Attorney's Fees

July 21, 2022

Thrivent Sues for Alleged Trademark Infringement

Indianapolis, Indiana – The Plaintiff, Thrivent Financial for Lutherans (“Thrivent”), is a fraternal benefits society established in 1902 with over 2 million members and over $100 billion in assets under management or advisement. Thrivent and its licensees offer a wide variety of services and products to their members and customers under the THRIVENT Trademarks (listed below), including insurance and annuity products, financial and business advising, mutual funds and investments, individual retirement accounts, trust accounts, financial advisory services, banking and credit union services, lending services, and debit and credit card services.

July 19, 2021

Seventh Circuit Affirms Denial of Fees for Trademark Infringement Case

By Overhauser Law Offices, LLC

Chicago, Illinois – Chicago is apparently home to two hotels named “Hotel Chicago.” The first, owned by plaintiff/appellee, LHO Chicago River, LLC (“LHO”) was allegedly named in 2014. The second hotel, owned by defendants/appellants Rosemoor Suites, LLC, Portfolio Hotel & Resorts, LLC and Chicago Hotel, LLC (collectively “Rosemoor”), was apparently renamed to “Hotel Chicago” in 2016. LHO filed suit for trademark infringement and unfair competition under the Lanham Act, deceptive advertising, and common-law trademark infringement under Illinois law.

The district court found that LHO failed “to show that it is likely to succeed in proving secondary meaning” of the alleged mark “Hotel Chicago” and thus denied preliminary injunctive relief. While LHO appealed this ruling, it moved to voluntarily dismiss its claims with prejudice prior to briefing.

After the case was dismissed, Rosemoor filed a motion requesting more than half a million dollars in attorney fees, claiming the case was “exceptional.” This request was denied by the district court. On appeal, the Seventh Circuit held that the district court did not use the proper standard of Octane Fitness to deny the request and remanded. On remand, Rosemoor filed a renewed request for fees including an extra $130,000 on top of the original fee request. However, even after applying the Octane Fitness standard, the district court still denied the fee request. The Seventh Circuit affirmed finding the district court “considered the evidence under the Octane Fitness framework and reasonably determined that this case did not qualify as exceptional.”

Practice Tip: Under Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 at n.7. (2014), a district court must consider the totality of the circumstances by simply weighing non-exclusive factors such as “frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.”

June 23, 2021

Copyright Alternative in Small-Claims Enforcement (CASE) Act Enacted by Congress

By Overhauser Law Offices, LLC

USA – The Copyright Alternative in Small-Clams Enforcement (CASE) Act was enacted on December 27, 2020. This creates a Copyright Claims Board consisting of three officers chosen by the Librarian of Congress and the Register of Copyrights. The officers will act as arbitrators for civil copyright claims and counterclaims capped at $30,000 in damages for declaratory judgment of non-infringement or for notices under the Digital Millennium Copyright Act. The Board is expected to be operational by December 27, 2021.

Parties may affirmatively opt out of adjudication before the board within 60 days of service. Failure to do so will serve as consent to the proceeding before the Board and will waive the right to a jury trial.

The proceedings before the Board are also less formal. While parties can conduct written discovery, they may not conduct depositions under the CASE Act. Further, unlike federal district courts, attorneys’ fees are not generally awardable to prevailing parties.

November 2, 2020

Seventh Circuit Confirms Presumptive Fees in Copyright Litigation are Not Guaranteed

By Overhauser Law Offices, LLC

Seventh Circuit Court of Appeals – The U.S. Court of Appeals for the Seventh Circuit affirmed the denial of fees for the Defendant, David Knott (“Knott”), after Plaintiff, Timothy B. O’Brien LLC (“Apple Wellness”), voluntarily dismissed all its claims with prejudice.

