United States District Court, W.D. North Carolina, Asheville Division
REIDINGER, UNITED STATES DISTRICT JUDGE
MATTER is before the Court on the Plaintiff's
Motion for Attorneys' Fees [Doc. 125]; the
Plaintiff's Bill of Costs [Doc.134]; and the
Defendant's Motion for Clarification of Judgment and
Order [Doc. 132].
Plaintiff, The Biltmore Company (hereinafter
“Plaintiff”), initiated this action on December
23, 2015, asserting federal claims for trademark infringement
and cyberpiracy, as well as state law claims for unfair and
deceptive trade practices, against the Defendant, Nu U, Inc.
(hereinafter “Defendant”), for its alleged use of
the Plaintiff's registered mark BILTMORE. [Doc. 1].
April 5, 2016, with leave from this Court and the
Defendant's consent, the Plaintiff filed an Amended
Complaint presenting five counts against the Defendant. [Doc.
29]. The Plaintiff alleged in its Amended Complaint that
certain uses of BILTMORE by the Defendant infringed upon its
federally registered trademarks in violation of 15 U.S.C.
§§ 1114 and 1125(a). [Id. at ¶¶
73-89, 120-34]. The Plaintiff also alleged that the
Defendant's use of BILTMORE in connection with wedding
related services, retail sales, and retail sales of branded
merchandise constituted false designation of origin in
violation of 15 U.S.C. § 1125(a). [Id. at
¶¶ 90-119]. The Plaintiff further alleged that the
Defendant's use of domain names containing BILTMORE
amounted to cybersquatting under 15 U.S.C. § 1125(d).
[Id. at ¶¶ 135-39].
April 26, 2016, the Defendant filed its Answer and
Counterclaims, asserting various affirmative defenses and two
counterclaims: (1) a claim for a declaratory judgment of
non-infringement pursuant to 28 U.S.C. § 2201 et
seq. and (2) a claim for unfair competition and unfair
and deceptive trade practices in violation of N.C. Gen. Stat.
§ 75-1.1, et seq. (“Chapter 75”).
March 4, 2016, a Case Management Plan was entered and the
parties proceeded to engage in discovery. [Doc. 20]. On May
20, 2016, the Plaintiff filed a motion to dismiss the
Defendant's counterclaims. [Doc. 35]. On December 30,
2016, the Court granted in part and denied in part
Plaintiff's motion to dismiss. [Doc. 35]. In that
decision, the Court dismissed Defendant's Chapter 75
January 10, 2017, both parties filed motions for summary
judgment. [Docs. 61, 63]. On January 27, 2017, the Plaintiff
filed a motion to compel certain discovery from the
Defendant, which the Court denied as untimely on January 30,
2017. [See Docs. 67, 74]. On March 24, 2017, the
Court held a hearing and denied both motions for summary
judgment. [See Minute Order dated March 24, 2017].
15, 2017, the case proceeded to trial. [See Minute
entry dated May 15, 2017]. Upon conclusion of the
Plaintiff's evidence, both parties made oral motions for
the entry of judgment as a matter of law, which were denied.
[See Minute entry dated May 17, 2017]. Upon
conclusion of the Defendant's evidence, both parties
renewed their motions for the entry of judgment as a matter
of law, which were denied. [See Minute entry dated
May 18, 2017]. Following three days of evidence, the jury
returned a verdict in favor of the Plaintiff on the issues of
infringement and cybersquatting. [Doc. 123]. The jury further
found that the Defendant's trademark infringement was
intentional, willful, or in bad faith.
[Id.]. The Court entered a Judgment in accordance
with the jury's verdict on May 25, 2017. [Doc. 124].
entry of the Judgment, the Plaintiff filed a motion for
attorneys' fees and costs pursuant to the Lanham Act.
[Doc. 125, 134]. The Defendant, in turn, filed a motion for
clarification of the Judgment entered May 25, 2017. [Doc.
132]. The Defendant also has filed a notice of
change in circumstances related to its motion for
clarification. [Doc. 146]. These matters have been fully
briefed and are therefore ripe for disposition.
Plaintiff's Request for Attorneys' Fees under the
Plaintiff moves the Court to find that this case is
“extraordinary” and to award $531, 034.42 in
attorneys' fees under the Lanham Act. [Doc.
125]. The Defendant opposes the Plaintiff's
motion, arguing that this case is not
“exceptional.” [Doc. 133]. Alternatively, the
Defendant argues that the Plaintiff's requested fees are
1117(a) of the Lanham Act authorizes a plaintiff in a
trademark infringement case to recover reasonable
attorneys' fees “in exceptional cases.” 15
U.S.C. § 1117(a). The Court may find a case to be
“exceptional” if it finds “in light of the
totality of the circumstances, that (1) there is an unusual
discrepancy in the merits of the positions taken by the
parties, based on the non-prevailing party's position as
either frivolous or objectively unreasonable; (2) the
non-prevailing party has litigated the case in an
unreasonable manner; or (3) there is otherwise the need in
particular circumstances to advance considerations of
compensation and deterrence.” Georgia-Pacific
Consumer Prods. LP v. von Drehle Corp., 781 F.3d 710,
721 (4th Cir. 2015) (quoting in part Octane Fitness, LLC
v. ICON Health & Fitness, Inc., ___U.S.___, 134
S.Ct. 1749, 1756 n.6 (2014)) (other internal citations and
quotation marks omitted). A jury's finding of
willfulness, without more, is not sufficient to support a
finding that a case is “exceptional” within the
meaning of § 1117(a). See Exclaim Mktg., LLC v.
