Exclaim Marketing, LLC v. DIRECTV, LLC

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 5:11-cv-00684-FL. Copies to all parties and the district court. [999995051]. [15-2339, 15-2399]

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 15-2339

EXCLAIM MARKETING, LLC,
Plaintiff - Appellant,
v.
DIRECTV, LLC,
Defendant – Appellee,
and
DIRECTV OPERATIONS, LLC; DIRECTV, INCORPORATED,
Defendants.

No. 15-2399

EXCLAIM MARKETING, LLC,
Plaintiff – Appellee,
v.
DIRECTV, LLC,
Defendant – Appellant,
and
DIRECTV, INCORPORATED; DIRECTV OPERATIONS, LLC,
Defendants.

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Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh.
Louise W. Flanagan,
District Judge. (5:11-cv-00684-FL)

Argued:

October 28, 2016

Decided:

December 29, 2016

Before SHEDD, AGEE, and WYNN, Circuit Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: Joseph H. Nanney, Jr., MEYNARDIE & NANNEY, PLLC,
Raleigh, North Carolina, for Appellant/Cross-Appellee.
Michael
Ernest Williams, QUINN EMANUEL URQUHART & SULLIVAN, LLP, Los
Angeles, California, for Appellee/Cross-Appellant.
ON BRIEF:
Robert C. Van Arnam, WILLIAMS MULLEN, Raleigh, North Carolina,
for Appellee/Cross-Appellant.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
A

jury

awarded

$760,000.00

to

Exclaim

Marketing,

LLC,

(“Exclaim”) on its North Carolina Unfair and Deceptive Trade
Practices Act (“UDTPA”) claim against DirecTV, LLC, (“DirecTV”)
and

$25,000.00

infringement.

to

DirecTV

on

its

counterclaim

for

trademark

Thereafter, the district court granted DirecTV’s

motions for judgment as a matter of law on the UDTPA claim and
for

an

increased

award

of

profits

under

Exclaim appeals both of these judgments.

the

counterclaim.

In addition, DirecTV

has filed a cross-appeal challenging the district court’s denial
of its motion for attorney’s fees.

For the reasons that follow,

we affirm the judgments of the district court in their entirety.

I.
Exclaim is a nationwide marketing company that, in relevant
part, acts as a liaison between potential satellite television
consumers

and

satellite

television

thousands

of

telephone

numbers

retailers.

that

are

It

then

telephone directories under various listings.

purchases

included

in

Often, a single

Exclaim telephone number will be used in multiple listings in
multiple

directories.

When

a

consumer

calls

the

number,

a

telemarketer at a call center asks some screening questions and
then forwards the call to one of its clients, a retailer of
satellite television.

These retailer-clients pay Exclaim for
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each

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forwarded

call,

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regardless

of

whether

the

consumer

eventually purchases satellite television.
The
providers

retailers
of

in

turn

satellite

I),

134

F.

contracted

television

promote” their services.
(Exclaim

have

to

with

“market,

one

or

more

advertise,

and

Exclaim Mktg., LLC v. DirecTV, LLC

Supp.

3d

1011,

1016

(E.D.N.C.

2015).

DirecTV and Dish Network are the leading satellite television
providers in the United States.

DirecTV’s retailer contracts

regulate how its retailers operate and include a restriction
that DirecTV retailers can only contract with a third party –such as Exclaim –- with DirecTV’s written consent.

DirecTV did

not provide written authorization for its retailers to contract
with Exclaim.
Although most of Exclaim’s telephone directory listings are
identified in generic terms such as “satellite television,” some
of its listings used the name “DirecTV” or a close variant such
as

“Direct

TV”

or

“DIRECTTV.”

When

DirecTV

discovered

the

unauthorized use of its name, the company concluded that was a
violation

of

its

trademark.

Accordingly,

DirecTV

hired

an

outside company to investigate who owned the listings by calling
the numbers associated with them.
employees

also

called

some

of

In addition, one of DirecTV’s
the

listings.

At

times,

the

callers would give the intermediary telemarketer a false name as
part of their conversation.

Once DirecTV identified Exclaim as
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the

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owner

listings,

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of

numbers

DirecTV

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tied

contacted

to

these

Exclaim

allegedly

and

asked

infringing

that

coordinate to have the listings removed or renamed.