Originally filed in the Western District of Wisconsin, Apple Wellness alleged that Knott, a former employee of Apple Wellness started a similar, competing wellness shop. Apple Wellness sued Knott for alleged trademark, trade dress, and copyright infringement. Knott countersued for tortious interference and retaliation. The District Court found the copyright claims baseless and denied a preliminary injunction on the trademark and trade dress claims. Apple Wellness later voluntarily dismissed all its claims.

While Apple Wellness submitted a motion to dismiss without prejudice, the District Court ordered Apple Wellness to withdraw its motion or accept a dismissal with prejudice because Knott had already expended resources litigating an injunction. The District Court further noted that in its opinion, no party’s claim was strong. Apple agreed to the dismissal with prejudice and the District Court declined to exercise supplemental jurisdiction over the counterclaims. The District Court subsequently denied Knott’s motion for fees leading to this appeal only as to the fees for the copyright claims and the appeal.

The Court of Appeals found that while Apple Wellness’s copyright claims were frivolous, it appears the claims were brought in good faith. Therefore, “there were minimal concerns regarding compensation and deterrence.” Further, Knott did not have to expend a large amount of time, money, or energy defending against the copyright claims as they were quickly dismissed. After considering all of the factors, the Court of Appeals affirmed the judgment of the District Court denying Knott’s motion for fees.

March 26, 2020

Motion to Disqualify: Patent Law Firm Tries to Cap Bottle Cap Suit

By Overhauser Law Offices, LLC

This suit is over the design of two bottle caps.

Plaintiff, Closure, claims it designed the bottle cap on the left, and Defendant, Novembal, got a patent on the bottle cap on the right. But Closure claims that it, not Novembal is the actual “inventor” of the bottle cap design. Perhaps fearing that Novembal was about to file suit, Closure in its home turf of New Jersey and trying to gain a home court advantage, took the initiative and sued Novembal in Indiana. Its Complaint sought to “correct the inventorship” of Novembal’s patent and to prevent Novembal from enforcing the patent against Closure. That suit is reported here: Closure Systems International Sues Novembal USA Seeking Correction of Inventorship. Not surpisingly, Novembal asserted a counterclaim for patent infringement.

The twist is that in the infringement counterclaim, Novembal seeks a broad injunction. So broad, that it would prevent not just Closure, but some of Closure’s customers from infringing the patent. In its counterclaim, Novembal seeks:

A permanent injunction enjoining CSI and its employees, agents, successors, partners, officers, directors, owners, shareholders, principals, subsidiaries, related companies, affiliates, distributors, dealers, and all persons in active concert or participation with any of them . . . from making, importing, promoting, offering, or exposing for sale, or selling the CSI Production Closures, or any other closures with designs confusingly similar to the claimed design of Novembal’s ‘442 patent.

One company that apparently gets its bottle caps from Closure is Nestle, one of the biggest sellers of bottled water. So far, no big deal. Except, Nestle is represented by the blue chip Washington DC patent law firm, Finnegan, Henderson, Farabow, Garrett & Dunner. Finnegan happens to be the same law firm that represents Novembal in the suit with Closure. So Finnegan is attempting to get an injunction for one client (Novembal) that would apply to another client, Nestle. Continue reading

March 4, 2020

Patent Litigation:

By Overhauser Law Offices, LLC

The Supreme Court of the United States has issued an Opinion affirming the decision of the United States Court of Appeals for the Federal Circuit in the case of Laura Peter, Director of the United States Patent and Trademark Office, versus NantKwest, Inc. (“NantKwest”).

Following an adverse decision by the USPTO, an applicant may either appeal directly to the Federal Circuit, 35 U.S.C. § 141, or may file a new civil action against the USPTO Director in the United States District Court for the Eastern District of Virginia, 35 U.S.C. § 145. In this case, NantKwest filed a new civil action in the District Court. Under § 145, the applicant is required to pay “[a]ll the expenses of the proceedings.”

