Lovely Skin, Inc. v. Ishtar Skin Care Products, LLC

Filing 213

MEMORANDUM OPINION - After reviewing the motion, briefs, evidence, and relevant law, the Court finds the motion 182 should be denied. A separate order will be entered in accordance with this memorandum opinion. Ordered by Senior Judge Lyle E. Strom. (AOA)

IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEBRASKA
LOVELY SKIN, INC.,

)
)
Plaintiff,
)
)
v.
)
)
ISHTAR SKIN CARE PRODUCTS,
)
LLC.,
)
)
Defendant.
)
______________________________)

8:10CV87

MEMORANDUM OPINION

This matter is before the Court on the motion of
defendant Ishtar Skin Care Products, LLC (“Ishtar”) for attorney
fees and related nontaxable costs filed pursuant to 15 U.S.C.
§ 1117(a) (Filing No. 182, with brief and index of evidence,
Filing Nos. 183 and 184).

Plaintiff Lovely Skin, Inc. (“Lovely

Skin”) filed a brief in opposition to the motion (Filing No. 204,
with attached exhibits), to which Ishtar replied (Filing No.
206).

After reviewing the motion, briefs, evidence, and relevant

law, the Court finds the motion should be denied.
I.

Factual and Procedural Background.1
Lovely Skin brought this case against Ishtar alleging

trademark infringement under 15 U.S.C. § 1114(1), along with
three other associated claims (Filing No. 1).

Dr. Joel

Schlessinger and his wife, Nancy Schlessinger, are the sole
stockholders, directors and officers of Lovely Skin.

1

For a detailed factual background, see Findings of Fact,
Filing No. 176 (“Memorandum Opinion”).

Ishtar filed two counterclaims against Lovely Skin,
calling for cancellation of the two Lovely Skin trademarks at
issue (the “Lovely Skin Marks”) (Filing No. 41).

Ishtar’s sole

member and business manager is Ms. Sharokin Vardeh.
After a trial to the Court held July 18 - 23, 2012,
judgment was entered cancelling the Lovely Skin Marks, finding in
favor of Ishtar on all counts of the complaint, and assessing
taxable costs against Lovely Skin (Filing No. 177).
Specifically, the Court found that Ishtar had “satisfied its
burden to rebut the presumption that the Lovely Skin Marks had
acquired distinctiveness” (Memorandum Opinion, at 18).

In

addition, the Court found that “the Lovely Skin Marks had not
acquired secondary meaning as of the dates of their registration”
(Id. at 37).

Finally, with regard to the likelihood of confusion

analysis, this Court noted that “[i]t is indisputable that
similarities exist between the parties’ marks and that the
parties engage in competing sales of high-end cosmetics over the
internet” (Id. at 36).

Nevertheless, evaluating all of the

relevant factors and “taking into account the evidence presented
at trial,” this Court did not find that “a likelihood of
confusion exists between the parties’ marks” (Id.).
II.

Applicable Law.
“Under the American rule, each party generally pays

their own attorney fees unless express statutory authorization

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exists to the contrary.”

Hartman v. Hallmark Cards, Inc., 833

F.2d 117, 122 (8th Cir. 1987) (citing Hensley v. Eckerhart, 461
U.S. 424, 429 (1983)).

Section 35 of the Lanham Act provides

such an exception to the typical American Rule:

“The court in

exceptional cases may award reasonable attorney fees to the
prevailing party.”

15 U.S.C. § 1117.

“The Senate Report on the

bill adding the attorney fee provision to the Lanham Act
indicates defendants will be allowed to recover fees in
exceptional cases in order to ‘provide protection against
unfounded suits brought . . . for harassment and the like.’”
Hartman, 833 F.2d at 123 (quoting S. Rep. No. 93-1400, 93d Cong.,
2d Sess., reprinted in 1974 U.S. Code Cong. & Admin. News 7132,
7136).
In the Eighth Circuit, “[a]n exceptional case is one in
which a plaintiff brought an action that was groundless,
unreasonable, vexatious, or was pursued in bad faith.”
833 F.2d at 123 (quotation omitted).

Hartman,

Nevertheless, “[b]ad faith

is not a prerequisite to a Lanham Act fee award.”

Id.

“Succinctly put, an exceptional case within the meaning of
Section 35 is one in which one party’s behavior went beyond the
pale of acceptable conduct.”