Exclaim
Exclaim

took steps to remove some of the listings, but over the course
of

several

years

DirecTV

continued

to

identify

unauthorized

listings owned by Exclaim using DirecTV’s name and its variants.
In 2011, Exclaim filed a lawsuit in North Carolina state
court against DirecTV alleging that it had violated the UDTPA,
N.C. Gen. Stat. § 75-1.1 et seq.
jurisdiction,

DirecTV

removed

On the basis of diversity

the

case

to

the

U.S.

District

Court for the Eastern District of North Carolina and filed a
counterclaim against Exclaim alleging trademark infringement, in
violation of the Lanham Act, 15 U.S.C. § 1114. 1
At

trial,

Exclaim

alleged

UDTPA

violations

arising

from

multiple practices, but the jury found that DirecTV only engaged
in

one

of

them.

Specifically,

the

jury

found

that

DirecTV

“telephoned Exclaim Marketing, LLC’s call center over 175 times
over a six year period, at times using false names.”

J.A. 1743.

It further found that this conduct proximately caused injury to
Exclaim and that Exclaim was entitled to damages in the amount
of $760,000.00.
1

Other claims and counterclaims made in the course of the
litigation were dismissed or otherwise resolved and are not at
issue in this appeal.

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On DirecTV’s counterclaim, the jury found that Exclaim used
DirecTV’s

“trademark

or

a

misspelling

of

the

trademark

in

connection with the sale, offering for sale, distribution or
advertising of products or services,” and that it did so “in a
manner likely to cause confusion, mistake, or deception as to
the source, origin, affiliation, approval, or sponsorship” of
Exclaim’s goods or services.

J.A. 1744.

The jury specifically

found that Exclaim’s conduct was “undertaken with the intent to
confuse or deceive” and awarded DirecTV $25,000.00 for trademark
infringement.
The

J.A. 1746.

issues

on

appeal

arise

from

the

district

court’s

rulings on three post-trial motions filed by DirecTV.

First,

DirecTV renewed its motion for judgment as a matter of law on
Exclaim’s

UDTPA

claim,

contending

that

its

support a UDTPA claim as a matter of law.

conduct

did

not

The district court

granted DirecTV’s motion, concluding that the phone calls to
Exclaim

were

not

“in

or

affecting

commerce,”

nor

did

they

constitute an “unfair or deceptive” practice, both of which were
required to state a UDTPA claim.
1020-25.

Exclaim I, 134 F. Supp. 3d at

Second, DirecTV moved for an increased profits award

on its successful trademark infringement claim, contending that
$25,000.00 was inadequate to account for Exclaim’s wrongdoing.
The

district

court

granted

that

motion

as

awarded less than the amount DirecTV sought.
6

well,

though

it

The district court

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awarded DirecTV $610,560.00 based on a calculation of the profit
Exclaim derived from each infringing number over the course of
Exclaim’s
(Exclaim

infringement.
II),

No.

Sept. 30, 2015).

Exclaim

Mktg.,

5:11-CV-684-FL,

2015

LLC
WL

v.

DirecTV,

5725692

LLC

(E.D.N.C.

Third, DirecTV moved for statutory attorney’s

fees in light of its successful trademark infringement verdict.
The district court denied that motion, concluding no award of
attorney’s fees was warranted because this case did not meet the
statutory requirement of being “exceptional.”

Exclaim Mktg.,

LLC v. DirecTV, LLC (Exclaim III), No. 5:11-CV-684-FL, 2015 WL
5725703 (E.D.N.C. Sept. 30, 2015).
Exclaim noted a timely appeal, as did DirecTV.

We have

jurisdiction under 28 U.S.C. § 1291.

II.
This case presents three issues: (1) whether the district
court

erred

in

granting

DirecTV’s

motion

for

judgment

as

a

matter of law on Exclaim’s UDTPA claim; (2) whether the district
court abused its discretion in increasing the jury’s award of
damages from $25,000.00 to $610,560.00 in profits arising from
DirecTV’s

trademark

infringement

claim;

and

(3)

whether

the

district court abused its discretion in denying DirecTV’s motion
for statutory attorney’s fees as the prevailing party in the
trademark infringement claim.

