attorney fees and interest. Best’s additional request for costs had to be brought as a separate motion, because Best failed to provide sufficient detail of its expenses.

The case number is 2:10-CV-00789.

Attorneys: James Douglas Colner (Shumaker Loop & Kendrick LLP) and Thomas F. Knab (Underberg & Kessler LLP) for Kehoe Component Sales Inc., and Pace Technology Company Ltd. Edward Joel Wesp (Wesp/Barwell, LLC) for Best Lighting Products Inc.

Companies: Kehoe Component Sales Inc.; Pace Technology Company Ltd.; Best Lighting Products Inc.

Cases: Advertising OhioNews