The District Court granted summary judgment for the USPTO affirming the denial of NantKwest’s patent application. The Federal Circuit then affirmed the decision of the District Court. Following this affirmation, the USPTO moved for the reimbursement of its expenses, “including the pro rata salaries of PTO attorneys and a paralegal who worked on the case.” The District Court denied the motion finding “that the statutory language referencing expenses was not sufficient to rebut the ‘American Rule’ presumption that parties are responsible for their own attorney’s fees.” That decision was affirmed by the en banc Federal Circuit.

January 13, 2020

Trademark Law: United States Court of Appeals for the Seventh Circuit Affirms Award of Over $17.3 Million

By Overhauser Law Offices, LLC

The United States Court of Appeals for the Seventh Circuit issued an opinion reversing the denial of attorney’s fees, remanding for an entry of a reasonable fee reward under 15 U.S.C. § 1117(a), and affirming all other aspects of the judgment of the district court in the case of 4SEMO.com Incorporated (“4SEMO”) versus Southern Illinois Storm Shelters, Inc. (“SISS”), et al. (collectively “Defendants”). While the Defendants originally sued 4SEMO in this case, the case was reconfigured as above for the July 2017 bench trial and decision, which was on appeal.

According to the opinion, 4SEMO began selling storm shelters manufactured by SISS in 2005. 4SEMO is a Missouri-based home-remodeling firm while Robert Ingoldsby and his brother Scott (the “Ingoldsbys”) run the Illinois based company, SISS. 4SEMO began marketing the storm shelters under a wordmark “Life Saver Storm Shelters” and a matching logo (the “Marks”) that it affixed to the shelters it sold in Missouri and Arkansas pursuant to an exclusive dealership agreement with SISS. The Ingoldsbys were granted a limited license to use the 4SEMO Marks for shelters marketed in southern Illinois. However, the Ingoldsbys violated the limited license by using the 4SEMO Marks on shelters sold throughout the country.

SISS sued 4SEMO for trademark infringement over the “Life Saver” wordmark, claiming they had used it prior to 4SEMO and that they had ownership of the wordmark. 4SEMO counterclaimed for trademark infringement and false endorsement, along with various state-law claims. After SISS’s claim did not survive summary judgement, 4SEMO’s counterclaims were tried to the bench and the district court found in favor of 4SEMO on all counts and awarded $17,371,003 in damages for profit disgorgement and $26,940 for breach of contract. However, 4SEMO’s motion for vexatious-litigation sanctions and attorney’s fees under 28 U.S.C. § 1927 and the Lanham Act, respectively, was denied.

December 27, 2019

Indiana Copyright Litigation: German Photographer Sues Toolfarm.com for Alleged Copyright Infringement

By Overhauser Law Offices, LLC

Attorneys for Plaintiff, Marco Verch (“Verch”) of Germany, filed suit in the Northern District of Indiana alleging that Defendant, Toolfarm.com, Inc. (“Toolfarm”) of South Bend, Indiana, infringed his rights in United States Copyright Registration No. VA 2-106-766. Verch is seeking actual damages, profits, income, receipts, or other benefits received by Toolfarm, costs, expenses, attorneys’ fees, and pre-judgment interest.

According to the complaint, Verch is a professional photographer claiming Toolfarm has reproduced and publicly displayed his copyrighted photograph of traditional Russian wooden dolls (the “Photograph”). Verch claims Toolfarm ran the Photograph on its website without a license, permission, or consent from Verch. As such, Verch is seeking damages for copyright infringement pursuant to 17 U.S.C. §§ 106, 501, and 504.

This case was filed by Verch’s attorney, Mr. Leibowitz, just six days after he was ordered to personally pay $28,567.50 to a defendant in another case. In that case, Mr. Leibowitz was found to have engaged in discovery misconduct by failing to identify witnesses as required by Rule 26. The court stated that Mr. Leibowitz was:

more focused on the business of litigation than on selling a product or service or licensing their copyrights to third parties to sell a product or service. A copyright troll plays a numbers game in which it targets hundreds or thousands of defendants seeking quick settlements priced just low enough that it is less expensive for the defendant to pay the troll rather than defend the claim.