We address each issue in turn.
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A. UDTPA Claim
In order to establish a claim under the UDTPA, Exclaim had
to

demonstrate

the

following

elements:

“(1)

that

[DirecTV]

engaged in conduct that was in or affecting commerce, (2) that
the conduct was unfair or [deceptive], and (3) that [Exclaim]
suffered

actual

injury

as

a

proximate

result

deceptive statement or misrepresentation.”

of

[DirecTV’s]

See ABT Bldg. Prods.

Corp. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 472 F.3d 99,
122 (4th Cir. 2006). 2

The “occurrence of the alleged conduct,

damages, and proximate cause are fact questions for the jury,”
but “whether [such] conduct was unfair or deceptive is a legal
issue for the court,” as is whether the conduct was “in or
affecting commerce.”

Id. at 123; see also S. Atl. Ltd. P’ship

of Tenn., LP v. Riese, 284 F.3d 518, 534 (4th Cir. 2002); Sara
Lee

Corp.

v.

Carter,

519

S.E.2d

308,

311

(N.C.

1999).

Consistent with these standards, the only issues the district
court

submitted

occurrence

of

injury/damages.

to
the

the

jury

on

individual

the

acts,

UDTPA

claim

proximate

were

the

cause,

and

Each of the jury’s findings was left intact by

the district court when it considered the purely legal issues on

2

We have omitted internal quotation marks, alterations, and
citations here and throughout this opinion, unless otherwise
noted.

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liability raised in DirecTV’s renewed motion for judgment as a
matter of law.
Consequently, we review the district court’s decision to
grant the motion for judgment as a matter of law de novo.

Belk,

Inc. v. Meyer Corp., 679 F.3d 146, 164 (4th Cir. 2012) (stating
that questions of law surrounding a motion for judgment as a
matter of law following a jury trial are reviewed de novo while
the

jury’s

factual

findings

deferential standard).

are

reviewed

under

a

more

Similarly, we apply the same de novo

standard in reviewing the district court’s interpretation of the
UDTPA.

Id.

The unfair or deceptive conduct element of a UDTPA claim is
set out in the alternative, meaning that an act can be either
unfair or deceptive to satisfy this requirement.
“unfair”

when

“a

court

of

equity

would

A practice is

consider

[it

to

be]

unfair,” S. Atl. Ltd. P’ship of Tenn., 284 F.3d at 535, i.e.,
“when it offends established public policy as well as when the
practice

is

immoral,

unethical,

oppressive,

unscrupulous,

substantially injurious to consumers,” id. at 536.

or

A practice

is “deceptive” if it “has the capacity or tendency to deceive.”
Id.

Under either category, “only practices that involve some

type of egregious or aggravating circumstances are sufficient to
violate the U[D]TPA.”

Id. at 535.

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Exclaim contends that DirecTV’s practice was unfair because
placing

more

than

175

calls

oppressive, and unscrupulous.”

to

Exclaim

was

Opening Br. 17.

“unethical,

Exclaim posits

that DirecTV did not adequately communicate with it to remedy
the problematic listings and questions why some of the calls
received were tied to generic listings if the sole purpose of
DirecTV’s

calls

was

to

investigate

potential

infringement.

Exclaim further contends that North Carolina recognizes that an
inequitable

assertion

of

power

can

constitute

an

unfair

practice, and it asserts that is what occurred here given that
DirecTV’s size and resources dwarf Exclaim’s.

We disagree.

The district court correctly held that the evidence does
not

demonstrate

that

aggravatingly unfair.
DirecTV’s
period.

placing

DirecTV’s

conduct

was

egregiously

or

As a reminder, the “practice” at issue is

more

than

175

phone

calls

over

a

six-year

Although the calls to Exclaim’s call centers were not

spread out evenly, that frequency represents roughly 2-3 calls
to Exclaim’s call center each month for six years.

Put another

way, it equals roughly 0.002958% of Exclaim’s total volume of
calls.

Exclaim I, 134 F. Supp. 3d at 1023.

It is questionable whether such a “practice” could ever be
considered “unfair” on its own.

Cf. id. (“Without more factual

specificity in the jury’s verdict, it is impossible to glean any
unfairness from the simple fact of the telephone calls.”).
10

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the record eliminates any doubt.
that

Exclaim’s

own

publicly

It is not unfair to Exclaim

available

telephone

DirecTV to call Exclaim’s call centers.

listings

led

This is especially true

given that DirecTV had a legitimate business purpose for placing
those calls due to its investigating who owned the phone numbers
associated with listings it reasonably believed infringed on its
trademark.

