When Trademark Enforcement Becomes the Liability
Trademark enforcement exists to protect value. A strong mark can carry customer trust, marketplace visibility, licensing leverage, investor confidence, distribution access, and goodwill that may have taken years to build. When another business uses a similar name, product label, marketplace listing, domain, package, advertisement, or brand presentation, the owner may need to act before confusion spreads or the market begins treating the copy as acceptable.
Even so, trademark enforcement can become a liability when the strategy outruns the claim. The problem is not aggressive enforcement itself. The problem begins when the right being asserted is weaker than assumed, the evidence does not support the requested remedy, the demand is broader than the commercial harm, or the litigation continues after facts emerge that should have narrowed the case.
That is why recent fee decisions matter for brand owners and executives. Section 35(a) of the Lanham Act allows courts to award reasonable attorney fees to the prevailing party in “exceptional cases.” The rule cuts both ways. A successful trademark owner may seek fees from an infringer, while a successful defendant may seek fees after defending against an exceptional case. The financial consequence can be material. In August 2026, Bloomberg Law reported that an Arizona federal judge awarded Central Coast Agriculture roughly $2.5 million in attorney fees after criticizing litigation tactics in the RAW and Raw Garden dispute.
The lesson is not that trademark owners should hesitate to protect valuable brands. The sharper lesson is that trademark enforcement should be treated as a business-risk decision, not an automatic response to every similar mark. The right, the evidence, the commercial harm, the requested remedy, and the litigation conduct all need to stay aligned.
Trademark Enforcement Is a Business Decision Before It Is a Lawsuit
Trademark enforcement often begins with urgency because the asset is personal to the company. A founder sees a competitor using a confusingly close name. A product team finds familiar packaging in the same channel. A sales team hears customers ask whether two businesses are connected. Those moments deserve attention because trademark rights can weaken commercially if owners ignore meaningful confusion.
However, urgency should not replace analysis. A serious enforcement decision starts by identifying the right being protected. The company should know which mark is being asserted, who owns it, whether the registration is live, which goods or services are covered, when use began, where priority exists, and how the accused use appears in the market. Without that review, trademark enforcement can begin from confidence that the record later fails to support.
The next question is commercial harm. Some conflicts threaten a brand immediately. Counterfeit products, direct competitors, expanding paid ads, marketplace listings, distributor confusion, and unauthorized uses affecting core customers may justify decisive action. Other conflicts may be narrow, geographically remote, descriptive, referential, or capable of resolution through a limited agreement. Treating every similarity as an existential threat can increase cost without improving protection.
A disciplined trademark enforcement strategy therefore begins with the business outcome. The company may need cessation, a name change, packaging revisions, marketplace removal, channel separation, geographic limits, coexistence terms, a license, damages, or an injunction. The remedy should fit the harm. When the demand becomes broader than the problem, the enforcement record can begin to work against the owner.
A Lanham Act Exceptional Case Can Shift Trademark Attorney Fees
The fee-shifting issue comes from 15 U.S.C. § 1117(a), which provides that courts may award reasonable attorney fees to the prevailing party in exceptional cases. The statute does not limit the remedy to plaintiffs. A prevailing defendant can also seek fees if the case stands out under the applicable standard.
The modern framework comes from Octane Fitness LLC v. ICON Health & Fitness, Inc., a Patent Act case whose reasoning has been adopted in Lanham Act fee disputes by multiple courts. The Supreme Court explained that an exceptional case is one that stands out from others because of the substantive strength or weakness of a party’s litigating position, considering the law and facts, or because of the unreasonable manner in which the case was litigated. The inquiry is discretionary, case-specific, and based on the totality of the circumstances.
That standard matters because bad faith is not the only route to fee exposure. Courts may consider frivolousness, motivation, objective unreasonableness, compensation, deterrence, and litigation conduct. They may also consider how the case developed over time. A claim that looked arguable at the start can become harder to justify after discovery undermines the owner’s assumptions.
The Ninth Circuit adopted the Octane Fitness framework for Lanham Act fee applications in SunEarth v. Sun Earth Solar Power, holding that courts should examine the totality of the circumstances, use equitable discretion, consider the nonexclusive Octane factors, and apply the preponderance of the evidence standard. That matters for the RAW and Raw Garden dispute because the Arizona district court sits within the Ninth Circuit.
Losing a Trademark Case Is Not Enough
The most important limit is also the most practical: losing does not automatically make a trademark enforcement case exceptional. Trademark disputes can be fact-intensive, commercially urgent, and legally debatable. Courts do not shift fees merely because one side enforced hard and lost.
