The federal statutes that govern copyright infringement cases provide that “Except as otherwise provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party as a part of costs.” (17 U.S.C. 505) Under this provision, either the defendant or the plaintiff may recover their attorney fees if they are the prevailing party. Some courts have narrowly construed the provision to exclude the fees of experts retained by their attorneys to help them prevail. In cases where the plaintiff prevails with regard to some but not all of its claims, it will generally be allowed to recover some but not all of its attorney fees. The same does not appear to apply to defendants that are partially successful. However, awarding attorney fees up to the court’s discretion, and the court has a large measure of freedom to award fees or not based on its assessment of the overall equities of the case.
Unlike an award of attorney fees in patent and trademark cases, there is no requirement in a copyright case that fees be awarded only under “exceptional” circumstances. So, while fraudulent or unconscionable behavior on the part of the losing party will weight heavily toward an award of attorney fees, such behavior is not necessary. In that regard, it has been held that the purpose of the award is to encourage copyright holders to protect their rights. Still, in a cases where both parties acted in good faith and the matter ultimately turns on complex or novel issues of law, the court may decline to award fees.
The information contained in this blog is not legal advice and should not be relied on as such. For legal advice or for answers to specific questions, please contact the blog's author.
Wednesday, November 25, 2009
Thursday, November 19, 2009
Attorney Fee Recovery in Trademark Cases
The federal statutes governing trademark infringement cases contain provisions at 17 U.S.C. § 1117 that provide for the recovery of attorney fees under various circumstances. Under the first such provision, § 1117(a), defendants who violate section 1125(a), or willfully violate section 1125(c) may be charged with the plaintiff’s attorney’s fees “in exceptional cases.”
A 1125 (c) violation is, among other things, the use in commerce of names, symbols, devices, misleading descriptions or misleading representations that are likely to cause confusion as to the ownership, affiliations, origins, properties, and identities of goods or services. A 1125(c) violation occurs when the value of a well established trademark is damaged (the term of art is “diluted”) by someone else’s use of an impermissibly similar mark. The above descriptions are over simplifications, and the question of whether a trademark has been infringed can be a close one. However, cases where attorney fees are allowed under § 1117(a) are not the close ones. They are cases where strings of adjectives such as “deliberate, fraudulent, unconscionable, malicious and wanton” apply to defendant’s actions. Situations where the court has already issued an injunction against a defendant to stop infringing behavior, and the defendant persisted in the infringement, are also good candidates for attorney fee awards. Prevailing defendants can be awarded fees in cases where plaintiff’s claims were frivolous.
Section § 1117(b) sets forth circumstances where an assessment of damages under 1117(a) should automatically, unless there are extenuating circumstances, include treble damages and attorney fees. Those are circumstances where the defendant intentionally uses a counterfeit trademark or provides goods or services that enable the use of a counterfeit trademark with the intent that the goods and services be used that way.
Where attorney fees are recoverable under this statute, the court will review submitted fees for reasonableness. The court might consider the ability of the party to pay when determining the amount of attorney fees to award.
The information contained in this blog is not legal advice and should not be relied on as such. For legal advice or for answers to specific questions, please contact the blog's author.
A 1125 (c) violation is, among other things, the use in commerce of names, symbols, devices, misleading descriptions or misleading representations that are likely to cause confusion as to the ownership, affiliations, origins, properties, and identities of goods or services. A 1125(c) violation occurs when the value of a well established trademark is damaged (the term of art is “diluted”) by someone else’s use of an impermissibly similar mark. The above descriptions are over simplifications, and the question of whether a trademark has been infringed can be a close one. However, cases where attorney fees are allowed under § 1117(a) are not the close ones. They are cases where strings of adjectives such as “deliberate, fraudulent, unconscionable, malicious and wanton” apply to defendant’s actions. Situations where the court has already issued an injunction against a defendant to stop infringing behavior, and the defendant persisted in the infringement, are also good candidates for attorney fee awards. Prevailing defendants can be awarded fees in cases where plaintiff’s claims were frivolous.
Section § 1117(b) sets forth circumstances where an assessment of damages under 1117(a) should automatically, unless there are extenuating circumstances, include treble damages and attorney fees. Those are circumstances where the defendant intentionally uses a counterfeit trademark or provides goods or services that enable the use of a counterfeit trademark with the intent that the goods and services be used that way.
Where attorney fees are recoverable under this statute, the court will review submitted fees for reasonableness. The court might consider the ability of the party to pay when determining the amount of attorney fees to award.
The information contained in this blog is not legal advice and should not be relied on as such. For legal advice or for answers to specific questions, please contact the blog's author.
Sunday, November 15, 2009
Attorney Fees in Patent Infringement Cases
The federal statutes governing patent infringement cases include a section that reads “The court in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U.S.C. 285. This should be of great interest to anyone embroiled in, or anticipating, a patent infringement case. Parties to such actions should carefully plan their complaints, counterclaims and/or defenses to, whenever possible, increase the chances of making a successful claim under the “exceptional case” provision of the statute—and to decrease the chances of their opponent making a successful claim under that provision.
That said the “exceptional case” standard is a difficult one to meet. It must be shown that the equities are such that it would be “grossly unjust” or “unconscionable” for the prevailing party to bear the litigation burdens normally born by prevailing parties in under the American Rule (i.e. the principle in US courts that each party generally bears their own litigation costs).