Indeed,

the

reasonableness

of

its

investigatory

method was admitted by Exclaim’s co-owner, who testified that if
he did not recognize a listing identified as “Exclaim,” he, too,
would call the number to determine who was associated with it.
As

the

district

court

noted,

“The

numbers

were

available and could have been called by anyone.”
Exclaim

emphasizes,

as

it

did

at

public[]ly

Id.

trial,

that

some

unspecified number of calls DirecTV placed to its call center
were associated with generic listings.
the

case,

practice.”

it

does

The

not

record

render

Even assuming that to be

DirecTV’s

demonstrates

conduct

that

some

an

“unfair

numbers

associated with both generic and infringing listings.

were

Moreover,

at the time DirecTV called a listing, it had no way of knowing
that Exclaim owned the associated phone number, so there is no
evidence

that

particular

DirecTV

listing,

was

whether

targeting
it

was

Exclaim

generic

or

by

calling

not.

any

Lastly,

DirecTV’s employee testified that she would occasionally call
generic

listings

for

business
11

reasons

unrelated

to

the

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investigation, such as to identify a retailer’s ad that she did
not recognize in order to determine whether the retailer was in
compliance with the retailer’s contract.

On this record, that

some unspecified number of phone calls may have been placed to
numbers linked solely to generic listings does not undermine the
conclusion that DirecTV’s investigative effort of placing more
than 175 calls to Exclaim’s call center over a six-year period
was

not

an

unfair

practice,

let

alone

an

egregious

or

aggravating one.
Exclaim’s
communication

argument
to

about

resolve

the

DirecTV’s

allegedly

inadequate

infringing

listings

misdirects

attention from the salient inquiry -- whether placing the phone
calls was an unfair practice.

Again, until DirecTV placed the

phone calls, it could not tie Exclaim to any specific infringing
number because Exclaim was not identified on the listing.

The

parties’ communications after a specific number had been tied to
Exclaim are immaterial to whether the practice of placing calls
in the first instance was unfair.

More problematic for Exclaim,

however,

is

even

certain

directories,

that

for

years
DirecTV

listings tied to Exclaim.

and

after

continued

to

republication
find

of

infringing

And so long as the problem remained,

DirecTV acted fairly in calling those numbers to determine who
owned them.

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While an inequitable assertion of power may be part of the
unfair-practice analysis in some cases, it is not at issue here.
The fact of a size disparity between companies, without more, is
not sufficient to demonstrate an unfair practice; rather, courts
examine

what

disparity

the

to

actor

conclude

did

in

that

the

assertion of power was unfair.

combination
exertion

with

of

an

that

size

inequitable

See, e.g., S. Atl. Ltd. P’ship

of Tenn., 284 F.3d at 540 (observing that “manipulations and
assertions

of

controlling

influence”

such

as

exploiting

contractual rights without providing compensation is “precisely
the

kind

of

‘inequitable

assertion[]’

unfair trade practice under the UDTPA).

of

power”

that

is

an

DirecTV may be a larger

business than Exclaim, but nothing in the record indicates that
this

disparity

enabled

complains were unfair.

or

contributed

to

the

acts

Exclaim

As the district court concluded, “[n]o

superior degree of power or advantageous market position was
leveraged” when DirecTV called publicly available phone numbers
to determine who owned them.

Exclaim I, 134 F. Supp. 3d at

1023.
The telephone calls also were not a “deceptive practice”
for

UDTPA

purposes.

Yet

again,

there

is

nothing

inherently

deceptive about the jury’s factual finding that DirecTV placed
the calls.

Cf. id. at 1024 (“[T]he fact of the calls involve[d]

no deception.”).

But even accepting that the premise of being a
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potential consumer or the use of a false name was “deceptive,”
the

record

demonstrates

aggravatingly

that

deceptive.

it

The

was

not

DirecTV

egregiously

employee

at

or

issue

testified based on her past personal experience that she was
often stonewalled in her efforts to identify the owner of the
phone numbers she called.