That point protects legitimate brand enforcement. Trademark owners need room to protect marks against confusing use, counterfeits, bad-faith adoption, and conduct that diverts goodwill. A company should not treat every risk of defeat as a reason to stand down. The better question is whether the claim has a reasonable factual and legal foundation, whether the requested remedy is proportional, and whether the litigation conduct remains connected to resolving the dispute.
Nike and Lontex provide a useful counterweight. Lontex sued Nike over the phrase COOL COMPRESSION and obtained a jury finding of willful infringement. The district court awarded fees and expenses approaching $5 million, but the Third Circuit vacated the initial fee award in 2024 because the district court relied too heavily on broad policy considerations, including Nike’s size, Lontex’s smaller position, the general cost of trademark litigation, and the importance of trademark enforcement. The case had to stand out on its specific facts and conduct, not because litigation was expensive or one party was larger than the other.
The later procedural history reinforces the business point. Bloomberg Law reported on August 21, 2026 that Nike and Lontex persuaded the Third Circuit to vacate a lower court fee ruling after reaching a post-oral-argument settlement. The accurate lesson is not that Nike currently owes Lontex $5 million in fees. The better lesson is that a large fee award can become part of the economics, leverage, and settlement architecture of a trademark enforcement dispute.
The Conduct That Starts Increasing Fee Risk
Fee exposure grows when the record begins to show that the case stands out from ordinary trademark litigation. That can happen because the claim is unusually weak, because the litigation conduct becomes unreasonable, or because the case continues after facts emerge that should have narrowed or ended it.
A weak claim may involve rights asserted far outside the registration, poor priority, highly dissimilar marks, unrelated goods or services, little plausible confusion, dilution theories that do not fit the statutory framework, or positions that conflict with controlling law. None of those problems automatically creates an exceptional case. Together, they can make trademark enforcement look less like brand protection and more like pressure.
Pre-suit investigation is equally important. The first demand letter should not be the first time anyone tests ownership, registration scope, priority, the accused use, customer overlap, channels of trade, confusion evidence, or possible defenses. A trademark owner does not need to know every fact before sending a letter, but it should know enough to avoid making allegations the record cannot support.
Risk also increases when the case materially weakens and the owner continues litigating as though nothing changed. Discovery may show that the goods are less related than assumed. Customer evidence may undercut confusion. A survey may fail. A registration may become vulnerable. Testimony may contradict the original narrative. A court may reject a major theory. At those points, management should ask whether the evidence still supports the objective, rather than whether more pressure can still be applied.
Discovery conduct can also change the fee picture. Overbroad discovery, unnecessary confidentiality fights, resistance to straightforward production, motions that do not materially advance the case, avoidable expert disputes, and delay can all become part of the court’s view of the total record. Firm litigation is not the problem. The problem is litigation conduct that appears designed to impose cost rather than resolve a legitimate trademark dispute.
A Cease and Desist Letter Can Set the Later Record
A trademark cease and desist letter is often treated as a template, but it is better understood as the first litigation document the other side may save. If the dispute escalates, that letter can become part of the story about whether the trademark owner behaved reasonably.
Before sending one, the owner should test the rights being asserted. Is the registration live? Does the asserted mark cover the relevant goods or services? Is ownership clean? Is priority plausible? Are there common-law limits? Are there weaknesses in descriptiveness, genericness, abandonment, or licensing history? A demand built on an untested portfolio can invite a stronger response than the owner expected.
The accused use also needs scrutiny. The target may be using the phrase descriptively, nominatively, geographically, comparatively, or expressively. The goods may be unrelated. The audience may be different. The allegedly infringing wording may not function as a mark. If those issues are ignored, the letter may overstate the claim and reduce credibility.
Then comes the remedy. The business may need full cessation, but it may instead need packaging modification, a revised product page, marketplace removal, domain transfer, geographic limits, a phase-out, a disclaimer, a license, or coexistence terms. Demanding everything because everything can be demanded is not strategy. It can make settlement harder and give the recipient a record of overreach.
The tone should be firm, but the substance matters more than theatrical severity. Harsh wording alone will not usually make a case exceptional. Unsupported factual accusations, exaggerated legal claims, threats disconnected from viable remedies, and refusal to narrow after legitimate concerns are raised can matter later. The letter should be written for the objective the business actually needs.
