Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_02-cv-00704/USCOURTS-caed-2_02-cv-00704-3/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1125 Trademark Infringement (Lanham Act)

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1 Because oral argument will not be of material

assistance, the court orders this matter submitted on the briefs. 

E.D. Cal. L.R. 78-230(h).

2 Defendants’ counsel’s declaration submitted in support

of the motion describes that he spent 310.5 hours on the case at

a rate of $300.00 per hour, for total fees of $93,150.00. 

However, counsel explains that he agreed to “cap” his fees on the

(continued...)

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

YELLOW CAB CO. OF SACRAMENTO,

a California Corporation,

NO. CIV. S-02-0704 FCD DAD

Plaintiff,

v. MEMORANDUM AND ORDER

YELLOW CAB CO. OF ELK GROVE,

INC., a California

Corporation; and MICHAEL P.

STEINER, an individual,

Defendants.

----oo0oo----

This matter is before the court on defendants Yellow Cab

Co. of Elk Grove and Michael Steiner’s (“defendants”) motion for

attorney fees.1 By the motion, defendants seek attorney fees2 as

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2(...continued)

case at $25,000.00, and that he only received this amount from

defendants for his services on the case.

3 Plaintiff’s trademark infringement claim was the only

claim submitted to the jury, as the court granted defendants’

(continued...)

2

the prevailing party following a trial in which the jury returned

a defense verdict in this trademark infringement and unfair

competition case brought by plaintiff Yellow Cab Co. of

Sacramento (“plaintiff”). Defendants contend that an award of

fees is warranted pursuant to the Lanham Act, 15 U.S.C. 

§ 1117(a), permitting, in the court’s discretion, such an award

in “exceptional cases.” Plaintiff opposes the motion, arguing

the instant case is not “exceptional” within the meaning of

Section 1117(a), as plaintiff’s claims were not groundless or

unreasonable or pursued vexatiously or in bad faith. 

For the reasons set forth below, the court denies

defendants’ motion for attorney fees. An award of fees to a

prevailing defendant is rarely justified under the statute, and

particularly here, where the case proceeded to trial following

the Ninth Circuit’s reversal of this court’s grant of summary

judgment to defendants, the court cannot find that plaintiff’s

claims were frivolous or pursued in bad faith.

BACKGROUND

Following six days of trial, on January 18, 2007, the jury

returned a verdict in favor of defendants on plaintiff’s

trademark infringement claim, finding that “Yellow Cab. Co.” is

not a valid, protectable service mark (i.e. the term is

“generic”).3 

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3(...continued)

Federal Rule of Civil Procedure, Rule 50 motion as to plaintiff’s

unfair competition claim. (Docket #102, Minutes, filed Jan. 17,

2007.)

4 Plaintiff did not pursue these claims at trial. 

(Pretrial Conf. Order, filed Oct. 31, 2006.)

3

Previously, on May 29, 2003, the court granted defendants’

motion for summary judgment, finding as a matter of law, that the

term “Yellow Cab Co.” is generic, and thus not entitled to

trademark protection, or alternatively, even assuming that

“Yellow Cab Co.” is not generic but instead descriptive, that

plaintiff failed to proffer sufficient evidence of “secondary

meaning” so as to provide trademark protection for the term. 

(Mem. & Order at 12.) As plaintiff’s trademark infringement

claim failed, the court also found that plaintiff could not

prevail on its unfair competition claims, brought both under 

federal and state law, as such claims were “substantially

congruent” of plaintiff’s claims under the Lanham Act. (Id. at

14.) Finally, as to plaintiff’s claims for false advertising and

intentional interference with prospective business advantage, the

court found that since such claims were predicated on defendants’

alleged wrongful use of the protectable “yellow cab” mark, they

likewise failed because the court determined the mark was

generic.4 (Id. at 15.) While the court granted defendants’

motion for summary judgment in its entirety, it denied

defendants’ request for an award of attorney fees under Section

1117(a). (Id.) The court found:

[a]lthough plaintiff’s evidence in support of its

case is deficient, no evidence has been offered

by defendant[s] that would support a finding

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4

that there has been some economic coercion of

defendant[s] or objective unreasonableness of the

legal and factual issues presented. 

(Id.)

On August 9, 2005, the Ninth Circuit issued its decision in

Yellow Cab Co. of Sacramento v. Yellow Cab Co. of Elk Grove,

Inc., 419 F.3d 925 (2005), reversing this court’s grant of

summary judgment to defendants and remanding the case for trial. 

The Ninth Circuit held that plaintiff produced sufficient

evidence to raise triable issues of fact as to whether the term

“Yellow Cab Co.” was generic or alternatively, descriptive with

acquired secondary meaning. Id. at 929-30. As to the former

issue of genericness, the Ninth Circuit remarked, in dicta, that

the term “Yellow Cab Co.” appears to “answer the ‘who are you?’

rather than the ‘what are you?’ question,” thus “demonstrating

its non-genericness.” Id. at 929. As to the latter issue of

secondary meaning, in distinguishing this case from other cases

where summary judgment was properly granted in favor of the

defendants, the court noted that the record in this case as to

the term’s development of secondary meaning was “far stronger” in

that plaintiff produced “direct evidence (e.g. evidence of

customer confusion and advertising data . . .) sufficient to

present a genuine issue of material fact for trial.” Id. at 930

n. 3.

