Yankee Candle Co. v. Bridgewater Candle Co., LLC

• Decision Date: 14 May 2001
• Docket Number: Civil Action No. 98-30226-MAP.
• Citation: 140 F.Supp.2d 111
• Parties: The YANKEE CANDLE COMPANY, INC., Plaintiff, v. The BRIDGEWATER CANDLE COMPANY, LLC, Defendant
• Court: U.S. District Court — District of Massachusetts

140 F.Supp.2d 111

The YANKEE CANDLE COMPANY, INC., Plaintiff, v. The BRIDGEWATER CANDLE COMPANY, LLC, Defendant

Civil Action No. 98-30226-MAP.

United States District Court, D. Massachusetts.

May 14, 2001.

COPYRIGHT MATERIAL OMITTED

Mary R. Bonzagni, Law Offices of Donald S. Holland, Longmeadow, MA, Donald S. Holland, Holland & Bonzagni, P.C., Longmeadow, MA, Gregory L. Baker, Colin Foley, Howrey Simon Arnold & White, Washington, DC, Cecil E. Key, Jr., Brobeck Pheger & Harrison, Washington, DC, for Plaintiff.

Jeffrey M. Karmilovich, Richard M. Moose, Dority & Manning, Greenville, SC, Michael A. Albert, Wolf, Greenfield & Sacks, Boston, MA, for Defendants.

Kathleen A. Linert, Morrison, Mahoney & Miller, Boston, MA, for movant.

MEMORANDUM REGARDING DEFENDANT'S MOTION TO RECOVER ATTORNEYS' FEES AND COSTS

(Docket No. 189)

PONSOR, District Judge.

I. INTRODUCTION

The defendant, Bridgewater Candle Company, ("Bridgewater") has moved for attorneys' fees and costs against plaintiff Yankee Candle Company ("Yankee"). Yankee brought claims under the Copyright Act, the Lanham Act and Mass. Gen. Laws ch. 93A, as well as a common law claim of tortious interference with business relationships, regarding its "Housewarmer" line of scented candles. Summary Judgment was entered in favor of Bridgewater on the copyright and trade dress claims on June 8, 2000, and on the Chapter 93A claim on July 27, 2000. These rulings are now before the First Circuit Court of Appeals.

The court will allow most of the fees and costs defendant seeks in this case. Yankee Candle's pursuit of this litigation has served not to defend any colorable copyright or trade dress claim, but to intimidate discourage and financially damage an upstart competitor. Awarding fees will serve the purposes of the statutes, and is fair and reasonable under the circumstances.

II. BACKGROUND

Yankee Candle's 26-page complaint asserts copyright and trade dress infringement of its "Housewarmer" line of jarred, scented candles. The candles, which have scents including Eucalyptus, Cranberry, Gardenia and French Vanilla, carry labels with photographs depicting the particular scent of each candle. Bridgewater's candles have similar scents, and also feature photographic labels. Yankee alleged that Bridgewater intentionally infringed the copyrighted labels and trade dress of the "Housewarmer" line, resulting in consumer confusion. Specifically, it charged that Bridgewater's labels were so similar to Yankee's copyrighted labels as to be nearly identical, and that Bridgewater had infringed Yankee's trade dress in the overall "look and feel" of its candles, the design of its catalogue, and the use of a "vertical display system" for showing candles in stores. Yankee also alleged common law trade dress infringement, tortious interference with business relationships, and violation of Mass. Gen. Laws ch. 93A.

On May 18, 1999, the court denied Yankee's request for a preliminary injunction, finding that it was unlikely to prevail on the merits. After contentious discovery, the case reached summary judgment on all counts. The court allowed summary judgment on the copyright and Lanham Act claims, ruling that no reasonable juror could find the labels on the candles to be nearly identical, and that each element of alleged trade dress infringement was either not protectable or not likely to cause consumer confusion about the origin of the goods.¹

Summary judgment was denied as to the tortious interference and Chapter 93A counts because Yankee had produced some evidence, "although minimal," of actionable conduct. Yankee Candle Co., Inc. v. Bridgewater Candle Co., Inc., 99 F.Supp.2d 140, 157 (D.Mass.2000). According to affidavits, Bridgewater had falsely represented to a Yankee customer that it had taken over Yankee, resulting in some customers leaving Yankee and moving to Bridgewater. See id. A dispute remained, however, whether this actionable conduct had been committed "primarily and substantially" within Massachusetts for the purposes of Mass. Gen. Laws ch. 93A. On a motion for reconsideration, the court held that it had not, thereby eliminating the Chapter 93A claim. Only the tortious interference count survived, and this portion of the case was dismissed by agreement pending the outcome of Yankee's appeal.

As noted, appeal on the merits is now pending, but this court has retained jurisdiction over Bridgewater's motion for attorneys' fees under the Copyright and Lanham Acts.

