On July 29, 2026, the U.S. Court of Appeals for the Third Circuit affirmed an award of attorneys’ fees to defendants who prevailed on trademark and copyright infringement claims in Warman v. Local Yokels Fudge, LLC, 2026 WL 2186299.  The decision highlights the exposure plaintiffs have if they continue to litigate intellectual property claims after significant factual or legal weaknesses become apparent.

The case arose out of disputes involving plaintiff Christopher Warman’s fudge business and his “Chocolate Moonshine Co.” brand, including ownership and use of a trademark, photographs used to market the fudge, and the alleged misappropriation of Warman’s fudge recipe. Warman, his family trust, and Chocolate Moonshine, LLC sued several individuals and competing fudge businesses in the U.S. District Court for the Western District of Pennsylvania, asserting trademark infringement, copyright infringement, and trade secret misappropriation.  

The Court granted summary judgment to the defendants on the trademark and copyright claims, finding that the trademark registration had been fraudulently procured and that Warman’s son had authorized certain defendants to use the copyrighted photographs. The trade secret claims proceeded to trial, where the plaintiffs prevailed.

After the trial, the defendants moved for attorneys’ fees on the unsuccessful trademark and copyright claims.  The District Court awarded fees on both.  As to the trademark claim, the court found the case was “exceptional” under the Lanham Act because the plaintiffs had litigated the claim in an unreasonable manner by pursuing it even after learning that their trademark registration was void due to fraud on the Patent and Trademark Office. As to the copyright claims, the Court relied on the defendants’ degree of success, the objective unreasonableness of the claims, and Warman’s apparent improper motivation, finding that the plaintiffs “had no support for their copyright infringement claims but pursued them anyway.”  

The Third Circuit affirmed the fee awards. The Third Circuit rejected the plaintiffs’ argument that attorneys’ fees could not be awarded on copyright claims if they had a reasonable factual basis.  The Court explained that objective unreasonableness is a substantial factor in determining whether to award attorneys’ fees, but is not controlling, and emphasized that a court may order fee-shifting based on a party’s “litigation misconduct, whatever the reasonableness of his claims or defenses.”  

This decision makes clear that the strength of a claim at the outset of a case is not the only factor determining the degree of risk in pursuing trademark or copyright claims, and shows that parties must reassess their intellectual property claims as litigation proceeds.