how to fight attorney fees under lanham act

Reviewing the denial of attorney fees under the Lanham Act under an abuse of discretion standard, the Fourth Circuit held that “a prevailing party need only prove that a case is exceptional under the Lanham Act by a preponderance of the evidence, and not, as the district court required, clear and convincing evidence.”

Full Answer

Which circuit has a new opinion on the Lanham Act?

Via How Appealing, the Seventh Circuit has a new opinion ( Nightingale Home Healthcare v. Anodyne Therapy) by Judge Posner on when a Court may award attorneys’ fees in Lanham Act (i.e., trademark infringement, trademark dilution, and false advertising) cases.

Is abuse of process a tort?

Abuse of process is the name of a tort. A tort is proved in a tort suit. But a proceeding for an award of attorneys’ fees is not a suit; it is a tail dangling from a suit. Posner resolves the first problem by saying that Congress was amending the Lanham Act to deal with the Fleischmann Distilling Corp.

District courts appear to be embracing a totality of the circumstances test

Any trademark litigator knows that it has historically been difficult to obtain an award of attorney fees in a federal trademark case, no matter how egregious the opposing party’s actions. Section 35 (a) of the Lanham Act provides, in part, “The court in exceptional cases may award reasonable attorney fees to the prevailing party.” 15 U.S.C.

The Octane Fitness Decision

Last year’s Supreme Court decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014), provided an opening for a more liberal standard for fees in trademark cases.

Conclusion

As the district courts attempt to sort out of the implications of the Octane Fitness ruling for trademark claims, courts appear to be embracing a “totality of the circumstances” test that evaluates all relevant factors for each case.

What is the argument for an attorney's fee?

The bulk of Defendants’ argument for an award of attorneys’ fees centers on the Copyright Act, which provides that in a copyright action, “the court in its discretion may allow the recovery of full costs by or against any party other than the United States” including “a reasonable attorney’s fee to the prevailing party as part of the costs.” 17 U.S.C. §505. However, an award of attorneys’ fees under the Copyright Act is a matter of discretion, not of right. Fogerty I, 510 U.S. at 533. Under section 505, “[p]revailing plaintiffs and prevailing defendants are to be treated alike, but attorney’s fees are to be awarded to prevailing parties only as a matter of the court's discretion.” Id. at 534. In determining whether, and how extensively, courts should exercise that discretion, “[d]istrict courts should consider, among other things, [1] the degree of success obtained; [2] frivolousness; [3] motivation; [4] objective unreasonableness (both in the factual and legal arguments in the case); and [5] the need in particular circumstances to advance considerations of compensation and deterrence.” Historical Research v. Carbal, 80 F.3d 377, 378 n.1 (9th Cir. 1996). However, each of those factors is merely a guidepost in the exercise of the court’s “equitable discretion” and “courts are not limited to considering them.” Fantasy, Inc. v. Fogerty (“Fogerty II”), 94 F.3d 553, 559 (9th Cir. 1996). Indeed, “[c]ourts have awarded costs for copyright claims based on a single factor … .” Robinson v. Lopez, No. CV 03-3732-LGB (PLAx), 2003 WL 23162906, at *2 (C.D. Cal. Nov. 24, 2003)

How many hours did Perfect 10 charge?

Perfect 10 next contends that Defendants billing records reflect a “billing frenzy” because defense counsel billed 1,577.1 hours in the first 18 months of litigation compared to 230 hours by Perfect 10’s attorneys. (Dkt. No. 650, p. 22.) As discussed above, Perfect 10’s attempt to compare its underinflated account of its own time is unpersuasive. However, Perfect 10 does identify a number of individual motions for which defense counsel appears to have billed an unusual number of hours. Perfect 10 calculates, for example, that Defendants request 578 hours for its original motion to dismiss and to change venue. (Dkt. No. 650-2, Exh. 2.) Defendants also billed a similar amount of time opposing Perfect 10’s motion for preliminary injunction and billed $346.4 hours to prepare motions to dismiss and strike Perfect 10’s First Amended Complaint, which revisited a number of issues addressed in the original motion to dismiss. (Id.) Defendants do not dispute Perfect 10’s calculations. While the Court is not persuaded that such billing statements reflect a “billing frenzy,” the Court thinks it appropriate to impose a modest reduction on Defendants’ request.

How many motions are there in Perfect 10?

The full procedural history of this litigation is familiar to the parties and too voluminous to recite here. This action has involved more than 30 noticed motions, including a motion for change of venue, two motions to dismiss, three Daubert expert witness motions eight motions for summary judgment, and multiple discovery and sanctions motions. The docket in this action includes nearly 700 entries and exceeds 38,000 pages. Instead, the Court briefly summarizes Perfect 10’s various claims against Defendants and the resolution of each of those claims in Defendants’ favor.

What is the perfect 10?

Perfect 10 argues Defendants’ attorneys charged unreasonably high rates for its partners and associates.11 (Dkt. No. 650, pp. 17-21.) Perfect 10 first notes a number of intellectual property cases decided in this district in the past four years where attorneys billed at rates between $250 per hour and $530 per hour to suggest that Defendants rates are unreasonably high. (Dkt. No. 650, pp. 18-19.) The Court begins by noting that many of the billing rates at issue in this case are well within this limited range Perfect 10 suggests as reasonable in this district. See generally Appendix A, ante. Perfect 10 also argues one of its former attorneys with impressive credentials (Jeffrey Mausner) never charged Perfect 10 more than $320 per hour. (Id., p. 19; Dkt. No. 650-6, ¶3.) Perfect 10 further asserts the so-called “Laffey Matrix” suggests rates between $261.12 per hour for first year associates and $532.48 per hour for senior partners in Los Angeles. (Dkt. No. 650, p. 20; Dkt. No. 650-7, Exh. H.) Additionally, Perfect 10 argues, the American Intellectual Property Law Association (“AIPLA”) Report of Economic Survey identified the median intellectual property partner billing rate in Los Angeles as $575 per hour in 2012, and the median Los Angeles associate billing rate as $395. (Dkt. No. 650-2, Exh. 7.) Perfect 10’s expert John D. O’Connor also opines that this case was not sufficiently complex to warrant Defendants’ use of

Is Perfect 10 a prevailing party?

As discussed more fully above, Defendants are prevailing parties in this action, and the Court finds an award of attorneys’ fees would serve the purposes of the Copyright Act. As prevailing parties, the Court must also award attorneys’ fees under California Civil Code section 3344(a) for Defendants’ successful defense against Perfect 10’s statutory right of publicity claim. Although Defendants are not entitled to attorneys’ fees for their defense of Perfect 10’s common law right of publicity claim, the statutory and common law publicity claims were so inextricably intertwined that it would be impossible (and imprudent) to parse fees among those two claims – a fact Perfect 10 does not dispute.

Does Perfect 10 dispute the copyright?

The bulk of both parties’ arguments centers on Defendants’ request for an award of attorneys’ fees under the Copyright Act. This is unsurprising given that Perfect 10 has only pursued copyright claims since March 8, 2013 when Judge Matz dismissed Perfect 10’s trademark and state-law claims, and the vast majority of litigation in this action occurred solely on Perfect 10’s copyright causes of action. Perfect 10 does not dispute Defendants were “prevailing parties” under 17 U.S.C. §505. Instead, Perfect 10 asserts it would be inappropriate to award Defendants attorneys’ fees under the Copyright Act in light of the Fogerty factors outlined above. Though not an exclusive list of factors for the Court to consider, the Court addresses each of the Fogerty factors in turn. /// /// /// ///

Attorneys Fees, Generally

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Background of The Case

Lanham Act Section 35