In particular, when she used her real

name to place calls, telemarketers would be uncooperative or
would be instructed to hang up when recognizing her name from
past

calls.

intrinsically

DirecTV’s
linked

to

use
--

of
and

the
an

false

name

effective

investigating the source of infringing listings.
did

not

constitute

an

egregiously

or

was

means

thus
of

--

As such, it

aggravatingly

deceptive

practice.
For

these

reasons,

the

district

court

did

not

err

in

concluding that DirecTV’s placing more than 175 calls over a
six-year period could not, as a matter of law, constitute an
unfair or deceptive trade practice under the UDTPA.

As such,

DirecTV was entitled to judgment as a matter of law regardless
of

the

jury’s

findings

with

respect

to

other

elements

of

Exclaim’s claim. 3

3

In light of this holding, we need not address the parties’
arguments concerning the district court’s additional grounds for
granting DirecTV’s motion, that the phone calls were not “in or
affecting commerce.”

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B. Trademark Infringement Counterclaim
Exclaim

separately

contends

the

district

court

erred

in

granting DirecTV’s post-judgment motion for increased profits on
its trademark infringement claim.

To establish such a claim,

the Lanham Act provides that a plaintiff –- such as DirecTV –who

establishes

a

violation

of

§

1114(1)(a)

is

entitled

“to

recover (1) defendant’s profits, (2) any damages sustained by
the plaintiff, and (3) the costs of the action.”
1117(a)

(emphasis

added).

The

pertinent

15 U.S.C. §

statute

further

provides:
In assessing profits the plaintiff shall be required
to prove defendant’s sales only; defendant must prove
all elements of cost or deduction claimed. . . . If
the court shall find that the amount of the recovery
based on profits is either inadequate or excessive the
court may in its discretion enter judgment for such
sum as the court shall find to be just, according to
the circumstances of the case.
Such sum . . . shall
constitute compensation and not a penalty.
Id.
This

Court

has

previously

recognized

that

the

statute

“gives little guidance on the equitable principles to be applied
by a court in making an award,” and has “identified six factors
to guide the process” of “weigh[ing] the equities of the dispute
and

exercis[ing]

its

discretion

on

whether

appropriate and, if so, the amount thereof.”

an

award

Synergistic Int’l,

LLC v. Korman, 470 F.3d 162, 174-76 (4th Cir. 2006).
factors

are:

“(1)

whether

the
15

defendant

is

had

the

Those

intent

to

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confuse or deceive, (2) whether sales have been diverted, (3)
the adequacy of other remedies, (4) any unreasonable delay by
the plaintiff in asserting his rights, (5) the public interest
in making the misconduct unprofitable, and (6) whether it is a
case of palming off.”

Id. at 175.

The district court granted DirecTV’s motion based on its
conclusion that the jury’s award of $25,000.00 was insufficient
in light of the infringement at issue.
burden-shifting

analysis,

the

district

Under the statutory
court

observed

that

DirecTV satisfied its burden of proving Exclaim’s total profits,
thereby

shifting

to

Exclaim

the

burden

of

parsing

profits that were unrelated to the infringement.

out

its

Based on the

quite limited evidence put forward by Exclaim on that point, the
district court concluded it had failed to meet its burden to
distinguish between profits attributable to infringement and any
others. 4

Nonetheless, the court concluded that “[i]t would be

inequitable to award DirecTV the entirety of Exclaim’s profits
over

the

relevant

period”

because

4

while

Exclaim

owned

6,000

In its reply brief, Exclaim argues DirecTV did not satisfy
this burden because it demonstrated total profits, while the
statute should be interpreted to require a plaintiff to show
profits relating to the infringing activity.
Because that
argument is raised for the first time in the reply brief, we do
not consider it.
See Cavallo v. Star Enter., 100 F.3d 1150,
1152 n.2 (4th Cir. 1996) (holding that "an issue first argued in
a reply brief is not properly before a court of appeals").

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telephone numbers, only 159 were associated with an infringing
listing.

Exclaim II, 2015 WL 5725692, at *4.

Instead, the

court multiplied the 159 listings by the record evidence as to
the “average profit per month per phone number” (between $75.00
and $80.00 per telephone number) over the entire period during
which Exclaim was infringing DirecTV’s trademark.
that

calculation

method,

the

court

also

district

court

Id.

awarded

Under
DirecTV

$610,560.00.
The

district

profits

award

was

appropriate

Synergistic factors.
conduct

was

noted

willful,

such

an

increased

light

in

that

of

the

relevant

In particular, it found that Exclaim’s
that

injunctive

relief

did

“not

remedy

Exclaim’s usurpation of the good will associated with DirecTV’s
mark

for

the

reasonable

period

considering

at

issue,”
the

that

period

DirecTV’s

of

delay

investigation

was
and

reconciliation, and that the jury’s award had not been adequate
to make future infringement unprofitable.

