Ducks Unlimited, Inc. v. Boondux, LLC

Decision Date09 March 2018
Docket NumberNo. 2:14-cv-2885-SHM-tmp,2:14-cv-2885-SHM-tmp
PartiesDUCKS UNLIMITED, INC., Plaintiff, v. BOONDUX, LLC and CALEB SUTTON, Defendants.
CourtU.S. District Court — Western District of Tennessee
ORDER

Before the Court is Plaintiff Ducks Unlimited, Inc.'s ("Ducks Unlimited") Motion for Attorney's Fees, Expenses, and Costs, filed on September 21, 2017. (ECF No. 169.) Defendants Boondux, LLC and Caleb Sutton (collectively, "Defendants") responded on October 16, 2017. (ECF No. 174.) Ducks Unlimited filed supplemental briefing on November 21, 2017. (ECF No. 179.) Defendants responded on December 8, 2017. (ECF No. 181.)

Also before the Court is Defendants' Submission of Supplemental Accounting, filed on December 8, 2017. (ECF Nos. 182-83.) Ducks Unlimited responded on December 15, 2017. (ECF No. 183.)

For the following reasons, Ducks Unlimited's Motion for Attorney's Fees, Expenses, and Costs is GRANTED in part and DENIED in part. Ducks Unlimited is entitled to $10,845.29 in taxable costs and is not entitled to attorney's fees or non-taxable costs. Ducks Unlimited is awarded $13,371.85 for profits arising from trademark infringement, in addition to damages awarded in the Court's August 18, 2017 Memorandum Opinion Findings of Fact and Conclusions of Law (ECF No. 163) and in the Court's September 8, 2017 Order (ECF No. 166).

I. Background

This Order includes an abbreviated background beginning from the Court's August 18, 2017 Memorandum Opinion Findings of Fact and Conclusions of Law (ECF No. 163). A complete background can be found in that Memorandum Opinion.

On August 18, 2017, the Court found Defendants liable for copyright infringement, trademark infringement, and false designation of origin or sponsorship. (ECF No. 163.) Defendants were enjoined from further using the Boondux Logo in commerce. (Id.) Ducks Unlimited was awarded $258,919.04 on its prevailing claims. (Id.) Ducks Unlimited was also ordered to elect statutory damages or profits on its copyright infringement claim. (Id.)

On August 25, 2017, Ducks Unlimited filed two notices. First is Ducks Unlimited's Notice of Election of an Accounting ofDefendants' Infringing Sales, asking that Defendants provide sales associated with their trademark infringement from their last accounting until the Court's August 18, 2017 Memorandum Opinion. (ECF No. 164.) Second is Ducks Unlimited's Notice of Election Pursuant to 15 U.S.C. § 504 to Accept Statutory Damages for its Copyright Infringement Claim in lieu of Profits, seeking $30,000.00 in statutory damages for copyright infringement. (ECF No. 165.)

On September 8, 2017, based on Ducks Unlimited's second Notice of Election, the Court awarded Ducks Unlimited statutory damages for copyright infringement in the amount of $30,000.00. (ECF No. 166.) Those damages were in addition to damages awarded in the Court's August 18, 2017 Memorandum Opinion (ECF No. 163). (Id.)

On September 21, 2017, Ducks Unlimited filed its Motion for Attorney's Fees, Expenses, and Costs. (ECF No. 169.) Ducks Unlimited seeks $10,845.29 in taxable costs, $5,515.29 in non-taxable costs, and $380,885.00 in attorney's fees on its copyright infringement claim and related claims. (Id.) Defendants responded on October 16, 2017. (ECF No. 174.)

On November 3, 2017, Ducks Unlimited filed an Unopposed Motion to Set Schedule for Production of Defendants' Accounting, requiring Defendants to provide, by December 8, 2017, "anaccounting of the number of units sold and gross revenue of items bearing the Boondux Logo from the date of its last production of sales figures in this case through August 18, 2017." (ECF No. 176.) The Court granted the unopposed motion the same day. (ECF No. 177.)

On November 9, 2017, the Court entered an Order for Supplemental Briefing on Attorney's Fees, requiring Ducks Unlimited to file supplemental briefing addressing whether this matter is an "exceptional case" under the Lanham Act to justify attorney's fees on its trademark claims or file supplemental briefing that limits its fees, expenses, and costs to its copyright claims. (ECF No. 178.) Ducks Unlimited filed its supplemental brief on November 21, 2017. (ECF No. 179.) Defendants responded on December 8, 2017. (ECF No. 181.)

On December 8, 2017, Defendants filed their accounting of profits from products bearing the Boondux Logo from the date of their last production of sales figures through August 18, 2017. (ECF No. 182.) Defendants assert that sales amounted to $13,371.85, and that costs associated with those sales amounted to $34,550.84. (Id.) Defendants seek a decrease in Ducks Unlimited's profit award of $258,919.04 to $237,740.05. (Id.) Ducks Unlimited responded on December 1, 2017. (ECF No. 183.)

