Derma Pen v. 4EverYoung Limited et al

Filing 1306

MEMORANDUM DECISION AND ORDER granting 1295 Motion for Attorney Fees in favor of Joel Marshall, Sasha Marshall, and DP Derm and against Derma Pen and Derma Pen IP Holdings, jointly and severally, in the total amount of $190,328.75. Signed by Judge David Nuffer on 7/8/19 (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
DERMA PEN, LLC,
Plaintiff,

MEMORANDUM DECISION AND
ORDER GRANTING NONPARTIES’
MOTION FOR ATTORNEYS’ FEES

v.

Case No. 2:13-cv-00729-DN

4EVERYOUNG LIMITED, et al.,

District Judge David Nuffer

Defendants.

Nonparties Joel Marshall, Sasha Marshall, and DP Derm LLC (collectively,
“Nonparties”) have filed a motion (“Motion”) under 15 U.S.C. § 1117(a) for an award of
attorneys’ fees in the amount of $190,328.75 against Derma Pen LLC and Derma Pen IP
Holdings LLC (“DPIPH”) in connection with the recently concluded civil contempt proceeding
against the Nonparties. 1 Section 1117(a) states that “[t]he court in exceptional cases may award
reasonable attorney fees to the prevailing party” “in any civil action arising under” the Lanham
Act. 2 Because this civil action unquestionably arises under the Lanham Act, § 1117(a) applies. 3
To be eligible to recover fees under § 1117(a), the Nonparties must be the “prevailing
party.” The Supreme Court has defined “prevailing party” as “a party in whose favor judgment is

1

Non-Parties Motion for an Award of Attorney’s Fees Incurred in These Contempt Proceedings and Supporting
Memorandum (“Motion”), docket no. 1295, filed February 25, 2019; see Declaration of Jefferson W. Gross in
Support of Non-Parties’ Motion for an Award of Attorney’s Fees Incurred in These Contempt Proceedings
(“Declaration”), docket no. 1296, filed February 25, 2019; Derma Pen LLC and Derma Pen IP Holdings LLC
Memorandum in Opposition to Non-Parties’ Motion for Attorney’s Fees Incurred in These Contempt Proceedings,
docket no. 1300, filed March 25, 2019; Reply in Support of Non-Parties’ Motion for an Award of Attorney’s Fees
Incurred in These Contempt Proceedings, docket no. 1303, filed April 30, 2019.
2

elm

15 U.S.C. § 1117(a). The Lanham Act is codified at 15 U.S.C. § 1051 et seq.

3

See Gnesys, Inc. v. Greene, 437 F.3d 482 (6th Cir. 2005) (applying § 1117(a) to contempt proceedings).

rendered, regardless of the amount of damages awarded.” 4 To meet this definition, “a litigant
must demonstrate the existence of judicial imprimatur by identifying judicial action that altered
or modified the legal rights of the parties.” 5 The Findings of Fact, Conclusions of Law, and
Order Regarding Abandonment, Contempt, and Discovery Sanctions (“Ruling”) 6 sufficiently
evidence this imprimatur. Among other things, the Ruling establishes that the Nonparties’ mark
is permissible; that Derma Pen LLC has no right to enforce DPIPH’s injunction; that the
Nonparties are not in contempt; that Derma Pen LLC and DPIPH are entitled to “no relief”
against the Nonparties; and that the Nonparties are entitled to recover certain fees from Derma
Pen LLC and DPIPH. 7 Thus, the Nonparties were the “prevailing party” in this proceeding.
In addition to being the prevailing party, to recover fees under § 1117(a) the Nonparties
must show that this was an “exceptional” case. “[A]n ‘exceptional’ case is simply one that stands
out from others with respect to the substantive strength of a party’s litigating position
(considering both the governing law and the facts of the case) or the unreasonable manner in
which the case was litigated.” 8 “District courts may determine whether a case is ‘exceptional’ in
the case-by-case exercise of their discretion, considering the totality of the circumstances.” 9 For
example, courts may consider, among other nonexclusive factors, “frivolousness, motivation,

4

Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598, 603 (2001) (internal
quotation marks omitted).

5

Xlear, Inc. v. Focus Nutrition, LLC, 893 F.3d 1227, at 1239 (10th Cir. 2018).

6

Docket no. 1292 (“Ruling”), filed February 14, 2019.

7

See id. at 8, 10-12.

8

Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 554 (2014). Octane Fitness concerned an
identical patent statute, and federal courts have since applied the same standard to § 1117(a). See, e.g., Georgia-Pac.
Consumer Prods. LP v. von Drehl Corp., 781 F.3d 710, 719-21 (4th Cir. 2015).

9

Octane Fitness, 572 U.S. at 554.

2

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.” 10
This is not a case where the Nonparties simply failed to satisfy their burden of proving
the Nonparties’ civil contempt by clear and convincing evidence. Rather, this is a case where
Derma Pen LLC and DPIPH produced no evidence of damages; where the evidence showed
that Derma Pen LLC has no right to enforce the injunction; where the evidence showed that
DPIPH’s trademark was abandoned; 11 where monetary sanctions were imposed on Derma Pen
and DPIPH; and where Derma Pen LLC and DPIPH were entitled to “no relief” against the
Nonparties. This is also a case where it was expressly found that Derma Pen LLC and “DPIPH’s
evidence was not clear; it was muddled. It was not convincing; it was unpersuasive.” 12
Considering the totality of the circumstances, including the foregoing facts and others
mentioned in the Motion, this case is “exceptional,” and the Nonparties should be awarded their
reasonable attorneys’ fees under § 1117(a). To determine the amount of attorneys’ fees that
should be awarded to a prevailing party, courts “generally determine what fee is reasonable by
first calculating the lodestar—the total number of hours reasonably expended multiplied by a
reasonable hourly rate—and then adjust the lodestar upward or downward to account for the
particularities of the suit and its outcome.” 13 Based on the evidence presented, the arguments of
the parties, and for good cause appearing, the lodestar in this case is $190,328.75. It is calculated

10

Id. at 554 n.6 (internal quotation marks omitted).

11
Because this was not a declaratory action on abandonment, nothing in this Order should be construed as declaring
the trademark to be abandoned for any purpose beyond what is expressly stated in the Ruling. See Ruling, supra
note 6, at 6-7, 10.
12

Id. at 10.

13

Phelps v. Hamilton, 120 F.3d 1126, 1131 (10th Cir. 1997) (citation omitted).

3

as set forth in the declaration that the Nonparties submitted in support of the Motion. 14 There is
no need for an upward or downward adjustment to this amount.
Accordingly, as the prevailing party in this case, the Nonparties should be awarded
$190,328.75 in reasonable attorneys’ fees against Derma Pen LLC and DPIPH.
ORDER
THEREFORE, IT IS HEREBY ORDERED that the Motion 15 is GRANTED. A
judgment will be entered in favor of Nonparties against Derma Pen LLC and DPIPH, jointly and
severally, for reasonable attorneys’ fees in the total amount of $190,328.75.
Signed July 8, 2019.
BY THE COURT:

David Nuffer
United States District Judge

14

Declaration, supra note 1.

15

Docket no. 1295, filed February 25, 2019.

4