LegalForce v. MH Sub I — Trademark Firm Ordered to Pay $92K After Case Built on Fabricated Promotion Claims Collapses at Trial

Background

LegalForce RAPC Worldwide, a law firm specializing in trademark registration, sued MH Sub I — the company behind the online lawyer-referral platform LawFirms.com — alleging that MH Sub’s use of certain marks infringed two of LegalForce’s trademarks. LegalForce’s complaint claimed its marks had become well-known because it had spent $10 million promoting them, and the firm demanded $1 million in damages, later increasing the demand to $15 million.

At a bench trial before Senior District Judge William Alsup, LegalForce’s case fell apart. The court found that LegalForce could not show it had spent “even one dollar directly promoting” the asserted marks — the purported $10 million figure was entirely fabricated. The accused mark was not confusingly similar, and MH Sub had never referred even a single lead to any law firm while using the disputed mark. Judge Alsup entered judgment for the defendant.

MH Sub then moved for attorney’s fees under the Lanham Act’s exceptional-case provision. The motion was decided by Judge Corley after Judge Alsup’s retirement.

The Court’s Holding

Judge Corley found the case “exceptional” under the Lanham Act, warranting a fee shift. The court’s central finding was damning: LegalForce “alleged facts it knew to be false, discovered other facts demonstrating its case was meritless, took steps to obscure those facts, and continued to litigate.” The fabricated $10 million promotion claim was the most striking example — under cross-examination at trial, LegalForce’s CEO Raj Abhyanker was revealed to have “testified misleadingly under oath,” as zero of the purported $10 million had been spent on ads displaying the actual marks at issue.

However, the court did not award the full $1.3 million in fees that MH Sub requested. Judge Corley scrutinized the defendant’s billing in detail, finding that MH Sub had also contributed to unnecessary litigation costs — particularly by delaying court-ordered discovery productions and by failing to move for summary judgment when the evidence clearly warranted it. The court reduced the award to $74,950 in fees plus $17,670.05 in costs, for a total of approximately $92,620.

Key Takeaways

• Fabricated evidence triggers fee-shifting. Alleging promotional spending you cannot substantiate — and then testifying misleadingly about it — is the kind of litigation misconduct that transforms an ordinary trademark case into an “exceptional” one warranting fees.
• Fee awards cut both ways. The court reduced the requested fees by over 90%, criticizing the defendant for failing to move for summary judgment when it had the evidence to end the case early. Both sides’ litigation strategies contributed to unnecessary expense.
• Courts expect litigants to know their case before filing. The opinion emphasizes that LegalForce continued to pursue claims even after discovery revealed they were meritless — a pattern that weighs heavily in the exceptional-case analysis.

Why It Matters

This case is a cautionary tale for trademark plaintiffs: inflated claims and misleading testimony don’t just lose cases — they can result in significant fee awards. But it’s also a reminder that defendants who want full fee recovery need to litigate efficiently, including by filing dispositive motions when the record supports them. The court’s willingness to critique both sides’ conduct, even while granting the fee motion, reflects a growing judicial emphasis on proportional litigation in IP cases.

Surfaced via Eric Goldman’s Technology & Marketing Law Blog.