Not really trademark law but it happened in a trademark case:  Defendant tells his law firm a cock-and-bull story.  Submits the story in an affidavit.  The law firm didn’t necessarily believe the story but later testified that it believed that the story was possibly true.  The district court held that the law firm’s belief was objectively unreasonable and sanctioned the law firm.  On  appeal, the Second Circuit holds that in this situation, where neither the adversary nor the Court gave the law firm the opportunity to withdraw the challenged papers, for purposes of sanctions the law firm should be held not to the “objectively unreasonable” standard” but a “bad faith” standard.  There was no finding of bad faith. Click here and search for In re Pennie and Edmonds, 02-7177, March 14.