Aromatique, Inc. v. Gold Seal,

Inc., 28 F.3d 863, 877 (8th Cir. 1994).
“Although bad faith is not a prerequisite to a Lanham
Act fee award, the mere fact that plaintiff did not prevail is
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not a sufficient basis for a finding that this is an exceptional
case.”

Saint Louis Univ. v. Meyer, 4:07-CV-1733, 2009 WL

1542765, at *1 (E.D. Mo. June 2, 2009) (internal citation
omitted) (citing Scott Fetzer Co. v. Williamson, 101 F.3d 549
(8th Cir. 1996)) (affirming denial of fees to prevailing
defendant).

“Where there is some evidence in the record to

support the claims of the non-prevailing party, the case is not
exceptional.”

Lewis & Clark Outdoors, Inc. v. L.C. Indus., Inc.,

5:07-CV-5164, 2009 WL 3617584 (W.D. Ark. Oct. 27, 2009), at *2
(citing Scott Fetzer Co., 101 F.3d at 555).
III.

Discussion.
Ishtar states that this is an “exceptional case”

because “Lovely Skin’s conduct indicates that it brought this
trademark infringement action to oppress and force its
competitor, Ishtar, out of business by imposing heavy litigation
costs on Ishtar . . .” (Filing No. 183, at 12-13).

As an

indication of Lovely Skin’s bad conduct, Ishtar emphasizes the
fact that Lovely Skin did not conduct a secondary meaning survey
in support of its contention that the Lovely Skin Marks had, in
fact, acquired secondary meaning, in conjunction with the Court’s
ultimate conclusion that secondary meaning in the Lovely Skin
Marks did not exist.

Ishtar surmises that Lovely Skin did not

perform the secondary meaning survey because of the certainty of
failure (Filing No. 183, at 4).

While a positive secondary

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meaning survey would have been strong evidence in Lovely Skin’s
favor, such surveys are by no means required.

See Frosty Treats

Inc. v. Sony Computer Entm’t Am. Inc., 426 F.3d 1001, 1005 (8th
Cir. 2005).

Instead of survey evidence, Lovely Skin presented

circumstantial evidence that it claimed supported a finding of
secondary meaning.

The fact that this effort was unsuccessful

does not necessarily translate into an “abuse of process” (Filing
No. 183, at 2).
Lovely Skin did provide “distinctiveness survey”
evidence by Mr. James T. Berger, who erroneously concluded that
the Lovely Skin Marks were suggestive.

As a result, Ishtar

suffered the expense of hiring a rebuttal survey expert.

While

Lovely Skin’s litigation strategy in this regard was also
unsuccessful (see Memorandum Opinion, at 20-21, 27-28), the Court
finds that Lovely Skin’s motive was not to “oppress” Ishtar.
Rather, the Court finds that Lovely Skin genuinely thought that
Mr. Berger’s opinion would be helpful.

(See Lovely Skin’s brief

in support of the admissibility of the report and testimony of
plaintiff’s expert James T. Berger, Filing No. 114).
Second, Ishtar states that Lovely Skin’s purpose in
bringing the suit was to hinder competition, rather than to
protect the Lovely Skin Marks.

For example, the evidence at

trial showed that Lovely Skin delayed making any demand upon
Ishtar until a few years after Lovely Skin learned of Ishtar’s

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alleged infringement.

Lovely Skin explains the time lag by

claiming both that it had difficulty locating Ms. Vardeh and that
it chose to bring suit after it experienced what it purports to
have been actual instances of confusion.
Ishtar also claims that during the interim before
filing suit, Lovely Skin tried to interrupt distribution from
vendors to Ishtar “in an attempt to disrupt Ishtar’s supply”
(Filing No. 183, at 5).

While it is true that Dr. Schlessinger

indicated in some of his emails to distributors that he was
unhappy with Ishtar as a competitor, the Court believes that this
is not an unusual occurrence in the world of commerce.

On the

other hand, Lovely Skin makes its own allegations of
inappropriate conduct by Ms. Vardeh’s husband and Ishtar’s major
supplier, Dr. Alan Darush, including the fact that just a few
weeks after the judgment in this case was entered, Dr. Darush
filed suit against Lovely Skin in the State of California (Ex. 2,
Filing No. 204, at 11).