It is against this back-drop that the court considers

defendants’ second request for attorney fees under Section

1117(a).

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5 Citing out of circuit authority, defendants contend

that also relevant to the determination are “equitable

considerations” and the need to “deter” the plaintiff. The Ninth

Circuit has not expressly considered these factors, and thus, the

court likewise does not do so here. Id.

5

STANDARD

Pursuant to section 35(a) of the Lanham Act, the court may

award reasonable attorney fees to the prevailing party in

“exceptional cases.” 15 U.S.C. § 1117(a). This provision was

designed, in part, to protect innocent defendants “against

unfounded suits brought by trademark owners for harassment and

the like.” S. Rep. No. 93-1400, 93rd Cong., 2d Sess., reprinted

in 1974 U.S. Code Cong. & Ad.News 7132, 7136. Thus, the Ninth

Circuit has held that a case is “exceptional” for the purposes of

recovering a prevailing defendant’s attorney fees only if the

plaintiff’s claim is “either groundless, unreasonable, vexatious,

or pursued in bad faith.” Cairns v. Franklin Mint Co., 292 F.3d

1139, 1156 (9th Cir. 2002) (emphasis in original).5

 Not

surprisingly, under this standard, defendants are “rarely”

awarded attorney fees in trademark infringement cases. Banff,

Ltd. v. Colberts, Inc., 810 F. Supp. 79, 80 n. 2 (S.D.N.Y. 1992)

(citing Larner, Award of Attorneys’ Fees Under § 35(a) of Lanham

Act, 82 A.L.R. Fed. 143 (1991)). Ultimately, the decision to

award fees rests in the court’s discretion. Gracie v. Gracie,

217 F.3d 1060, 1071 (9th Cir. 2000).

ANALYSIS

Defendants argue that an award of attorney fees is justified

in this case because plaintiff pursued to trial “groundless and

unreasonable” claims. Defendants contend plaintiff pressed its

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claims without citing legal authority for its positions and

without presenting supporting evidence. In that latter regard,

defendants point out that plaintiff did not present expert

testimony at trial, and defendants claim plaintiff’s witnesses

testified inconsistent to plaintiff’s theories of the case. 

The court does not agree with defendants’ contentions. 

First, the court cannot find that plaintiff pursued baseless

claims in this action when the Ninth Circuit reversed this

court’s grant of summary judgment to defendants and remanded this

case for trial. Where plaintiff successfully withstood (after

appeal) summary judgment, a finding of frivolousness cannot be

made. In that regard, the cases relied on by defendants for an

award of fees are distinguishable. Mattel, Inc. v. Walking

Mountain Productions, 353 F.3d 792, 816 (9th Cir. 2003); Cairns,

292 F.3d at 1156; Ale House Management, Inc. v. Raleigh Ale

House, Inc., 205 F.3d 137, 144 (4th Cir. 2000). In each of these

cases, attorney fees were granted to the prevailing defendants

following the award of summary judgment to the defendants. 

Plaintiff cites no case wherein fees were awarded to a

prevailing defendant following a jury trial. In fact, more

often, attorney fee requests are denied in such circumstances. 

See e.g. Gracie, 217 F.3d at 1071-72 (affirming denial of the

prevailing defendant’s attorney fees request following a jury

trial where defendant supported his request with only “conclusory

statements regarding [the counter-claimant’s] supposed bad

faith”); Banff, 810 F. Supp. at 81 (denying the prevailing

defendant’s request for attorney fees following a jury trial

because plaintiff’s action “proceeded to trial” on a “properly

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6 Contrary to defendants’ suggestion, plaintiff was not

obligated to offer expert testimony to support its case;

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plea[d] cause of action for willful trademark infringement”). In

only one case reviewed by the court did a prevailing defendant

succeed in a fees motion under Section 1117(a) following a trial. 

Vital Pharmaceuticals, Inc. v. American Body Building Products,

LLC, 2007 WL 624329 (S.D. Fla. Feb. 23, 2007). Although, in

Vital, the award of fees was made following a bench, not jury

trial. Moreover, Vital is clearly distinguishable on the facts

as there, after serving as the trier of fact, the court ruled

that fees were warranted because the plaintiff “could not satisfy

even one of the elements of a valid trade dress claim, and its

case suffered from severe credibility problems and a lack of

convincing evidence.” Id. at *9. Ultimately, the court found

that the plaintiff’s case “appeared as nothing but a thinlyveiled effort to stifle legitimate competition.” Id. The court

cannot make such findings in this case on behalf of the jury, and

even if it could, the court would not find similarly based on the

evidence presented by plaintiff at trial. 

