United States District Court, D. South Dakota, Western Division
ORDER ON ATTORNEYS' FEES
JEFFREY L. VIKEN CHIEF JUDGE
October 30, 2015, after a ten-day jury trial, the jury
returned a unanimous verdict in SMRI's favor on the
following counts: (1) registered trademark infringement, (2)
unregistered trademark infringement; (3) trademark dilution;
(4) deceptive trade practices; (5) violations of the
Anti-Cybersquatting Consumer Protection Act; (6) false
advertising; and (7) unfair competition. (Docket 264). In its
verdict, the jury unanimously found in favor of SMRI on its
claims of infringement of the registered STURGIS®,
STURGIS BIKE WEEK®, and Composite Design marks and of the
unregistered STURGIS MOTORCYCLE RALLY™ and STURGIS
RALLY & RACES™ marks (jointly referred to as
“SMRI's Marks”). (Docket 263). The jury also
unanimously found in favor of SMRI on its claim of dilution
of the famous STURGIS® mark. Id. The court
entered judgment on those claims in favor of SMRI on December
2, 2015. (Docket 269).
January 4, 2016, SMRI filed a motion for attorneys' fees
as the prevailing party at trial, together with supporting
documentation. (Dockets 280-83). Defendants filed an
objection to plaintiff's motion. (Docket 351). SMRI filed
a reply brief in support of its' motion. (Docket 370).
17, 2016, the court filed an order granting defendants'
motion to compel SMRI to respond to post-trial discovery.
(Docket 344). On June 10, 2016, defendants filed a motion for
attorneys' fees as the prevailing parties on the motion
to compel discovery. (Dockets 359-61). SMRI filed an
objection to defendants' motion. (Docket 367). Defendants
filed a reply brief in support of their motion. (Docket 380).
March 10, 2017, the court entered an order granting in part
defendants' motion (Docket 275) for judgment as a matter
of law and granting in part defendants' motion (Docket
276) for application of equitable defenses. (Docket 420). The
order vacated the money judgment in favor of SMRI against
JRE, Inc., the RPG Defendants and Wal-Mart. Id. at
p. 63 (referencing Docket 269 ¶ 1). The order barred
SMRI from recovery of money damages prior to the date of the
jury verdict, that is, October 30, 2015. Id. at p.
63. The order left intact SMRI's ownership of the
trademarks based on the verdict. Id. at p. 62. The
court resolves the motions for attorneys' fees in this
MOTION FOR FEES AND COSTS
Lanham Act permits a prevailing plaintiff in a trademark
infringement case to recover attorney's fees and costs.
When a violation of any right of the registrant of a mark
registered in the Patent and Trademark Office, a violation
under section 1125(a) or (d) of this title, or a willful
violation under section 1125(c) of this title, shall have
been established in any civil action arising under this
chapter, the plaintiff shall be entitled, subject to the
provisions of sections 1111 and 1114 of this title, and
subject to the principles of equity, to recover . . . the
costs of the action. . . . The court in exceptional cases may
award reasonable attorney fees to the prevailing party.
15 U.S.C. § 1117(a). If the use of a counterfeit mark is
involved in the litigation, “the court shall, unless
the court finds extenuating circumstances, . . . [award] a
reasonable attorney's fee, if the violation consists of
(1) intentionally using a mark or designation, knowing such
mark or designation is a counterfeit mark . . . in connection
with the sale, offering for sale, or distribution of goods or
(2) providing goods or services necessary to the commission
of a violation specified in paragraph (1), with the intent
that the recipient of the goods or services would put the
goods or services to use in committing the violation. . . .
15 U.S.C. § 1117(b).
and defendants are to be treated alike, but attorney's
fees are to [be] awarded to prevailing parties only as a
matter of the court's discretion.” Aromatique,
Inc. v. Gold Seal, Inc., 28 F.3d 863, 876 (8th Cir.
1994) (internal citation and quotation marks omitted).
“[T]he Lanham Act . . . permits rather than mandates an
award of fees.” Id. The court's discretion
to award fees “is limited to exceptional cases.”
Id. (citing 15 U.S.C. § 1117(a)). “Courts
have defined the characteristics of exceptional cases with
adjectives suggesting egregious conduct by a party.”
Id. at 877. “[A]n exceptional case is one in
which [a party's] action was groundless, unreasonable,
vexatious, or pursued in bad faith. . . . [E]xceptional
behavior in this context [is] ‘malicious, fraudulent,
deliberate, or willful.' ” Id. (citation
omitted). “Succinctly put, an exceptional case within
the meaning of [Section 1117(a)] is one in which one
party's behavior went beyond the pale of acceptable
2011, the United States Court of Appeals for the Eighth
Circuit held “that when a defendant's unlawful
conduct was willful and deliberate, the court may well
determine that this is the type of ‘exceptional'
case for which an award of attorney's fees is
appropriate.” Community of Christ Copyright Corp.
v. Devon Park Restoration Branch of Jesus Christ's
Church, 634 F.3d 1005, 1013 (8th Cir. 2011) (internal
citation and some quotation marks omitted). Bad faith on the
part of an infringing defendant is not a prerequisite for the
court to find a case exceptional and award attorneys'
fees. Id. “[T]he district court's decision
on whether to award attorneys' fees [is reviewed] under
an abuse-of-discretion standard.” Id.