III. DISCUSSION

A. Attorneys' Fees Under the Copyright Act

Defendant seeks attorneys' fees under § 505 of the Copyright Act, which allows the court in its discretion to award costs and "a reasonable attorney's fee" to "the prevailing party" in a copyright case. 17 U.S.C. § 505 (1996). Unlike many fee statutes, the Copyright Act requires courts to exercise their discretion in favor of prevailing plaintiffs and prevailing defendants in an evenhanded manner. See Fogerty v. Fantasy, Inc., 510 U.S. 517, 534, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994) (holding that under the Act, "[p]revailing plaintiffs and prevailing 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"). There are no rigid standards to guide the court's discretion in copyright cases, but certain equitable factors must be addressed. They include "frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case) and the need in some cases to advance considerations of compensation and deterrence." Id. at 534 n. 19, 114 S.Ct. 1023, quoting Lieb v. Topstone Indus., Inc., 788 F.2d 151, 156 (3d Cir.1986); see also Lotus Dev. Corp. v. Borland Intern., Inc., 140 F.3d 70, 73 (1st Cir.1998). The Court has cautioned that these factors may be used only so long as they are faithful to the purposes of the Copyright Act, that is, to encourage "the production of original literary, artistic, and musical expression for the good of the public."² Fogerty, 510 U.S. at 524, 114 S.Ct. 1023.

An award of attorneys' fees in this case is fully supported by the factors courts must consider in copyright cases, as well as the purposes of the Copyright Act. The court will treat each consideration in turn.

1. Equitable Factors.

a. Objective Unreasonableness.

The First Circuit has accorded the factor of "objective unreasonableness" substantial weight in the determination of whether to award attorneys' fees. See Lotus, 140 F.3d at 74 (affirming denial of fees because copyright holder's claims "were neither frivolous nor objectively unreasonable").³ To determine objective unreasonableness, a court must examine the factual and legal assertions advanced by the nonprevailing party and determine whether they were reasonable. An unreasonable claim need not be frivolous to be compensable, Matthews v. Freedman, 157 F.3d 25, 29 (1st Cir.1998), nor does a finding of unreasonableness imply culpability on the part of the losing party, as with Fed. R.Civ.P. 11. "Had Congress intended to condition the award of fees on the presence of bad faith, the statutory provision would have been surplusage." Lieb, 788 F.2d at 155. Indeed, unreasonableness is not even a requirement of a fee award. "Depending on other circumstances, a district court could conclude that the losing party should pay even if all of the arguments it made were reasonable." Matthews, 157 F.3d at 29.

Taking Yankee's copyright claim in its totality, the court finds that it was objectively unreasonable, especially as to its factual underpinnings. At both the preliminary injunction and summary judgment stages, the court noted the marked weakness of Yankee's claim that the photographs on the labels were "identical," or even nearly so. See Yankee Candle, 99 F.Supp.2d at 148-50 (ruling for Bridgewater on every allegation of copyright infringement). There were substantial dissimilarities between Bridgewater's labels and each of its Yankee analogues. The labels employed different uses of lighting, focus, color and positioning; the companies' names appeared in different places on the labels; they sometimes even depicted different subjects.⁴ No reasonable juror acting as an ordinary observer could have found the photographs to be substantially similar. Plaintiff's choice to bring such a factually weak claim, frivolous or not, is a relevant consideration in the determination of whether to award attorneys' fees. See Matthews, 157 F.3d at 29.

b. Motivation.

Another factor the Court has emphasized is the plaintiff's motivation in bringing the suit. Fogerty, 510 U.S. at 534 n. 19, 114 S.Ct. 1023. Should it appear that plaintiff's motivation was not a good faith intent to protect a valid interest, but rather a desire to discourage and financially damage a competitor by forcing it into costly litigation, an award of fees is more likely. See NLFC, Inc. v. Devcom Mid-America, Inc., 916 F.Supp. 751, 759-60 (N.D.Ill.1996) (awarding fees partly because suit motivated by bad faith attempt to harm competitor).

There is some evidence of anti-competitive motivation in Yankee's prosecution of this suit. This case was filed without notice to Bridgewater and without any meaningful pre-litigation attempt to resolve the companies' differences. The claim was not brought in an unsettled area of law, nor did it ever have a reasonable likelihood of success, as the court held early on in its denial of plaintiff's motion for a preliminary injunction. Yet Yankee appeared determined to make the litigation as damaging as possible for Bridgewater's business. In a particularly revealing instance, Yankee scheduled depositions for Bridgewater marketing personnel on the exact day of an important candle trade show, a conflict of which Yankee had previously been informed. When reminded of the conflict, Yankee's counsel did not respond by rescheduling. Rather, in a series of letters remarkable for their snide and unprofessional tone,⁵ Yanke...