The Court then ordered his client to post a $50,000 bond to continue with the case. When his client failed to do so, the court dismissed the case.

December 23, 2019

Trademark Litigation: Seventh Circuit Adopts New Standard for Lanham Act’s Fee-Shifting Provision

By Overhauser Law Offices, LLC

LHO Chicago River, LLC (“LHO”) filed a trademark infringement suit against Joseph J. Perillo, Rosemoor Suites, LLC, and Portfolio Hotels & Resorts, LLC (collectively the “Defendants”) in the Northern District of Illinois, Eastern District. The case was voluntarily dismissed by LHO and after being denied their Lanham Act attorney fees, the Defendants appealed to the United States Court of Appeals for the Seventh Circuit. The Court of Appeals held the Supreme Court’s decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014), which was a patent case, should guide district courts when facing attorney fee applications under the Lanham Act.

LHO’s upscale hotel in downtown Chicago underwent a branding change to become “Hotel Chicago” in February 2014. Just over two years later, the Defendants opened their own “Hotel Chicago” about three miles from LHO’s hotel. LHO then sued “for trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. § 1125(a), and for trademark infringement and deceptive trade practices under Illinois state law.” After litigating for over one year, LHO moved to voluntarily dismiss its claims and the judgment was entered on February 21, 2018.

After judgment was entered, pursuant to 15 U.S.C. § 1117(a), Defendants made a post-judgment request for attorney fees. In their brief, the Defendants cited two different standards for determining if attorney fees should be granted: (1) the Seventh Circuit’s prevailing standard, “that a case is exceptional under § 1117(a) if the decision to bring the claim constitutes an ‘abuse of process’; and (2) the more relaxed totality-of-the-circumstances approach under the Patent Act” from the Octane case. The district judge acknowledged Octane in his findings but did not adopt that approach and denied Defendants request for attorney fees.

October 30, 2019

Indiana Copyright Litigation: Prevailing Plaintiff Ordered to Pay Losing Defendant’s Costs After Rejecting Rule 68 Offer

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Judge Richard L. Young of the Southern District of Indiana issued a decision on cross-motions for attorneys’ fees and costs in the case of Richard N. Bell (“Bell”) versus Michael Maloney (“Maloney”). The Court first entered judgment in favor of Bell on June 11, 2019 granting him $200 in statutory damages, and costs. Bell sought $33,536,25 in attorney’s fees and $4,719.80 in costs. Maloney made a cross-motion “for leave to file a Bill of Costs totaling $2,183.77 and to enforce the Rule 68 offer. The Court found that the Rule 68 offer should be enforced and Maloney is entitled to the costs he incurred after the offer was rejected.

Bell sent a demand letter to Maloney for $5,000.00 prior to filing this suit. After Bell filed suit, Maloney filed his Answer and then sent Bell an Offer of Judgment pursuant to FRCP 68. This offer was for $2,500.00 for Bell to take judgment against Maloney and would include all attorney’s fees and costs. Bell denied the Rule 68 offer and after the denial of cross-motions for summary judgment, the case went to a bench trial. After the one-day bench trial, the Court found Bell was the prevailing party and was entitled to $200 in statutory damages. Bell filed his motion for fees and costs eleven months after the bench trial occurred.

FRCP 68 provides in part, “[i]f the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.” The court in Payne v. Milwaukee Cty., 288 F.3d 1021, 1024 (7^th Cir. 2002), found that “Rule 68 is designed to provide a disincentive for plaintiffs from continuing to litigate a case after being presented with a reasonable offer.” In determining if a final judgment obtained is less favorable than a Rule 68 offer, “the attorney’s fees and costs that accrued before the offer must be added to the judgment.” Lawrence v. City of Philadelphia, 700 F.Supp. 832, 836 (E.D. PA. 1988).