Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Alumet Supply, Inc. v. Alumet Manufacturing

July 26, 2006

ALUMET SUPPLY, INC., PLAINTIFF,
v.
ALUMET MANUFACTURING, INC., DEFENDANT.



The opinion of the court was delivered by: Lifland, District Judge

MEMORANDUM & ORDER

Before the Court is the motion of Plaintiff Alumet Supply, Inc. ("ASI") for attorneys' fees and costs as the prevailing party under Section 35(a) of the Lanham Act, 15 U.S.C. § 1117. For the reasons expressed below, ASI's motion is denied.

BACKGROUND

In December 2002, ASI filed a declaratory judgment action seeking a declaration of noninfringement in response to Alumet Manufacturing Inc.'s ("AMI") demand that it cease using the "Alumet" mark. AMI counterclaimed for federal trademark infringement pursuant to Section 32 of the Lanham Act and unfair competition under Section 43(a) of the Lanham Act, 15 U.S.C. §§ 1114 and 1125 respectively. A claim for dilution under the Federal Trademark Dilution Act ("FTDA"), 15 U.S.C. § 1125(c), was added shortly before trial. AMI sought to enjoin ASI's use of the mark, but did not seek monetary damages.

On June 7, 2006, after a two-day bench trial, the Court granted ASI's motion for judgment as a matter of law against AMI, concluding that AMI had failed in all respects to offer any evidentiary support for its claims against ASI. ASI now seeks attorneys' fees in the amount of $147,322.80 and reimbursement of costs totaling $5,198 incurred during course of litigation.

ANALYSIS

The Lanham Act permits "the court in exceptional cases [to] award reasonable attorney fees to the prevailing party." 15 U.S.C. § 1117(a). The Third Circuit has held that an "exceptional case must involve culpable conduct on the part of the losing party." Securacomm Consulting, Inc. v. Securacom Inc., 224 F.3d 273, 280 (3d Cir. 2000) (citing Ferrero U.S.A., Inc. v. Ozak Trading, Inc., 952 F.2d 44, 47 (3d Cir. 1991)). A finding of "bad faith, fraud, malice, or knowing infringement" must be made by the district court in order for a case to qualify as exceptional. Id. However, the Third Circuit has recognized that "culpable conduct comes in a variety of forms and may vary depending on the circumstances of a particular case." Id. Indeed, the Securacomm court concluded that culpability is not only based on infringing acts, but that in cases where the defendant is the prevailing party, "the plaintiff's culpable conduct will necessarily center on the act of filing the lawsuit rather than on the infringement." Id. (holding language of statute and legislative history do not preclude using litigating conduct as a basis for a fee award).

The legislative history specifically explains:

[The attorneys' fee provision] provides that attorney fees may be awarded to the prevailing party in actions under the federal trademark laws, when equitable considerations justify such awards. It would make a trademark owner's remedy complete in enforcing his mark against willful infringers, and would give defendants a remedy against unfounded suits.

S. Rep. No. 93-1400, at 6 (1974), reprinted in 1974 U.S.C.C.A.N. 7132, 7137 (emphasis added). "By using the term 'equitable considerations,' [it is] clear that Congress intended to invoke the tradition of equity, a hallmark of which is the ability to assess the totality of the circumstances in each case." Securacomm, 224 F.3d at 281. Thus, vexatious or unjustified litigation or the filing of a frivolous lawsuit can form the basis for an award of fees under § 1117. See id. at 282-83.

Here, ASI argues that AMI's total lack of evidence to support its counterclaims of infringement, unfair competition and dilution, and its pursuit of these claims despite knowing that it lacked such evidence, establish ASI's right to an award of attorneys' fees. AMI did not start the lawsuit, but according to ASI, AMI brought unfounded counterclaims to frustrate and harass ASI in its effort to get a declaration of its right to use the "Alumet Supply" service mark. To support this position, ASI points not only to the total lack of evidence of customer confusion, but also, more fundamentally, to the fact that AMI manufactured entirely different types of products, provided distinctly different goods and services to different customer bases and operated in geographically distinct areas and that ASI had co-existed with AMI for over five years without AMI's knowledge of it. Finally, ASI points to AMI's own admission that it did not consider ASI to be a competitor, to demonstrate that AMI's counterclaims were unfounded.

AMI responds that the actions undertaken to police its registered mark were not vexatious. Having successfully survived two summary judgment motions, AMI sought adjudication on the merits, as was its right. Unlike in Securacomm, AMI did not seek to "destroy a financially weaker adversary through oppressive litigation tactics." Id. at 277. Rather, AMI argues that both it and ASI engaged in "vigorous use of the legal process," id., to protect what each sought as a valuable asset -- its fanciful trade name. According to AMI, its persistence in seeking adjudication of its claims does not constitute the sort of vexatiousness required in an "exceptional case" within the meaning of § 1117.

ASI brought the declaratory judgment action against AMI. AMI answered and counterclaimed as it was compelled to do. Fed. R. Civ. P. 13. In the context of "use it or lose it," AMI had no option but to face ASI in litigation to protect its registered trade name. Thus, at least initially, AMI's compulsory counterclaims cannot be construed as vexatious, unjustified or frivolous.

In applying the summary judgment standard, the Court was constrained to only identify disputed factual issues by drawing all reasonable inferences in favor of the non-moving party, and was precluded from assessing the evidence as it relates to those disputed issues. Summary judgment was properly denied. The Court concluded that there were factual determinations not appropriately resolved at the summary ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.