IP Law Daily, TRADEMARK—2d Cir.: Sanctions against law firm for bad-faith litigation in ‘Reply All’ trademark suit upheld, (Oct 17, 2025)

By Ravindra Kumar Singh, B.L.

Second Circuit affirms $900,000 fee award and sanctions against counsel for vexatious conduct under the Lanham Act and 28 U.S.C. §1927.

The U.S. Court of Appeals for the Second Circuit affirmed a New York district court's decision, holding the law firm Balestriere Fariello jointly and severally liable with its client, Reply All Corp., for attorney fees exceeding $900,000 owed to Gimlet Media, Inc. The court found that the case was "exceptional" under the Lanham Act, 15 U.S.C. §1117(a), and that counsel's conduct warranted sanctions under 28 U.S.C. §1927 for unreasonably and vexatiously multiplying proceedings. The appellate court concluded that the plaintiff's claims were objectively unreasonable, pursued in bad faith, and intended to extract a nuisance settlement rather than to vindicate legitimate trademark rights (Balestriere Fariello v. Gimlet Media, Inc., No. 24-2155 (2d Cir. Oct. 15, 2025)).

Background. Reply All Corp., a technology company developing communication software, filed a trademark infringement lawsuit against Gimlet Media, Inc., a podcast production firm based in New York, in August 2015. The dispute centered on Gimlet’s well-known podcast “Reply All”, which the plaintiff claimed infringed its software brand of the same name. Balestriere Fariello, a New York-based law firm, entered the case as Reply All’s counsel.

The asserted mark, “Reply All”, was associated with Reply All Corp.’s communication software platform. The company alleged that Gimlet’s podcast title and accompanying logo were confusingly similar and likely to mislead consumers as to source or affiliation. The claims were brought under the Lanham Act, asserting trademark infringement, false designation of origin, and reverse confusion.

The district court granted summary judgment to Gimlet Media on all counts, finding no likelihood of confusion between the software and the podcast. On appeal, the Second Circuit affirmed in 2021, concluding that none of the eight Polaroid factors weighed in the plaintiff’s favor and that no reasonable jury could find confusion.

Following its victory, Gimlet sought attorney fees under 15 U.S.C. §1117(a) and 28 U.S.C. §1927, arguing that the litigation was baseless and pursued in bad faith. The district court granted the motion, awarding Gimlet a total of $1,071,981 in fees. It held Reply All solely liable for $168,944.21 and imposed joint and several liability on Reply All and Balestriere Fariello for the remaining $903,036.79. The district court later denied the firm’s motion for reconsideration, prompting this appeal.

Exceptional case finding. The Second Circuit upheld the district court’s conclusion that the case was “exceptional” within the meaning of §1117(a). Relying on Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014), the panel noted that an exceptional case is one that stands out due to the weakness of the litigating position or the unreasonable manner of litigation. The court emphasized that the plaintiff’s position was “objectively unreasonable,” supported only by “scant anecdotal evidence” of consumer confusion and no meaningful competitive overlap between the products.

The district court had also found that the plaintiff acted in bad faith, using the litigation primarily to pressure Gimlet into settlement. It cited Reply All's reliance on inconsistent and unsupported damages theories—ranging from $4 million to $60 million—and its prior offer to license the mark for $1 per year. The appellate court found these facts sufficient to justify the "exceptional case" designation and affirmed the fee award under the Lanham Act.

Attorney liability. Next, the Second Circuit affirmed the imposition of sanctions against Balestriere Fariello under 28 U.S.C. §1927, which permits courts to hold attorneys personally responsible for excess costs and fees resulting from unreasonable and vexatious conduct. The appellate panel agreed that the firm advanced frivolous and meritless arguments, attempted to "extort a nuisance settlement," and multiplied proceedings through unnecessary motions and expert disputes.

Citing Kim v. Kimm, 884 F.3d 98 (2d Cir. 2018), the court reiterated that sanctions under §1927 require clear evidence of the lack of a colorable claim and bad faith. The district court’s detailed findings—that the firm pursued litigation knowing its futility and imposed needless costs—met this standard.

Joint and several liability. The court also affirmed the district court’s decision to hold Reply All Corp. and its counsel jointly and severally liable for the fees incurred during the firm’s representation. Drawing on Calloway v. Marvel Ent. Grp., 854 F.2d 1452 (2d Cir. 1988), the panel reasoned that apportionment of responsibility was impracticable because of the intertwined conduct of the client and counsel. The court found that the district court acted within its discretion in allocating liability in this manner, particularly since the firm was not held responsible for fees incurred before its engagement.

Evidentiary hearing. Balestriere Fariello argued that the district court erred by denying its request for an evidentiary hearing. The Second Circuit rejected this argument, explaining that a formal hearing is unnecessary when sanctions are based on an established record and the parties have had full opportunity to be heard through written submissions. The court observed that no material factual disputes warranted additional proceedings and that the district court correctly exercised its discretion in deciding the matter without oral argument.

The Case is No. 24-2155.

Judge: Pérez, M.

Attorneys: John G. Balestriere (Balestriere Law Firm) for Balestriere Fariello. John L. Strand (Wolf, Greenfield & Sacks, PC) for Gimlet Media, Inc.

Companies: Gimlet Media, Inc.

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