Indeed, it is particularly noteworthy that even following

this court’s grant of summary judgment to defendants, it did not

award fees to defendants under Section 1117(a), finding instead

that while plaintiff’s evidence may have been insufficient to

withstand summary judgment, plaintiff’s claims were nonetheless

objectively reasonable. (Mem & Order, filed May 29, 2003, at

15.) Nothing about the trial changes this court’s view of

plaintiff’s claims.6 

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6(...continued)

additionally, that some of plaintiff’s witnesses may not have

testified in direct conformity with plaintiff’s theory of the

case is not uncommon in an adversarial proceeding. 

8

Defendants try to emphasize that the court ruled in their

favor on their Rule 50 motion as to plaintiff’s unfair

competition claim. However, that ruling does not support a

finding that plaintiff’s unfair competition claim was

“groundless.” While the court found that plaintiff did not

proffer sufficient evidence to submit its “passing off” theory

for this claim to the jury, it was nonetheless a viable theory

under the relevant case law. As such, the court’s Rule 50 ruling

is not a basis for granting fees to defendants.

As to defendants’ second argument, that plaintiff wholly

lacked evidentiary support for its case at trial, the court

disagrees not only based on its recollection of the evidence

presented at trial but also considering the Ninth Circuit’s

review of the evidence presented by plaintiff in opposition to

defendants’ motion for summary judgment. The Ninth Circuit did

not only hold that the evidence was sufficient to raise triable

issues of fact for trial, but remarked that the evidence may be

sufficient to find non-genericness and was “stronger” than other

cases on the issue of secondary meaning. Yellow Cab Co. of

Sacramento, 419 F.3d at 929-30. While the jury found otherwise,

the Ninth Circuit’s decision certainly supports a finding that

the claims pressed at trial were not “wholly lacking” in

evidentiary support.

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Alternatively, defendants maintain that an award of fees is

warranted in this case because of “plaintiff’s litigation

actions,” which “increased the fees” incurred by defendants. 

Defendants cite as the sole support for this argument,

plaintiff’s motion in limine to exclude defendants’ expert

witness. Defendants assert that in this motion, plaintiff made

groundless arguments, failing to cite controlling law; such

facts, defendants contend, support an award of fees under Ale

House. 205 F.3d at 144. Ale House is distinguishable. There,

following an award of summary judgment to the defendant, the

court awarded the defendant attorney fees under Section 1117(a)

on the grounds the plaintiff “(1) alleged erroneous facts due to

the reliance on a form complaint; (2) failed to tailor its

factual allegations to fit [the] case; (3) withdrew a federal

anti-dilution claim after [the defendant] pointed out its

inapplicability; and (4) is a successful company that used its

resources to hinder defendant’s business venture.” Id. Similar

facts are not present here. 

Plaintiff’s primary basis for moving to exclude defendants’

expert’s testimony was the Ninth Circuit’s decision which

directed this court on remand to “take into consideration the

territorial scope of the common law trademark rights in deciding

what evidence is relevant.” Yellow Cab Co. of Sacramento, 419

F.3d at 930 n. 4. Based on this order, plaintiff appropriately

brought the motion in limine. While this court ultimately denied

plaintiff’s motion, finding defendants’ expert’s testimony in

compliance with the Ninth Circuit’s direction to consider the

territorial or “local” scope of the term “yellow cab” in the

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specific geographic area, its ruling does not render plaintiff’s

motion “baseless.” Plaintiff supported its arguments with

reliance on the Ninth Circuit’s decision and other pertinent

authorities. Although this court found the arguments

unpersuasive, they nonetheless were based in law and supported by

a reasonable interpretation of the facts. Therefore, the court

cannot find that plaintiff’s motion in limine was groundless or

pursued vexatiously. 

As this court found previously, in its May 29, 2003 summary

judgment order, there is no evidence in this case of bad faith

conduct by plaintiff in bringing the instant suit against

defendants. (Mem. & Order at 15-16.) While defendants continue

to insinuate that plaintiff engaged in such conduct, their

conclusory statements regarding plaintiff’s supposed bad faith

are insufficient to carry defendants’ burden to demonstrate

entitlement to an award of attorney fees. Gracie, 217 F.3d at

1071. Where defendants “fai[l] to cite any specific record

evidence to support [their] speculation regarding [plaintiff’s]

state of mind,” an award of fees is clearly not warranted. Id. 

Defendants have made no showing of any improper purpose by

plaintiff in filing this action. 

As such, considering the Lanham Act’s requirement of

“exceptional circumstances,” as interpreted “narrowly” by the

Ninth Circuit, see id., the court denies defendants’ motion for

attorney fees under Section 1117(a). Defendants have not

demonstrated that plaintiff pursued this action to trial on

groundless or unreasonable claims or in bad faith.

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CONCLUSION

For the foregoing reasons, defendants’ motion for attorney

fees under Section 1117(a) is denied.

IT IS SO ORDERED. 

DATED: March 30, 2007.

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