RAW and Raw Garden Shows How Trademark Enforcement Conduct Accumulates
The RAW and Raw Garden dispute is useful because it shows how a court can view years of trademark enforcement as one cumulative record. BBK sold smoking-related products under RAW branding. Central Coast Agriculture sold cannabis products under RAW GARDEN. The litigation began in 2019, generated extensive proceedings, produced an earlier Ninth Circuit appeal, and continued into fee litigation after trial. The Ninth Circuit’s 2024 opinion described the dispute as involving BBK’s RAW-branded smoking-related products and Central Coast’s RAW GARDEN cannabis products.
Bloomberg Law reported on August 21, 2026 that the Arizona court awarded Central Coast Agriculture roughly $2.5 million in attorney fees after calling out BBK’s litigation tactics in the dispute over “Raw.” The quoted language was unusually pointed, with the court describing business “lawfare” as the use of flimsy legal arguments and scorched-earth litigation to pressure competitors into submission.
That ruling should not be read as a new trademark bullying test. It was a district court fee ruling applying the Lanham Act’s exceptional-case framework to a developed record. The practical importance lies in accumulation. A broad demand, weak factual allegation, discovery fight, refusal to narrow, aggressive motion, or expensive litigation position may not decide the case alone. Together, they can contribute to the totality of the circumstances.
For trademark owners, the case is a warning about discipline. A decision that seems tactical in isolation can look different years later when the court reviews the full enforcement history. If the right, evidence, harm, and remedy drift apart, trademark enforcement can become the liability the business failed to budget.
Nike and Lontex Shows Why Exceptionality Must Be Case-Specific
The Nike and Lontex dispute adds important nuance because it shows what does not justify fee-shifting by itself. A large company’s resources, the general cost of trademark litigation, a party’s success at trial, and broad policy concerns about enforcing marks do not automatically make a case exceptional.
That principle helps both sides. A trademark owner that wins a difficult case should not assume it will recover attorney fees merely because it prevailed. A defendant that defeats a claim should not assume the plaintiff will pay fees merely because the owner enforced aggressively. The exceptional-case standard requires something more specific, either in the merits or in the manner of litigation.
The procedural history also shows how fee disputes can extend the cost curve. A case can move from trial to fee motion, from fee ruling to appeal, from remand to renewed findings, and from renewed fee litigation to settlement. Even when the underlying infringement issue is largely resolved, trademark enforcement costs may continue through the fee phase.
For executives, that is the business warning. Fee-shifting exposure is not a post-judgment footnote. It should be part of the enforcement budget from the beginning, alongside the company’s own fees, possible damages, discovery disruption, executive time, settlement pressure, appeal risk, and reputational consequences.
Trademark Bullying Is a Warning Label, Not a Standalone Lanham Act Claim
“Trademark bullying” is a useful phrase because it describes a real business pattern: an owner asserts rights beyond what the law or facts fairly support, often to pressure a smaller or less-resourced party. Still, the term should be used carefully. It is not a standalone federal cause of action under the Lanham Act.
The more precise question is what consequences the conduct creates. Overreaching trademark enforcement may support a fee motion in an exceptional case. Unsupported factual allegations may create sanction risk. Discovery conduct may lead to discovery sanctions. Unreasonable multiplication of proceedings may raise separate procedural issues. A heavy-handed demand may invite a declaratory judgment action. A public enforcement campaign may create reputational consequences.
That distinction matters because the law does not punish confidence. It scrutinizes litigation positions and conduct that cross legal lines. A trademark owner can make a firm demand, seek emergency relief, refuse unreasonable settlement terms, and litigate forcefully when the evidence and commercial stakes justify it. The problem begins when enforcement pressure replaces merits discipline.
The better executive question is therefore not whether the company sounds aggressive. The better question is whether the company can defend each step as commercially necessary, legally grounded, and proportional to the harm. If that answer weakens, the strategy should change.
Trademark Enforcement Should Be Reassessed at Decision Points
A trademark enforcement strategy should not proceed on the assumptions that existed when the first letter was sent. Facts develop. The market record changes. The other side produces documents. Customers speak, or they do not. Experts test the confusion theory. Judges reject or narrow claims. Each of those moments should trigger reassessment.
The first decision point often comes after the response to the demand letter. If the recipient identifies a credible priority issue, descriptive use, nominative use, unrelated goods, geographic limitation, or factual error, the owner should test it before escalating. Ignoring a serious response can make later conduct look less reasonable.
The next decision point comes after early discovery. If emails, sales channels, customer records, or marketplace evidence do not support the original theory, the company should reconsider the remedy. A narrower settlement may protect the brand better than a broad claim that becomes harder to justify.
