United States District Court, W.D. Missouri, Western Division
ORDER AND OPINION DENYING PARTIES' CROSS MOTIONS
FOR ATTORNEY FEES AND COSTS
PHILLIPS, JUDGE UNITED STATES DISTRICT COURT.
Healthmate International, LLC initiated this suit, asserting
three claims of copyright infringement against Rampant Lion
LLC and one of its co-owners, Timothy French. Defendants
asserted several counterclaims, including one for false
advertising under the Lanham Act. Plaintiff prevailed on two
of its three copyright claims against Rampant Lion and on the
Lanham Act counterclaim. Rampant Lion prevailed on one of the
three copyright claims, and French prevailed on all three of
the copyright claims asserted against him. Now pending are
the parties' cross motions for attorney fees and costs,
in which the parties contest who prevailed and the extent to
which each party engaged in inappropriate conduct during the
litigation. Both motions, (Doc. 255 and Doc. 262), are
and Rampant Lion are in the business of selling TENS units.
“TENS” stands for Transcutaneous Electrical Nerve
Stimulation, and generally speaking TENS units administer
electrical current to portions of the body in order to
relieve pain. Healthmate has a Certificate of Registration
for three copyrights for graphical displays used on TENS
units it sells. All three displays contain a series of
picture-based icons that symbolize the TENS unit's
various functions. Healthmate alleged that each of the
Defendants infringed on all three copyrights by copying them
for use on TENS units sold by Rampant Lion.
operates a website through which it sells its products, and
its website described some of its products as “FDA
approved.” As the Court explained in its Order on the
summary judgment motions, “[g]iven the technical
meanings accorded to the phrases, Plaintiff's products
are ‘FDA cleared' but not ‘FDA approved.'
Thus, it was incorrect to say that Plaintiff's products
were FDA approved, at least as that phrase is understood in
terms of FDA regulations and procedures.” (Doc. 176, p.
This false statement gave rise to Defendants'
counterclaim under the Lanham Act.
Lanham Act and the Copyright Act each have separate
fee-shifting provisions, and both are at issue. For ease of
discussion, the Court will address the Lanham Act first.
Additional facts about the claims will be discussed as well.
Rampant Lion's Lanham Act
relies on its victory on Rampant Lion's Lanham Act
counterclaim to justify its fee request. The Lanham Act
provides that “[t]he court in exceptional cases may
award reasonable attorney fees to the prevailing
party.” 17 U.S.C. § 1117(a). There is no question
that Healthmate was the prevailing party on Rampant
Lion's Lanham Act claim; the question is whether this was
an “exceptional case.” Interpreting similar
language in the patent statutes, the Supreme Court held that
an exceptional case is “one 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. District courts may determine whether
a case is ‘exceptional' in the case-by-case
exercise of their discretion, considering the totality of the
circumstances.” Octane Fitness, LLC v. ICON Health
& Fitness, Inc., 134 S.Ct. 1749, 1756 (2014). Before
Octane Fitness addressed the Patent Act's fee
provision, the Eighth Circuit held (in a case involving the
Lanham Act) that “[a]n exceptional case is one where
the plaintiff's claim is groundless, unreasonable,
vexatious, or pursued in bad faith.” Blue Dane
Simmental Corp. v. American Simmental Ass'n, 178
F.3d 1035, 1043 (8th Cir. 1999) (quotation omitted). In
addition, “[b]ecause the statute states that the court
‘may' award attorney's fees in exceptional
cases, the district court retains discretion as to the award
of attorney's fees even if it finds a case to be
exceptional.” First Nat'l Bank in Sioux Falls
v. First Nat'l Bank S. Dakota, 679 F.3d 763, 771
(8th Cir. 2012).
argues that this was an exceptional Lanham Act case because
Rampant Lion had no evidence of customer confusion, the
Lanham Act claim was asserted as a litigation tactic solely
to increase the cost of litigation, and Rampant Lion
unreasonably rejected Healthmate's settlement offers.
Rampant Lion contends that the fact that it lost the Lanham
Act claim does not make it frivolous, and there was nothing
exceptional justifying imposition of fees and costs. The
Court agrees with Rampant Lion.
summary judgment ruling the Court held that Healthmate's
statement that its products were “FDA approved”
was inaccurate, so to that extent there was a basis for
Rampant Lion's claim. Rampant Lion had no evidence of
customer confusion, but it sought to avoid the need for it by
contending - as permitted by such cases as United Indus.
Corp. v. Clorox Co., 140 F.3d 1175, 1180 (8th Cir. 1998)
- that Healthmate's statement that its TENS units were
“FDA approved” was literally false. The Court
rejected this characterization of Healthmate's
representation, and held that the general public would not
necessarily and unavoidably understand Healthmate's
statement to be false. (Doc. 176, pp. 12-13.) Thus, summary
judgment was granted because (1) the Court held that Rampant
Lion had to present evidence of customer deception and (2)
Rampant Lion conceded that it had no evidence of customer
fact that the Court disagreed with Rampant Lion's
analysis does not make the case exceptional; to hold
otherwise would make every case in which a party loses
“exceptional” and destroy the distinction between
the Lanham Act's fee provision and other fee-shifting
provisions that merely require that a party prevail to
recover fees. Similarly, the fact that Healthmate had to
participate in the discovery process did not make this case
extraordinary. Finally, the Court declines Healthmate's
invitation to consider Defendants' unwillingness to
settle. Even if the parties' settlement negotiations
could be considered, the relevance of such facts are dubious:
the settlement discussions involved a myriad of claims,
including Healthmate's copyright claims, and it appears
that Healthmate obtained less relief at trial than it would
have received in any of its settlement demands, which seems
to vindicate Defendants' refusal to settle.
Defendants' rejection of a global settlement in this case
does not demonstrate that the Lanham Act claim was
prevailed on the Lanham Act claim, but there was nothing
extraordinary about the claim that justifies imposition of
fees and costs. Healthmate's request for fees and costs
under the Lanham Act is therefore denied.