Attorneys’ Fee Decision Should put Louis Vuitton in a Good Mood, but will it Gain a Sense of Humor?
In December, the Second Circuit ruled that My Other Bag (MOB) was not liable for infringing Louis Vuitton’s trademarks and copyrights because MOB’s bags were a parody of the luxury giant. See the details of the case in our previous post here.
After this sweet victory, MOB was hungry for more, so it filed a motion with the district court in the Southern District of New York requesting that Louis Vuitton pay MOB’s attorneys’ fees and costs. On January 8, 2018, the district court denied MOB’s motion for attorneys’ fees and costs. Although the district court reiterated its holding that Louis Vuitton should “learn how to take a joke,” the district court held that Louis Vuitton’s lack of a sense of humor is not a reason to grant MOB attorneys’ fees and costs.
Under Section 35(a) of the Lanham Act, a district court “in exceptional cases may award reasonable attorney fees to the prevailing party.” 15 U.S.C. § 1117(a). In the past, the Second Circuit has interpreted that to mean that a prevailing defendant can receive attorneys’ fees if they show the plaintiff acted with “fraud or bad faith.” However, a Supreme Court case in 2014 rejected a similar standard when interpreting language in the patent act. See O ctane Fitness, LLC v. ICON Health & Fit ness, Inc., 134 S. Ct. 1749 (2014). See also Supreme Court Update: Four Important Decisions for IP and Weak Patent Case? Think Twice Before Filing, In Light of Two 'Exceptional' SCOTUS Decisions. In Octane Fitness, the Supreme Court held that an “exceptional case” is “simply one that stands out from others with respect to the substantive strength of the 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.” While this standard has not yet been applied by the Second Circuit in Lanham Act (trademark) cases, the 9th, 5th, 4th, and 6th circuits, as well as the district court in the Southern District of New York, have all held that Octane Fitness applies to Lanham Act cases.
In this instance, the district court held that it did not matter because, even if the more lenient Supreme Court standard applies, MOB was not entitled to attorneys’ fees. The district court held that Louis Vuitton’s trademark claims “required the application of fact-intensive, multi-factor analysis” making it difficult to predict the outcome. The district court noted that parody cases are difficult to predict and that Louis Vuitton had obtained a prior decision in the Southern District of New York that arguably supports Louis Vuitton’s claims (although the district court found that decision to be flawed and distinguishable). Moreover, the district court found that Louis Vuitton’s infringement arguments cannot be viewed as “frivolous or a mere shakedown” or “objectively unreasonable.” The district court also cautioned that “a court should proceed cautiously before imposing fees on a trademark owner, lest it present trademark owners with the Hobson’s Choice of either defending their marks and risking punitive attorney fee awards or turning a blind eye to infringement and dilution and risking the loss of their rights.” The district court denied MOB’s motion for attorneys’ fees and costs on the claims under the Copyright Act on similar grounds.
Although this decision should put Louis Vuitton in a good mood, it remains to be seen whether the iconic brand will develop a sense of humor.
UPDATE: Despite the court admonishing Louis Vuitton for its lack of a sense of humor, it appears that My Other Bag (“MOB”) is still not laughing about the lawsuit and really wants its attorneys’ fees paid. On January 31, 2018, MOB filed an appeal to the Second Circuit. This could be the Second Circuit’s chance to apply the Octane standard to a Lanham Act (trademark) case. Will they join the other circuits which have already done so? The Federal Circuit thinks they will. In Romag Fasteners v. Fossil, the Federal Circuit predicted that the Second Circuit will “follow other circuits which have held that the Octane standard applies to the Lanham Act.” This might be the case that confirms or rejects that hypothesis.
Written By: Loni Morrow and Jonathan Hyman