Seventh Circuit: I Hate Illinois Nazis.

McDermott Will & Emery has published an article on the Mondaq website (registration required) about a Seventh Circuit decision in which a losing party was required to pay the plaintiff's attorneys' fees because of gross misbehavior during the litigation. According to the piece, and confirmed by this item, the sanctioned party surprisingly chose to litigate by rules other than those of the Marquess of Queensbury (or perhaps not?):

The plaintiff, Te-Ta-Ma Truth Foundation (Foundation), the owner of a federally registered trademark for the mark "Church of the Creator," filed a trademark infringement action against the defendant, World Church of the Creator (World Church), a white supremacist group, for use of the "Church of Creator" mark. World Church’s use of the mark resulted in actual confusion as Foundation, a religious charity that promoted universal love and respect, began to receive complaints and condemnations from third parties after World Church members appeared on the Jerry Springer show and proclaimed hatred for Jews and non-whites.

Throughout the litigation, World Church encouraged its members to send offensive and threatening e-mails and voicemails to the Foundation and the Foundation’s attorneys. In addition, World Church posted press releases on its website flouting its use of the mark even after the issuance of a permanent injunction. Moreover, a member of the World Church was tried and convicted of soliciting the murder of the district court judge and attempting to influence her through corruption and force.

And I thought New York practice was rough.

Just for background: The Lanham Act provides for an award of attorneys' fees in "exceptional cases." Different circuits have different standards for what constitutes "exceptional cases." Cooper & Dunham in New York has an excellent summary on this topic here. The novelty of the Seventh Circuit case, however, was that an exceptional case may not only be determined from the merits of the claims and defenses, but the way the game is played as well.

What is the likelihood judges will apply this standard to parties who don't have swastikas burned into their foreheads? Don't hold your breath. Judges really hate to use sanctions (except in family court, it seems, from the calls I get). Then again, even my most lunatic adversary in a trademark litigation (in a case I managed to squeeze myself out of last year, thank God) never put out a contract on federal judge.