Id.

The Court reviews the district court’s decision to increase
an award of profits for an abuse of discretion.

Pac. Ins. Co.

v. Am. Nat’l Fire Ins. Co., 148 F.3d 396, 402 (4th Cir. 1998)
(citing Fed. R. Civ. P. 59(e)).
Exclaim contends the district court abused its discretion
because the record shows DirecTV suffered no harm from Exclaim’s
conduct

and,

in

fact,

profited
17

because

many

of

Exclaim’s

Appeal: 15-2339

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referrals

Filed: 12/29/2016

to

retailers

Pg: 18 of 26

resulted

in

new

DirecTV

customers.

Exclaim asserts that the Synergistic factors do not support the
increased award of profits because Exclaim did not act in bad
faith,

it

did

DirecTV’s
there

mark

is

points

not

no

to

divert

adequately

evidence
DirecTV’s

approximately

sales,

four

of

protects
palming

delay
years

infringing listings.

an

injunction
DirecTV’s

off.

in

In

filing

from

against

when

interests,

addition,

suit,
it

using

a

first

and

Exclaim

period

of

learned

of

Lastly, Exclaim argues that anything more

than the jury’s nominal damages award constitutes a windfall and
unlawfully punishes Exclaim rather than compensates DirecTV.
We conclude the district court did not abuse its discretion
in granting DirecTV’s motion for increased profits.

Many of

Exclaim’s arguments ignore the purpose of prohibiting trademark
infringement and the Lanham Act’s plain language, which allows
prevailing

plaintiffs

to

recover

not

just

an

amount

they

suffered in actual damages, but also a share of the defendants’
profits from the infringement.
district

court

has

broad

Cf. 15 U.S.C. § 1117(a).

discretion

to

order to achieve an equitable result.

award

such

relief

The
in

E.g., Burndy Corp. v.

Teledyne Indus., 748 F.2d 767, 772 (2d Cir. 1984).
Here, the district court did not abuse its discretion in
concluding

that

profits award.

the

Synergistic

factors

favored

an

increased

For example, the jury specifically found that
18

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Exclaim

Filed: 12/29/2016

intended

to

confuse

DirecTV’s trademark.
a

defendant’s

or

deceive

consumers

by

using

See Synergistic, 470 F.3d at 175 (stating

“intent

profits award).

Pg: 19 of 26

to

confuse

or

deceive”

can

support

a

In addition, an injunction did not provide any

relief for Exclaim’s past wrongdoing and would also be unlikely
to

adequately

deter

future

Exclaim’s

past

Exclaim.

Cf. id. at 176.

rejected

Exclaim’s

filing

suit

profits.
an

misconduct

and

its

given

proven

the

scope

profitability

of
for

The district court also reasonably
that

should

DirecTV

not

be

unreasonably

entitled

to

delayed

increased

In so doing, the court observed that DirecTV undertook

extensive

without

and

argument
thus

misconduct

investigation,

litigation,

directories

to

be

and

attempted

had

released

infringement continued.

to
in

Cf. id.

to

resolve

wait

order

for
to

the

new

matter

telephone

determine

whether

The district court thus not

only relied on the proper analysis for determining whether to
award increased profits, but also did not abuse its discretion
in

weighing

the

relevant

circumstances

increased profits were appropriate.

and

concluding

that

Cf. id.

In addition to challenging any increase from the jury’s
award for Exclaim’s infringement, Exclaim also argues that the
record does not support the district court’s decision to award
profits in the amount of $610,560.00.
presented

at

trial

did

not

show
19

It contends the evidence
that

Exclaim

owned

159

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Filed: 12/29/2016

Pg: 20 of 26

infringing phone numbers, but only nine numbers, and that the
district court relied on evidence that was not in the record to
reach the

higher

number.

In

addition,

Exclaim

contends

the

record does not show that it owned all of those numbers for the
entire period of time used to calculate the profits award.