Exceptional cases exist where the trial court, in its discretion, determines that a plaintiff initiated unjustified litigation, or where the litigation posture of one of the parties constituted a fraud on the Patent and Trademark Office. Although circumstances that justify an award of attorney fees under this statute often overlap with circumstances that might draw other statutory or common law sanctions, the courts do not consider awards of attorney fees under the above statute to be punitive in nature. Rather, the courts consider such awards to be compensatory.
Where attorney fees are recoverable under this statute, other litigation expenses, such as expert’s fees, are also recoverable. The court will review submitted fees for reasonableness.
The information contained in this blog is not legal advice and should not be relied on as such. For legal advice or for answers to specific questions, please contact the blog's author.
That said the “exceptional case” standard is a difficult one to meet. It must be shown that the equities are such that it would be “grossly unjust” or “unconscionable” for the prevailing party to bear the litigation burdens normally born by prevailing parties in under the American Rule (i.e. the principle in US courts that each party generally bears their own litigation costs).
Exceptional cases exist where the trial court, in its discretion, determines that a plaintiff initiated unjustified litigation, or where the litigation posture of one of the parties constituted a fraud on the Patent and Trademark Office. Although circumstances that justify an award of attorney fees under this statute often overlap with circumstances that might draw other statutory or common law sanctions, the courts do not consider awards of attorney fees under the above statute to be punitive in nature. Rather, the courts consider such awards to be compensatory.
Where attorney fees are recoverable under this statute, other litigation expenses, such as expert’s fees, are also recoverable. The court will review submitted fees for reasonableness.
The information contained in this blog is not legal advice and should not be relied on as such. For legal advice or for answers to specific questions, please contact the blog's author.
Wednesday, November 4, 2009
Business Protections in Consumer Protection Laws
Not all consumer protection laws protect only non-commercial consumers. Some also protect businesses and, therefore, present an avenue for collecting attorney fees in situations where no such relief would be available in a straight forward breach of contract action. An example of this is found in New Jersey in a grouping of statutes titled “Frauds, Etc., in Sales or Advertisements of Merchandise,” which is more commonly referred to as the “Consumer Fraud Act,” or “CFA.
Among other things, the CFA provides, a cause of action for “unconscionable commercial practice, deception fraud, false pretense, false promise, misrepresentation, or the knowing concealment, suppression or omission of any material fact with the intent that others rely on such concealment suppression or omission, in connection with the sale or advertisement of any merchandise or real estate ….” Notably, unlike a cause of action for common law fraud, reliance on the deceptive behavior need not be shown before recovering damages under the “CFA.”
A prevailing CFA plaintiff (which includes a defendant that raises a CFA action as a counterclaim) will be awarded triple actual damages and costs of suit, including attorney fees. This can be good news for businesses as well as individual consumers because New Jersey state courts have held that the CFA does not exclude business from the protected class. Rather, the key determination as to a plaintiff’s ability to seek relief under the CFA rests on whether the transaction complained about goes to the sale or advertisement of merchandise or real estate, and whether the thing sold was offered for sale to the general public. In that regard, the purchase of a new franchise (but not of an ongoing business) and renovation services purchased by businesses have been found to fall under the CFA.
The take away point, is that business looking at a breach of contract action, where the contract does not provide for an award of attorney fees, should check to see if they can take advantage of the consumer protection law of their jurisdiction. If they can get into federal court (on diversity jurisdiction) they should see how the statute is interpreted in both the state and federal courts, because the state courts and federal courts will sometimes interpret the state’s laws differently. For example, federal courts in New Jersey are less likely than state courts to allow business to bring an action under the CFA.
The information contained in this blog is not legal advice and should not be relied on as such. For legal advice or for answers to specific questions, please contact the blog's author.
Among other things, the CFA provides, a cause of action for “unconscionable commercial practice, deception fraud, false pretense, false promise, misrepresentation, or the knowing concealment, suppression or omission of any material fact with the intent that others rely on such concealment suppression or omission, in connection with the sale or advertisement of any merchandise or real estate ….” Notably, unlike a cause of action for common law fraud, reliance on the deceptive behavior need not be shown before recovering damages under the “CFA.”
A prevailing CFA plaintiff (which includes a defendant that raises a CFA action as a counterclaim) will be awarded triple actual damages and costs of suit, including attorney fees. This can be good news for businesses as well as individual consumers because New Jersey state courts have held that the CFA does not exclude business from the protected class. Rather, the key determination as to a plaintiff’s ability to seek relief under the CFA rests on whether the transaction complained about goes to the sale or advertisement of merchandise or real estate, and whether the thing sold was offered for sale to the general public. In that regard, the purchase of a new franchise (but not of an ongoing business) and renovation services purchased by businesses have been found to fall under the CFA.
The take away point, is that business looking at a breach of contract action, where the contract does not provide for an award of attorney fees, should check to see if they can take advantage of the consumer protection law of their jurisdiction. If they can get into federal court (on diversity jurisdiction) they should see how the statute is interpreted in both the state and federal courts, because the state courts and federal courts will sometimes interpret the state’s laws differently. For example, federal courts in New Jersey are less likely than state courts to allow business to bring an action under the CFA.
The information contained in this blog is not legal advice and should not be relied on as such. For legal advice or for answers to specific questions, please contact the blog's author.
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