United States District Court, E.D. Louisiana
FRANK W. BALLERO
727 INC., ET AL.
ORDER AND REASONS
727, Inc. and 721 Bourbon, Inc. prevailed in a trademark
infringement action and seek an award of attorney's fees.
Rec. Doc. 69. Plaintiff timely filed an opposition. Rec. Doc.
70. Defendants sought, and were granted, leave to file a
reply. Rec. Doc. 74.
reasons discussed below, IT IS ORDERED that
the motion (Rec. Doc. 69) is DENIED.
FACTUAL BACKGROUND AND PROCEDURAL
Frank Ballero sued Defendants 727, Inc., 721 Bourbon, Inc.,
and Crescent Crown Distributing, LLC for trademark
infringement under the Lanham Act in November 2016.
See Rec. Doc. 1. As discussed in more detail in
previous Orders and Reasons, Plaintiff brewed and sold a beer
called Pirate's Blood until March 2011, when he ceased
production. See Rec. Docs. 41 at 1-2; 65 at 1-2.
After Plaintiff stopped making Pirate's Blood, Defendants
continued to use the Pirate's Blood mark in their bars to
sell beer. See Rec. Docs. 41 at 2; 65 at 2.
Defendants referred to a beer as “Pirate's Blood,
” used a “Pirate's Blood” tap to
dispense the beer, and told customers that the beer was
brewed locally. See Rec. Docs. 41 at 2; 65 at 2.
moved to dismiss Plaintiff's case for failure to state a
claim on the basis that Plaintiff had abandoned his
trademark. See Rec. Docs. 24; 30. The motions to
dismiss were denied because Plaintiff alleged in his amended
complaint that he had met with breweries from 2012 to 2015 to
resume brewing Pirate's Blood. See Rec. Doc. 41
at 13-15. That being said, the Court did note that
Plaintiff's “vague allegation [about meetings with
breweries] . . . m[ight] not survive a subsequent motion for
summary judgment.” Id. at 14.
conducting discovery, Defendants moved for summary judgment,
again arguing that Plaintiff had abandoned his trademark.
See Rec. Docs. 54; 55. Defendants' motions for
summary judgment were granted because, though there was
evidence of Plaintiff's efforts to resume brewing
Pirate's Blood and otherwise defend his trademark,
Plaintiff's use of the Pirate's Blood mark was
insufficiently sustained and commercial to rebut a
presumption of abandonment. See Rec. Doc. 65 at
11-17. Defendants 727, Inc. and 721 Bourbon, Inc. then moved
for an award of the attorney's fees they incurred between
March 2017, when the motions to dismiss were denied, and
September 2017, when the motions for summary judgment were
granted. See Rec. Doc. 69.
Lanham Act allows an award of “reasonable attorney fees
to the prevailing party” “in exceptional
cases.” 15 U.S.C. § 1117(a). “[A]n
exceptional case is one where (1) in considering both
governing law and the facts of the case, the case stands out
from others with respect to the substantive strength of a
party's litigating position; or (2) the unsuccessful
party has litigated the case in an unreasonable
manner.” Baker v. DeShong, 821 F.3d 620, 625
(5th Cir. 2016) (citing Octane Fitness, LLC v. ICON
Health & Fitness, Inc., 134 S.Ct. 1749, 1756 (2014)).
Defendants argue, without citing a single case, that
Plaintiff's case was exceptional because of its
substantive weakness. See Rec. Doc. 69-1 at 7-10.
Specifically, Defendants argue that Plaintiff should have
known that his case could not survive summary judgment after
the Court questioned the viability of Plaintiff's
argument against abandonment. See Rec. Doc. 69-1 at
7-8 (quoting Rec. Doc. 41 at 14).
question of whether a case is exceptional is entrusted to a
district court's “case-by-case exercise of [its]
discretion, considering the totality of the
circumstances.” Baker, 821 F.3d at 625 (citing
Octane Fitness, 134 S.Ct. at 1756). Factors that may
inform this analysis include “frivolousness,
motivation, objective unreasonableness . . . [, ] and the
need in particular circumstances to advance considerations of
compensation and deterrence.” Octane Fitness,
134 S.Ct. at 1756 n.6. The Supreme Court further explained
that “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.”
Id. at 1757. However, the Supreme Court cautioned
that it will be “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.
applying this standard, district courts have found cases
exceptional when there is a constellation of red flags that
sets the case apart. See Laerdal Med. Corp. v. Basic Med.
Supply, LLC, No. H-16-35, 2016 WL 6436557, at *4 (S.D.
Tex. Oct. 31, 2016) (holding that case was exceptional
because Defendants defaulted and continued to infringe on
Plaintiff's trademarks); Farouk Sys., Inc. v. AG
Glob. Prods., LLC, No. H-15-0465, 2016 WL 6037231, at *4
(S.D. Tex. Oct. 14, 2016) (holding that case was exceptional
because Plaintiff's trade dress claim had substantive
weaknesses and Plaintiff initiated lawsuit to harass
defendant); see also Beastie Boys v. Monster Energy
Co., 112 F.Supp.3d 31, 45-47 (S.D.N.Y. 2015) (explaining
that a case may be exceptional when “the losing
party's litigation positions . . . were so devoid of
legal merit that one could only conclude that they were
advanced with an improper motive”).
substantive weakness of Plaintiff's case was not
remarkable; Plaintiff was able to develop some facts to
support his argument that he did not abandon the Pirate's
Blood trademark. See Rec. Doc. 56 at 2-4, 6-10.
During his deposition, Plaintiff testified that he attempted
to meet with five breweries about restarting Pirate's
Blood. See Rec. Doc. 54-3 at 47-48, 51-58, 67-69,
72. Documents produced by one of the breweries is consistent
with Plaintiff's testimony. See Rec. Doc. 56-1
at 59-68. Plaintiff also sought to register the Pirate's
Blood trademark and homebrewed Pirate's Blood for a beer
festival. See Rec. Doc. 56 at 3-4. This evidence was
insufficient to create a genuine issue of material fact with
respect to Plaintiff's abandonment of the Pirate's
Blood trademark. See Rec. Doc. 65 at 14-17. But the
evidence is sufficient to defeat Defendants' motion for
an award of attorney's fees, especially given
Plaintiff's otherwise proper engagement with the
proceedings. Cf. GeoDynamics, Inc. v. DynaEnergetics US,
Inc., No. 15-CV-01546-RSP, 2017 WL 6559170, at *4-5
(E.D. Tex. Dec. 21, 2017) (holding that a case was
exceptional for substantive weakness because there was
“overwhelming evidence that the mark was generic,
” plaintiff's briefing did not seriously engage
with the law, plaintiff offered “no evidence”
that it continued to use the trademark in question, and the
court believed plaintiff to have no damages).
further attempt to support their argument by faulting
Plaintiff's settlement position, see Rec. Doc.
69-1 at 9, but this contention is similarly unavailing.
Plaintiff rejected Defendants' April 2017 offer of
judgment because he wanted to first review Defendants'
sales data, which was not produced until August 2017-just
days before Defendants filed their motion for summary
judgment and a month after Plaintiff's deposition.
See Rec. Doc. 70-1. Moreover, it does not appear
that either party attempted to reinitiate settlement
discussions until September 2017, when Plaintiff reached out
to Defendants. See Id. Regardless, Defendant's
hesitation to engage in settlement discussions before
Defendants produced the sales data that would underpin any
damages figure is not unreasonable, nor does it rise to the
level of obstinance that would warrant an award of
attorney's fees. See Off-White LLC v. Paige,
LLC, No. 17-cv-2904, 2017 WL 3492006, at ...