As

such, Exclaim maintains that any increased profits award should
be substantially reduced.
We have reviewed the record and conclude that no reversible
error

occurred.

support

the

Three

district

exhibits
court’s

that

were

attribution

admitted
of

159

at

trial

infringing

numbers to Exclaim: an email in which Exclaim admitted to owning
twenty-nine
DirecTV’s

unique
agent

infringing
prepared

numbers

compiling

and

two

the

spreadsheets

results

of

its

investigation, in which an additional 130 unique numbers were
linked

to

Exclaim.

It

does

appear

that

not

all

of

these

telephone numbers were traced to infringing listings for the
entire

period

for

which

the

district

court

awarded

profits.

Nonetheless, we conclude that the district court did not err in
arriving at its final profits award.
As already noted, the statute authorizes the district court
to

exercise

broad

appropriate award.
that

Exclaim

profits

bore

should

be

equitable

discretion

in

arriving

at

an

Coupled with this discretion is the fact
the

burden

excluded

of

from
20

showing
an

why

award,

certain

yet

it

of

failed

its
to

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present

Doc: 47

Filed: 12/29/2016

relevant

considering
satisfied

an
its

evidence

for

appropriate
statutory

Pg: 21 of 26

the

district

profits

burden

court

award.

of

to

Once

demonstrating

use

in

DirecTV
Exclaim’s

profits for the relevant period of time, the burden shifted to
Exclaim to show what amount of profits were not related to its
infringement.

See 15 U.S.C. § 1117(a).

attempt to meet that burden.

Here, Exclaim made no

Despite Exclaim’s failure on this

point, the district court went out of its way to fashion a more
equitable result for both parties based on Exclaim’s average
profit

per

month

per

phone

number.

Its

calculation

was

a

reasonable estimation of the profits Exclaim unjustly received,
and any minor variation in the precise number of lines per month
does not make the district court’s award an abuse of discretion.
Indeed,

the

district

court

indicated

that

Exclaim’s

profits

relating to the infringing lines might have been even higher.
Exclaim II, 2015 WL 5725692, at *4 (“[DirecTV] is entitled to
Exclaim’s

profits

(emphasis added)).

at

least

in

the

amount

of

$610,560.00.”

Given these circumstances, greater precision

in arriving at the exact award amount was not required.

See,

e.g., Banjo Buddies, Inc. v. Renosky, 399 F.3d 168, 177-78 (3d
Cir. 2005) (approving the district court’s attempt to estimate
profits where it was not clear what share came from the wrongful
conduct

versus

other

legitimate

business

conduct

because

calculation arrived at an appropriate ballpark figure).
21

the

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Filed: 12/29/2016

Pg: 22 of 26

C. Attorney’s Fees Cross-Appeal
We next turn to DirecTV’s cross-appeal, in which it argues
the district court erred in denying its motion for attorney’s
fees.

The

“reasonable

Lanham

Act

attorney

fees

“exceptional cases.”
contends

that

authorizes
to

a
the

district

prevailing

15 U.S.C. § 1117(a).

this

case

meets

that

court

to

award

party”

in

In sum, DirecTV

“exceptional”

standard

because the jury specifically found that Exclaim “acted with
‘the intent to confuse or deceive.’”

Response/Opening Br. 60.

We review the district court’s decision on the award of
Lanham Act attorney’s fees for an abuse of discretion.

Newport

News Holdings Corp. v. Virtual City Vision, Inc., 650 F.3d 423,
441 (4th Cir. 2011).

That review leads us to conclude the

district court properly applied the exceptional case analysis
set out in Octane Fitness, LLC v. ICON Health & Fitness, Inc.,
134 S. Ct. 1749 (2014), and expounded upon by this Court in
Georgia-Pacific Consumer Prods. LP v. von Drehle Corp., 781 F.3d
710 (4th Cir. 2015).
In Octane Fitness, the Supreme Court analyzed the same fee
award standard applicable here albeit under the Patent Act.
S.

Ct.

at

1752.

The

Supreme

meaning

of

“exceptional”

Court

indicated

held

that

that

fees

the

should

134

ordinary
only

be

awarded in a case “that stands out from others with respect to
the

substantive

strength

of

a
22

party’s

litigating

position

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Pg: 23 of 26

(considering both the governing law and the facts of the case)
or

the

unreasonable

Factors

to

objective

be

manner

considered

unreasonableness

in

which

include
(both

the

case

was

“frivolousness,
in

the

factual

litigate.”
motivation,
and

legal

components of the case) and the need in particular circumstances
to advance considerations of compensation and deterrence.”
at 1756 & n.6.
district

Id.

