Servpro Industries Incorporated et al v. Zerorez of Phoenix LLC et al

Filing 128

ORDER denying 116 Motion for Attorneys' Fees and Related Non-Taxable Expenses. Signed by Senior Judge Roslyn O Silver on 1/29/19. (CLB)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Servpro Industries Incorporated, et al.,

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Plaintiffs,

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ORDER

v.

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No. CV-17-00862-PHX-ROS

Zerorez of Phoenix LLC, et al.,

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Defendants.

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Defendants seek an award of attorneys’ fees and non-taxable expenses under 15

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U.S.C. § 1117(a). That statute allows for an award of fees “in exceptional cases.” The

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Ninth Circuit has held this statutory language refers to any case “that stands out from others

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with respect to the substantive strength of a party’s litigating position (considering both the

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governing law and the facts of the case) or the unreasonable manner in which the case was

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litigated.” SunEarth, Inc. v. Sun Earth Solar Power Co., 839 F.3d 1179, 1180 (9th Cir.

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2016). This requires a court “examine the totality of the circumstances,” including matters

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such as “frivolousness, motivation, objective unreasonableness (both in the factual and

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legal components of the case) and the need in particular circumstances to advance

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considerations of compensation and deterrence.” Id. at 1181. A review of all the

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circumstances of this case establishes an award of fees is not appropriate.

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Plaintiff’s trademark infringement claims required application of the Ninth Circuit’s

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eight-factor test for determining the likelihood of consumer confusion. (Doc. 111 at 6).

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That eight-factor test provides a general framework but the proper weight of each factor

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depends on the other circumstances of the case. See Brookfield Comm’ns, Inc. v. W. Coast

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Entm’t Corp., 174 F.3d 1036, 1054 (9th Cir. 1999). In other words, the test is highly

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indeterminate and it can be exceptionally difficult to predict how the eight factors will

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apply to a particular factual situation. That uncertainty makes it difficult for a potential

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plaintiff to assess its likelihood of success should it choose to pursue litigation.

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Here, application of the eight-factor test led the Court to grant summary judgment

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in favor of Defendants. (Doc. 111 at 9). According to Defendants, Plaintiff “patently

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disregarded controlling Ninth Circuit precedent of Cohn v. Petsmart, 281 F.3d 837 (9th

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Cir. 2002), which inescapably compelled the conclusion that likelihood of confusion was

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entirely eliminated.” (Doc. 116 at 3). While the Court agreed Cohn applied to the present

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case, the analysis in Cohn is somewhat unclear. As recognized by a leading treatise, the

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analysis in Cohn may be overly simplistic. See 1 McCarthy on Trademarks and Unfair

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Competition § 7:20 (5th ed.) (noting analysis of Cohn v. Petsmart should not be read as

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concluding “famous and strong slogans can be freely appropriated by a competitor just by

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using its own mark”). Thus, even in light of Cohn it was not obvious that Plaintiff’s claims

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would fail. In short, Plaintiff’s trademark infringement claims were not exceptionally weak

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when compared to other such claims the Court has handled.

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Defendants also maintain this case was exceptional because of the position Plaintiff

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adopted regarding damages. Throughout this case, Plaintiff maintained it would be entitled

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to recover a massive amount of damages.

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permissible amount of damages was much lower than Plaintiff claimed. Plaintiff’s position

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on damages was weak but Defendants have not established how Plaintiff’s unreasonable

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position on damages altered the effort required to defend the case. Parties often demand

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an amount in damages that has a relatively slim legal or factual basis. If demanding too

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much in damages was sufficient to render a case exceptional, too many cases would

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qualify. Plaintiff’s damages position does not render this case exceptional.

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Defendants repeatedly pointed out the

Having handled this case from the outset and being familiar with its history, it does
not qualify as exceptional under 15 U.S.C. § 1117.

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Accordingly,

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IT IS ORDERED the Motion for Attorneys’ Fees and Related Non-Taxable

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Expenses (Doc. 116) is DENIED.
Dated this 29th day of January, 2019.

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Honorable Roslyn O. Silver
Senior United States District Judge

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