Court Awards Exceptional Case Fees for Related TTAB Proceeding

Posted on April 18, 2008 by R. David Donoghue
Hickory Farms, Inc. v. SnackmastersSnackmasters, Inc., No. 05 C 4541, Slip Op. (N.D. Ill. Apr. 2, 2008) (Kennelly, J.).

Judge Kennelly awarded defendant approximately $350,000 in attorney's fees, costs and interest, based upon defendant's fee petition. The Court previously held that plaintiff's “Beef Stick” and “Turkey Stick” marks were generic and ordered their cancellation -- click here for more on this case in the Blog's archives. The Court also denied plaintiff's motion for reconsideration of the genericness decision and held that defendant had a right to its reasonable attorney's fees and costs because the case was exceptional. There were several noteworthy rulings in the opinion:

  • The Court held that defendant was owned not just its fees from the litigation, but also from the related TTAB because the substantive work and research in the earlier TTAB proceeding formed the core of defendant's successful motion for summary judgment of genericness. It did not matter that defendant initiated the TTAB proceeding.

  • The Court awarded defendant its attorney's fees for time spent searching the internet for third party uses of “Beef Stick” and “Turkey Stick.” Internet searching was not clerical work because review of each use of the marks required legal analysis. Furthermore, the Court relied on the fruits of that research in granting summary judgment.

  • The Court denied attorney's fees for work related to the Seventh Circuit's mediation program. The Seventh Circuit appeal was a separate proceeding and, therefore, it was not appropriate for the Court to award fees for work done that did not further this case, as the work in the TTAB proceeding did.

  • The Court held that an administrative charge of 4% of an attorney's billings was reasonable and awarded it as part of attorney's fees, as opposed to costs. Defendant's counsel used the 4% administrative charge as a standard billing practice, instead of tracking long-distance telephone, copying, faxing and other incidental charges for each client and case. The Court held that 4% was a modest amount and was an “appropriate device” for estimating fees without incurring substantial overhead for monitoring those fees precisely.

 

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Rule 11: You Must Follow the Procedures

Posted on October 17, 2006 by R. David Donoghue

Big Dipper, Inc. v. Wells' Dairy, Inc., No. 05 C 5395, 2006 WL 2711843 (N.D. Ill. Sept. 20, 2006) (Manning, J.).

In this trademark action, Judge Manning denied defendant's Rule 11 motion without considering it on the merits because defendant failed to comply with Rule 11's "safe harbor period."  Rule 11(c) requires that before filing a Rule 11 motion, the party serve the motion on its opponent and give the opponent at least 21 days to correct the issues raised in the motion.  Defendant's Rule 11 motion was also defective because defendant combined its Rule 11 motion with its response to plaintiff's motion to strike. As the Court noted, a Rule 11 motion must be filed as a separate, standalone motion. 

Defendant had ample opportunity to notify plaintiff of the Rule 11 issue. Plaintiff filed a motion to dismiss defendant's counterclaims.  The counterclaims challenged the validity of plaintiff's marks.  In response to the counterclaims, plaintiff served defendant a proposed motion to strike them.  Defendant responded to the proposed motion with a faxed letter objecting to the motion and asking plaintiff not to file it, but did not mention Rule 11 in the letter. 

Plaintiff then filed the motion to strike.  Defendant did not file a separate response to plaintiff's motion, but instead addressed plaintiff's substantive arguments in its motion to strike and in its reply to plaintiff's responsive briefing.  The Court held that, in addition to failing to meet the Rule 11(c) safe harbor requirement, defendant's motion was also defective because it was not filed separate from its response to plaintiff's underlying motion to strike.

In addition to Rule 11 issues, the Court's opinion also considered substantive trademark issues.  Specifically, the Court considered whether it lacked jurisdiction over defendant's invalidity counterclaim because defendant had not exhausted its invalidity challenge within the PTO (defendant had a pending cancellation proceeding before the TTAB).  The Court held that where the unexhausted validity issues are related to a claim with independent federal jurisdiction (in this case, plaintiff's trademark infringement claims) both the infringement and the validity challenge should be heard together.

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