Furthermore, the Supreme Court indicated that

courts

should

“determine

whether

a

case

is

‘exceptional’ in the case-by-case exercise of their discretion,
considering the totality of the circumstances.”

Id. at 1756.

This Court applied the Octane Fitness principles to a fee
award

under

§

1117(a)

of

the

Lanham

Act

in

Georgia-Pacific.

There, the Court took care to distinguish that the “exceptional”
case required more than just volitional conduct, else “every
Lanham

Act

defendant

case
could

would
show

qualify
that

it

as

‘exceptional’

unintentionally

or

unless

the

mistakenly

performed the actions later found to be a violation of the Act.”
781 F.3d at 720.

Instead, following Octane Fitness, the Court

set out three circumstances when, “in light of the totality of
the circumstances,” a case may be deemed “exceptional” such that
an award of fees is appropriate.

Those circumstances are:

(1) there is an unusual discrepancy in the merits of
the positions taken by the parties, based on the nonprevailing party’s position as either frivolous or
objectively unreasonable; (2) the non-prevailing party
has litigated the case in an unreasonable manner; or
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Pg: 24 of 26

(3) there is otherwise the
circumstances
to
advance
compensation and deterrence.

need in particular
considerations
of

Id. at 721.
Relying on Octane Fitness and Georgia-Pacific, the district
court concluded this case was not “exceptional.”
2015

WL

position

5725703,
was

at

*6-*8.

neither

First,

frivolous

nor

it

found

Exclaim III,
that

objectively

Exclaim’s

unreasonable,

particularly in light of the competing legal arguments and facts
presented

at

trial.

Second,

it

found

Exclaim

did

not

unreasonably litigate the case, pointing out as an example that
Exclaim did not re-litigate issues previously decided.

Lastly,

the court found that the increased profits award had adequately
compensated DirecTV and that a fee award was not needed for
deterrence.
The
holding.

district

court

did

not

abuse

its

discretion

in

so

Indeed, DirecTV does not take issue with any of the

district court’s findings, nor does it otherwise engage with the
analysis

set

out

in

Octane

Fitness

and

Georgia-Pacific.

Instead, it argues that the district court should not have used
that

analysis

and

should

have

relied

on

pre-Octane

Fitness

Fourth Circuit case law stating that fees may be awarded where a
defendant

willfully

infringes

a

plaintiff’s

Georgia-Pacific, 781 F.3d at 719-20.

trademark.

See

But in Georgia-Pacific, we

recognized that Octane Fitness modified our prior analysis and
24

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“appl[ied]

Filed: 12/29/2016

the

Octane

Fitness

Pg: 25 of 26

standard

when

award of attorneys fees under § 1117(a).”

considering

Id. at 721.

the

In doing

so, we set out the three-part test the district court used in
deciding whether to award fees in this case.
Contrary

to

DirecTV’s

contention,

Id. at 719-21.

nothing

in

either

of

those cases suggests that the Octane Fitness analysis should not
also

apply

when

a

infringement claim.

plaintiff

successfully

prosecutes

an

While the factual background for Octane

Fitness may have been a prevailing defendant, nothing limits the
overarching objectives identified by the Supreme Court to that
context.

Common sense confirms that both parties are equally

capable

of

taking

unreasonable

positions

or

litigation

strategies, just as the particular facts of a case decided in
either

party’s

favor

While

willfulness

may

warrant

remains

part

compensation
of

the

or

deterrence.

totality

of

the

circumstances informing the analysis, after Octane Fitness and
Georgia-Pacific, it does not end there as DirecTV would have us
hold.

In

short,

even

assuming

Exclaim’s

infringement

was

willful, that is no longer sufficient to show that a case is
“exceptional.”
The district court understood and applied the proper test
in determining that this case does not satisfy the applicable
standard.
basis

for

Inasmuch as DirecTV does not otherwise challenge the
the

district

court’s
25

denial

of

its

motion,

the

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Filed: 12/29/2016

Pg: 26 of 26

district court did not abuse its discretion in denying DirecTV’s
motion for attorney’s fees.

III.
For

the

aforementioned

reasons,

the

judgments

of

the

district court are
AFFIRMED.

26