The Court finds that both parties have

introduced issues that are far afield from the one before the
Court.

Such allegations are not relevant to the case at hand,

and the Court declines to enter the fray.
In addition, Ishtar renews some arguments having to do
with Lovely Skin’s choices of Google adwords; Ishtar made the
same arguments in support of its affirmative defense of unclean
hands.

The Court did not specifically make any conclusions of

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law as to this issue in its Memorandum Opinion, since the Court
decided for Ishtar on the issue of infringement.

The Court

declines to do so now.
Finally, Ishtar alleges that there are a great many
similarities between this case and one out of the Southern
District of Florida, Vital Pharmaceuticals, Inc. v. American Body
Building Products, LLC, 510 F. Supp. 2d 1043 (S.D. Fla. 2007).
There, the court awarded attorney fees to a defendant in a trade
dress infringement case where the plaintiff had not conducted a
secondary meaning survey, had introduced evidence of advertising
using an interested witness, and had not tied its advertising
expenses to any evidence of the effect the advertising had on
consumers.

The Court agrees with Ishtar that these elements are

also features of the case at hand.
The Court notes, however, that there were other
elements in Vital Pharmaceuticals that are not present here.

For

example, in that case, which involved the trade dress of a
bottle, the plaintiff “attempt[ed] to prove that it designed a
new and unique bottle for [one of its products], when all
evidence revealed the opposite to be true,” and the court found
this to be “evidence of bad faith.”
F. Supp. 2d at 1050.

Vital Pharmaceuticals, 510

No such allegations are made here.

Also,

in that case, the court found a “starkly different appearance”
between the products of the plaintiff and the defendant that

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should have “given the Plaintiff pause in thinking it could prove
a likelihood of confusion.”

Id. at 1051.

In this case, while

likelihood of confusion was not found, an indisputable similarity
exists between the parties’ marks.2

Finally, the Vital

Pharmaceuticals court found that the plaintiff’s motive was “to
stifle legitimate competition, rather than to protect a valid
trade dress,” as “evidenced” by plaintiff’s “evolving definition
of its trade dress throughout the case.”

Id.

In summary, this

Court observes that the plaintiff in Vital Pharmaceuticals
“brought an action that was groundless, unreasonable, [and]
vexatious” to a degree not evident in this case.

Hartman, 833

F.2d at 123.
Lovely Skin states that it “spent millions of dollars
advertising and promoting the LovelySkin and LovelySkin.com
marks” (Filing No. 204, at 1).

“This expenditure was made in

good faith based on Lovely Skin’s perception that the federal
trademark registrations issued by the U.S. Patent and Trademark
Office provided it with the exclusive right to use those marks in
connection with skincare products” (Id.).

The Court has no

reason to doubt Lovely Skin’s good faith in that conduct.

Lovely

Skin also avers, “The fact that this Court was not persuaded by

2

“Where there is some evidence in the record to support the
claims of the non-prevailing party, the case is not exceptional.”
Lewis & Clark, 2009 WL 3617584, at *2 (citing Scott Fetzer Co.,
101 F.3d at 555).
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the argument and evidence presented at trial does not warrant a
conclusion that Lovely Skin acted unreasonably or vexatiously in
trying to protect its mark and its business” (Id. at 2).

Again,

the Court agrees.
The fact that Lovely Skin’s presentation of evidence at
trial did not prevail does not necessarily constitute evidence of
bad intent.

“Despite ruling against [counterclaimant], the Court

is satisfied that [counterclaimant’s] purpose prior to and
throughout litigation was to vindicate what [counterclaimant]
believed were its legal rights.”

Mid-State Aftermarket Body

Parts, Inc. v. MQVP, Inc., 373 F. Supp. 2d 945, 946 (E.D. Ark.
2005) (finding the case unexceptional).

The Court’s impression

at trial was that Lovely Skin genuinely believed that its pursuit
of litigation was a reasonable business decision to protect what
it assumed were validly registered marks.

In short, the Court

finds that Lovely Skin’s actions in bringing this suit were not
“beyond the pale of acceptable conduct."
877.

Aromatique, 28 F.3d at

A separate order will be entered in accordance with this

memorandum opinion.
DATED this 21st day of December, 2012.
BY THE COURT:
/s/ Lyle E. Strom
______________________________
LYLE E. STROM, Senior Judge
United States District Court

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