II. Legal Standard
A. Attorney's Fees
1. Federal Rule of Civil Procedure 54(d)(2)

Federal Rule of Civil Procedure 54(d)(2)(B) governs motions for attorney's fees:

Unless a statute or a court order provides otherwise, the motion must:
(i) be filed no later than 14 days after the entry of judgment;
(ii) specify the judgment and the statute, rule, or other grounds entitling the movant to the award;
(iii) state the amount sought or provide a fair estimate of it; and
(iv) disclose, if the court so orders, the terms of any agreement about fees for the services for which the claim is made.
2. Local Rule 54.1(b) Requirements

Local Rule 54.1(b) supplements the rules governing motions for attorney's fees:

Consistent with the provision in [Rule] 54(d)(2)(B) permitting variation in the time for filing a motion for attorney's fees, a motion for an award of attorney's fees and related non-taxable expenses may be filed within 14 days from the date the Court's judgment becomes final. In addition to the requirements of [Rule] 54(d)(2), a motion for an award of attorney's fees shall be supported by a memorandum setting forth the authority of the Court to make such an award, why the movant should be considered theprevailing party, if such a consideration is required for the award, and any other factors that the Court should consider in making the award. The motion shall also be supported by:
(1) an affidavit or declaration of counsel setting out in detail the number of hours spent on each aspect of the case, and the rate customarily charged by counsel for such work; and,
(2) an affidavit or declaration of another attorney in the community, who is not otherwise involved with the case, setting out the prevailing rate charged in the community for similar services. Within eleven days after service of the motion, the party against whom the award is requested shall respond with any objections thereto and an accompanying memorandum setting forth why the award is excessive, unwarranted, or unjust.
3. Copyright Infringement Attorney's Fees

Under the Copyright Act, it is within the court's discretion to award reasonable fees to the "prevailing party." 17 U.S.C. § 505. The court may not award fees as a matter of course. Fogerty v. Fantasy, Inc., 510 U.S. 517, 533 (1994). An award must further the purposes of the Copyright Act. Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 1979, 1983-85 (2016).

To determine whether to award attorney's fees, the deciding court must "give substantial weight to the objective reasonableness of the losing party's position," and assess nonexclusive factors, such as "frivolousness, motivation, . . .and the need in particular circumstances to advance considerations of compensation and deterrence." Id.

4. Trademark Infringement Attorney's Fees

Title 15 U.S.C. § 1117(a) provides that "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." The statute does not define "exceptional," but the Sixth Circuit has held that a case is not exceptional unless "the infringement was malicious, fraudulent, willful, or deliberate." Hindu Incense v. Meadows, 692 F.2d 1048, 1051 (6th Cir. 1982).

"Trial judges have considerable discretion in [deciding] § 1117 motions for attorney fees." Sovereign Order of Saint John of Jerusalem, Inc. v. Grady, 119 F.3d 1236, 1244 (6th Cir. 1997). A case cannot be exceptional "if there is the slightest doubt" as to whether the defendant acted with the requisite intent. Hindu Incense, 692 F.2d at 1052 (citing O'Brien Int'l, Inc. v. Mitch, 209 USPQ 212, 221 (N.D. Cal. 1980)).

Octane Fitness, LLC v. ICON Health & Fitness, Inc. also provides guidance. 134 S. Ct. 1749 (2014). In Octane Fitness, the Supreme Court clarified the meaning of "exceptional" under the Patent Act's fee-shifting provision, 35 U.S.C. § 285. Id. at 1751. Thirty-five U.S.C. § 285 is identical to 15 U.S.C. § 1117(a). Compare 15 U.S.C. § 1117(a) with 35 U.S.C. § 285.Statutes using the same language are interpreted consistently. See United States v. Hynes, 467 F.3d 951, 967 (6th Cir. 2006) ("The Supreme Court has held that statutes containing similar language and having a similar underlying purpose should be interpreted consistently.") (citing Northcross v. Bd. of Educ. of Memphis City Schs., 412 U.S. 427, 428 (1973)); see also Slep-Tone Entm't Corp. v. Karaoke Kandy Store, Inc., 782 F.3d 313, 317-18 (6th Cir. 2015) (remanding to district court and instructing that identical statutes such as the Patent Shifting Provision and the Lanham Act should be interpreted alike).

In Octane Fitness, the Supreme Court held that, applying the ordinary meaning of "exceptional," fees should be awarded only in a case "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." Id. at 1756. The Supreme Court did not state a "precise rule or formula for making these determinations," and said that district courts have discretion to make exceptional case determinations on a case-by-case basis. Id. at 1756. The Court provided a "'nonexclusive' list of 'factors,' including 'frivolousness, motivation, objective unreasonableness (both in...

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