2014, the United States Supreme Court held “that an
‘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.” Octane
Fitness, LLC v. ICON Health & Fitness, Inc., U.S.,
134 S.Ct. 1749, 1756 (2014) (citing Fogerty v. Fantasy,
Inc., 510 U.S. 517, 534 (1994)). In exercising its
equitable discretion, a trial court “may determine
whether a case is ‘exceptional' . . . considering
the totality of the circumstances.” Id. The
Supreme Court explained that under the Copyright Act,
“district courts could consider a
‘nonexclusive' list of ‘factors, '
including ‘frivolousness, motivation, 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.' ”
Id. at 1756 n.6 (citing Fogerty, 510 U.S.
at 534 n.19). “Under the standard announced today, a
district court may award fees in the rare case in which a
party's unreasonable conduct-while not necessarily
independently sanctionable-is nonetheless so
‘exceptional' as to justify an award of
fees.” Id. at 1756-57. “[A] case
presenting either subjective bad faith or exceptionally
meritless claims may sufficiently set itself apart from
mine-run cases to warrant a fee award. . . . [W]e think it
fair to assume that Congress did not intend rigidly to limit
recovery of fees by a [Lanham Act] defendant to the rare case
in which a court finds that the plaintiff ‘acted in bad
faith, vexatiously, wantonly, or for oppressive reasons'
. . . . Something less than ‘bad faith, ' . . .
suffices to mark a case as ‘exceptional.' ”
Id. at 1757 (brackets in original) (citing
Noxell Corp. v. Firehouse No. 1 Bar-B-Que
Restaurant, 771 F.2d 521, 526 (C.A.D.C. 1985)
(“exceptional” in the Lanham Act's identical
fee-shifting provision, 15 U.S.C. § 1117(a), means
“uncommon” or “not run-of-the-mill”).
“[W]hether a case is ‘exceptional' [is
committed] to the discretion of the district court, that
decision is to be reviewed on appeal for abuse of
discretion.” Highmark Inc. v. Allcare Health
Management Systems, Inc., __ U.S.__, 134 S.Ct.
1744, 1748 (2014) (referencing Octane Fitness,
LLC, 134 S.Ct. 1749).
Octane Fitness, LLC, was a patent infringement case,
its' definition of “exceptional” applies to
trademark infringement cases. See Fair Wind Sailing, Inc.
v. Dempster, 764 F.3d 303, 315 (3d Cir. 2014) (“We
believe that the Court was sending a clear message that it
was defining ‘exceptional' not just for the fee
provision in the Patent Act, but for the fee provision in the
Lanham Act as well.”); Georgia-Pac. Consumer
Products LP v. von Drehle Corp., 781 F.3d 710, 721 (4th
Cir. 2015), as amended (Apr. 15, 2015) (same); Baker v.
DeShong, 821 F.3d 620, 623 (5th Cir. 2016) (same);
Slep-Tone Entertainment Corp. v. Karaoke Kandy Store,
Inc., 782 F.3d 313, 318 (6th Cir. 2015) (same);
SunEarth, Inc. v. Sun Earth Solar Power Co., Ltd.,
839 F.3d 1179, 1181 (9th Cir. 2016) (“We agree with the
majority of our sister circuits and conclude that Octane
Fitness and Highmark have altered the analysis
of fee applications under the Lanham Act. Therefore, district
courts analyzing a request for fees under the Lanham Act
should examine the ‘totality of the circumstances'
to determine if the case was exceptional, . . . exercising
equitable discretion in light of the nonexclusive factors
identified in Octane Fitness and Fogerty,
and using a preponderance of the evidence standard.”).
seeks $1, 311, 764 in attorneys' fees and related
expenses, discovery expenses of $18, 067.06 and travel
expenses of $33, 347.10, for a total of $1, 363, 178.16
(jointly referred to as “fees.”). (Docket 280 at
p. 1). SMRI asserts defendants' conduct was
“willful and deliberate, ” making this an
“exceptional case” warranting assessment of fees
under § 1117(a). Id. at p. 2 (citing
Community of Christ Copyright Corp., 634 F.3d at
1013) (additional citation omitted). Plaintiff argues that it
“achieved success on the merits on every claim that it
asserted in this litigation . . . . [and] achieved success on
every counterclaim and affirmative defense asserted by
Defendants.” (Docket 281 at p. 2). Even before the
March 10, 2017 order, this statement by SMRI was not
accurate. The jury found for the defendants on SMRI's
infringement claim regarding the “TAKE THE RIDE TO
STURGIS mark.” (Docket 263 at p. 4). Additionally, not
all of defendants' counterclaims and ...