Marketquest Group, Inc. v. Societe Bic, S.A. et al
Filing
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ORDER denying Defendant's 331 Motion for Attorney Fees and 335 Motion for Attorney Fees. Signed by Judge Cynthia Bashant on 7/2/2015. (jah)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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MARKETQUEST GROUP, INC., a
California corporation d/b/a All-InOne,
Plaintiff,
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v.
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ORDER DENYING
DEFENDANT’S MOTION TO
AWARD ATTORNEYS’ FEES
[ECFs 331, 335]
BIC CORPORATION, a Connecticut
corporation, et al.,
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Case No. 11-cv-618 BAS (JLB)
Defendants.
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Plaintiff Marketquest Group, Inc. (“Marketquest”) initiated this action for
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trademark infringement against Defendants BIC Corporation, et al. (“BIC”) on
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March 28, 2011. ECF 1. On August 26, 2011, Marketquest moved for a preliminary
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injunction, which the court denied on November 7, 2011. ECFs 27, 41.
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The litigation proceeded for three more years, culminating in cross-motions
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for summary judgment. ECFs 199, 205, 214–219. On April 17, 2015, the Court
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granted BIC’s motions for summary judgment and denied Marketquest’s. ECF 327.
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This ruling proved dispositive; the Court dismissed Marketquest’s claims on the
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merits and BIC abandoned its counterclaims. Id. Marketquest appealed the ruling on
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May 15, 2015, and the appeal is currently pending before the Ninth Circuit. ECF
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339, USCA Case No. 15-55755.
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11-cv-618 BAS (JLB)
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Pending before the Court is BIC’s May 1, 2015 motion for attorneys’ fees.
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BIC argues that this Court should award attorneys’ fees by either declaring the case
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exceptional under the Lanham Act or exerting its inherent power to award fees. For
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the following reasons, the Court DENIES the motion. ECFs 331, 335.
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I. Legal Standard
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A trial court hearing a trademark dispute “in exceptional cases may award
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reasonable attorney fees to the prevailing party.” 15 U.S.C. § 1117(a). This language
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mirrors the standard used in patent cases. Compare 15 U.S.C. § 1117(a) to 35 U.S.C.
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§ 285. “District courts may determine whether a case is ‘exceptional’ in the case-by-
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case exercise of their discretion, considering the totality of the circumstances.”
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Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1751 (2014).
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The court may consider “frivolousness, motivation, objective unreasonableness
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(both in the factual and legal components of the case) and the need in particular
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circumstances to advance considerations of compensation and deterrence.” Id.at
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1756 n. 6 (citation omitted). Courts determine this fee-shifting based on the
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preponderance of the evidence. Id. at 1758.
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“When a cause of action has been created by a statute which expressly
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provides the remedies for vindication of the cause, other remedies should not readily
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be implied.” Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 720
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(1967). As a result, courts may not assert their equitable powers in trademark cases
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governed by the Lanham Act to award attorneys’ fees. Id.
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The finding that a case is exceptional such that it warrants attorneys’ fees is
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collateral to the questions currently on appeal and may therefore be disposed of
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independently by the trial court. See Sprague v. Ticonic Nat. Bank, 307 U.S. 161,
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168 (1939); Popeil Bros., Inc. v. Schick Elec., Inc., 65 F.R.D. 127, 128 (N.D. Ill.
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1974) aff'd, 516 F.2d 772 (7th Cir. 1975). The text of the statute “emphasizes the
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fact that the determination is for the district court.” Highmark Inc. v. Allcare Health
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Mgmt. Sys., Inc., 134 S. Ct. 1744, 1748 (2014), quoting Pierce v. Underwood, 487
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U.S. 552, 559 (1988). “‘[A]s a matter of the sound administration of justice,’ the
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district court ‘is better positioned’ to decide whether a case is exceptional, because
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it lives with the case over a prolonged period of time.” Id., quoting Pierce at 559–
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560. “The question is ‘multifarious and novel,’ [and] not susceptible to ‘useful
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generalization’” lending itself to de novo review. Id. at 1748–49, quoting Pierce at
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562.
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II. Analysis
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BIC argues that fees should be awarded because Marketquest’s claims were
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meritless, and Marketquest was on notice of this after the court denied their motion
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for a preliminary injunction. Mot. for Att’ys’ Fees 3:19–7:20, ECF 335. Without
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rehashing the Court’s Order Granting Summary Judgment, this misstates the Court’s
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findings. The Court, in the Order Denying Preliminary Injunction, found that
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substantial evidence showed BIC had infringed on Marketquest’s trademarks. See
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Summ. J. Order 4:26–5:4, ECF 327.
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At the time the preliminary injunction was denied, Marketquest had not
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finished its discovery. If discovery had revealed that BIC’s uses of the subject marks
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was undertaken maliciously, the factors may have weighed against summary
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judgment.
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It was only after an extensive analysis of the context of the infringement and
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the meaning and uses in commerce of the subject marks that the Court granted
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summary judgment predicated on BIC’s affirmative fair use defense. While not
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unprecedented, summary judgment on fair use is uncommon in the Ninth Circuit.
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Taking into account the substantial evidence of infringement and the real possibility
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that summary judgment would be denied, it was reasonable for Marketquest to
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continue to litigate this case, despite the failure to secure a preliminary injunction.
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Finally, BIC’s evidence of discovery malfeasance in itself does not make this
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case exceptional. BIC may be correct that “litigation tactics unreasonably
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increase[ing] the burden of defending the lawsuit” permit a court to award fees. Mot.
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7:23–25. However, each example of overly burdensome discovery was ultimately
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either severely limited or outright denied by Magistrate Judges McCurine and
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Burkhardt. While these disputes were hard-fought and time consuming, they are not
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exceptional in complex civil cases and did not result in overly broad or excessive
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discovery. Additionally, discovery abuses are more typically addressed through
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discovery sanctions, which may themselves shift fees appropriately and more
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directly address and discourage the conduct.
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Taking into account both the totality of the alleged misconduct and each
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specific instance, the Court finds that none of the allegations warrant labelling as
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“exceptional.” As a result, the Court DENIES the motion for attorneys’ fees in its
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entirety.
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III.
Conclusion
For the foregoing reasons, the Court DENIES BIC’s motion for attorneys’
fees. ECFs 331, 335.
IT IS SO ORDERED.
Dated: July 2, 2015
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