Expert reports and surveys create another checkpoint. A weak confusion survey does not automatically destroy a case, but it should affect risk analysis. Summary judgment, remand, trial rulings, and post-trial motions create additional moments for recalibration. After each event, management should ask whether the evidence still supports the objective, what the remaining cost curve looks like, and whether fee-shifting exposure has changed.
This is where counsel’s role becomes especially valuable. A trademark enforcement attorney should not simply escalate. Counsel should help management decide whether to press, narrow, settle, pause, or pivot based on the evolving record.
Strong Trademark Enforcement and Scorched-Earth Enforcement Are Different
Strong trademark enforcement is disciplined. It begins with verified rights, evidence of commercial harm, a realistic confusion theory, and a remedy that fits the problem. It uses correspondence, marketplace tools, TTAB proceedings, court litigation, or settlement based on what each forum can actually accomplish.
Scorched-earth enforcement behaves differently. It assumes scope before testing it. It treats similarity as infringement without a serious confusion analysis. It demands maximum relief by default. It resists narrowing after facts change. It uses discovery as pressure. It measures success by the burden imposed on the other side rather than the business outcome achieved.
The difference is not politeness. A strong enforcement letter can be direct. A preliminary injunction request can be aggressive. A counterfeit case may require swift action. The dividing line is whether the strategy remains tied to the right, the evidence, the harm, and the remedy.
That distinction also matters for settlement. A commercially rational owner evaluates settlement against the value of the mark, the severity of the threat, the cost curve, the likelihood of success, and the downside risk. A scorched-earth posture rejects narrowing because compromise feels like weakness. In fee-shifting analysis, that mindset can become expensive if the record later shows that the claim did not justify the burden imposed.
Trademark Litigation Costs Belong Inside the Enforcement Budget
Trademark litigation costs are usually discussed as the company’s own cost of enforcement. That is only part of the analysis. In an exceptional case, the losing party may face the other side’s fees as well. The complete risk picture includes the company’s own legal fees, possible damages, expert costs, discovery disruption, executive time, settlement leverage, appeal costs, and potential adverse fee exposure.
That is why trademark enforcement should be budgeted in phases. A demand-letter phase has one cost profile. A preliminary injunction has another. Discovery, expert reports, summary judgment, trial, post-trial motions, fee motions, and appeal each change the economics. A company does not need perfect predictions, but it should understand when the next phase creates a different level of exposure.
The RAW and Nike/Lontex disputes show why fee exposure cannot be treated as theoretical. In RAW, the reported fee award was roughly $2.5 million. In Nike/Lontex, a fee award approaching $5 million became part of the appellate and settlement posture before vacatur. Those figures are case-specific, but they illustrate the same executive concern: trademark enforcement can create material financial risk when the strategy is not disciplined.
The budgeting question should therefore include fee-shifting from the beginning. If the company loses after pursuing a weak claim or litigating in an unreasonable way, what is the plausible exposure to the other side’s fees? If the company wins, is there a realistic basis to seek fees, or would doing so extend the dispute with limited practical benefit? These questions should be answered while the business can still choose a proportional path.
A Commercially Rational Trademark Enforcement Process Protects the Brand and the Record
The best enforcement process is not timid. It is documented, proportional, and reassessed. It starts with confirmation of the owner’s rights, preservation of the accused use, evaluation of confusion evidence, and identification of the business outcome the company needs.
From there, counsel can choose the right enforcement path. A platform report may solve a counterfeit listing. A narrow letter may resolve a packaging issue. A coexistence agreement may handle a limited conflict. A TTAB opposition may be right when registration is the problem. A lawsuit may be necessary when marketplace use must be stopped or damages are needed. Emergency relief may be appropriate when the harm is immediate.
The same process should continue after escalation. As evidence develops, the company should revisit claim strength, remedy, cost, settlement range, and fee-shifting downside. That discipline can make the enforcement position stronger because it shows that the owner was protecting a legitimate asset rather than using litigation cost as the strategy.
Trademark rights deserve serious protection. They also deserve serious judgment. When the right, evidence, commercial harm, and enforcement path stay aligned, trademark enforcement can protect brand value. When they separate, trademark enforcement can become the liability.
Kennington combines legal discipline with industry insight, helping companies and creators secure, protect, and enforce their rights across the United States and internationally while supporting the long-term value of the brands, content, and businesses they build.
- When Trademark Enforcement Becomes the Liability - September 22, 2026
- What Trademark Infringement Looks Like - September 15, 2026
- Can You Trademark Yourself and Protect Name Image Likeness Rights - September 8, 2026