DirecTV, LLC, 674 F. App'x 250, 260 (4th Cir. 2016).
Frivolous or Objectively Unreasonable
finding that a claim is objectively unreasonable is to be
based on ‘an objective assessment of the merits of the
challenged claims and defenses.'” Exclaim
Mktg., LLC v. DirecTV, LLC, No. 5:11-CV-684-FL, 2015 WL
5725703, at *7 (E.D. N.C. Sept. 30, 2015), aff'd in
part, 674 F. App'x 250 (4th Cir. 2016) (quoting
Old Reliable Wholesale, Inc. v. Cornell Corp., 635
F.3d 539, 544 (Fed. Cir. 2011) (internal quotations
omitted)). Unless an argument or defense is “so
unreasonable that no reasonable litigant could believe it
would succeed, ” such argument or defense cannot be
found to be objectively baseless for purposes of awarding
attorney fees.” Exclaim Mktg., 2015 WL
5725703, at *7 (citations omitted).
careful consideration of the arguments, affirmative defenses
and counterclaims asserted by the Defendant throughout the
course of litigation, the Court cannot conclude that the
Defendant's position was frivolous or objectively
baseless. Notwithstanding the jury's verdict, this was a
close case on the issue of infringement. Both parties filed
motions for summary judgment on various claims and defenses
prior to trial, and both motions were denied. The Court's
denial of the Plaintiff's summary judgment motion
strongly indicates that the defenses asserted by the
Defendant were not frivolous or unreasonable. See,
e.g., LendingTree, LLC v. Zillow, Inc., 54
F.Supp.3d 444, 459 (W.D. N.C. 2014). For all of these
reasons, the Court cannot say that the Defendant was
unreasonable in asserting that its use of the Plaintiff's
mark did not constitute infringement.
Unreasonable Manner of Litigation
party's unreasonable litigation conduct may also warrant
a finding that a case is “exceptional” so as to
warrant an award of attorneys' fees. See Octane
Fitness, 134 S.Ct. at 1757. “Typically, this prong
is satisfied where the non-prevailing party engages in some
form of egregious conduct, ” such as filing false
declarations or attempting to re-litigate issues decided
prior to trial. Exclaim Mktg., 2015 WL 5725703 at
arguing that the Defendant's litigation conduct as a
whole was unreasonable, the Plaintiff relies primarily on the
Defendant's discovery conduct and assertion of
counterclaims. [Doc. 137]. Specifically, Plaintiff contends
that Defendant's broad discovery requests and refusal to
produce an un-redacted copy of a report from Defendant's
trademark attorney were unreasonable. [Id. at 5-6].
careful consideration of the record as a whole, the Court
cannot say that this case was litigated in an unreasonable
manner. The Plaintiff never sought a protective order
regarding the Defendant's discovery requests and the
Defendant based its redactions of the report on the assertion
of attorney-client privilege. Moreover, the Plaintiff's
motion to compel production of an un-redacted version of the
report was denied as untimely. [See Docs. 67, 74].
Further, although Defendant's Chapter 75 counterclaim was
dismissed, its remaining counterclaim survived both a motion
to dismiss and summary judgment. In addition, both parties
vigorously and aggressively contested the issues in this
case. For all of these reasons, the Court cannot say that the
Defendant's litigation conduct was unreasonable.
Compensation or Deterrence
the Court considers whether there is a need, based on the
particular circumstances of this case, “to advance
considerations of compensation and deterrence.”
Octane Fitness, 134 S.Ct. at 1756 n.6 (quoting
Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19
the Court addresses the issue of compensation. While the jury
found that the Defendant willfully infringed the
Plaintiff's mark, the Plaintiff did not seek an award for
damages and there was no evidence that the Plaintiff in fact
suffered anything more than nominal harm as a result of the
infringement. The Plaintiff also presented no evidence of
actual confusion from any member of the purchasing public.
the consideration of deterrence, the Court previously found
that the Defendant pursued reasonable -- albeit ultimately
unsuccessful --affirmative defenses to the Plaintiff's
claim of infringement. This was not a case where the
Defendant persisted in litigation even though its defenses
were clearly lacking. See, e.g., Design Res.,
Inc. v. Leather Indus. of America, No. 1:10CV157, 2016
WL 5477611, at *7 (M.D. N.C. Sept. 29, 2016) (“This
court recognizes the importance of deterring litigants from
pursuing their claims even when the claim has fallen apart
following discovery due to a lack of supporting evidence,
reinforcing this court's decision to award attorney's
fees.”). The Defendant proceeded with a defense that
had a reasonable prospect for success before a jury. The
deterrence factor in this prong is not for the purpose of
deterring the presentation of such reasonable defenses. For
all of these reasons, the Court cannot say there is a need to
advance considerations of compensation and deterrence.
all of these factors, the Court concludes that this case is
not “exceptional” within the meaning of the
Lanham Act, and therefore, the Plaintiff is not entitled to