2011 D e c i sion s O p inion s of the U nit e d S t a t e s C our t of Appe al s for the Thir d C ir c uit

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w . v i l l a no v a . e du/thir dc ir c uit_2011/11641 NOT PREC E DENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Nos. 10

- 2922/ 10

- 3510

URBAN OUTFITTERS, INC.; URBAN OUTFITTERS WHOLESALE, INC.; FREE PEOPLE LLC

v. BCBG MAX AZRIA GROUP, INC.; STREET BEAT SPORTSWEAR, INC.; MAX RAVE LLC, Appellants.
On Appeal from the United States District Court for the Eastern District of Pennsylvania (D. C. No. 06

- cv - 04003) District Judge: Honorable Michael M. Baylson

Sub mitted under Third Circuit LAR 34.1(a)

on April 1 1, 2011 Before: RENDELL, WEIS and ROTH, Circuit Judges

(Opinion filed: June 1, 2011 )

O P I N I O N

ROTH , Circuit Judge : This appe al requires us to consider the District Court ‟s award of attorne ys‟ fees under the “exceptional case ” provision of the Lanham Act. For the reasons expressed2

below, we affirm the judgment of the District Court and grant Urban Outfitter s p artial attorneys‟ fees for its p rior appeal in this case.
I. Background 1 Urban Outfitters, Inc., Urban Outfitters Wholesale , Inc., and Free People LLC (collectively, Urban Outfitters) filed an action against BCBG Max Azria Group, Inc. , Max Rave, LLC, and Street Beat Sportswear, Inc. (c ollectively, BCBG) for trademark infringement and rela ted claims under sections 32 and 43(a) of the Lanham Act

. See 15 U.S.C. § § 1114 , 1125 (a)

. After granting preliminary injunctive relief, the District Court eventually granted Urban Outfitters a permane nt injunction that limited BCBG‟s use of
its TRUE PEOPLE mark to avoid confusion with Urb an Outfitter s ‟ F REE PEOPLE
mark. The District Court also dismissed BCBG‟s counterclaim, which alleged that Urban
Outfitters had defrauded the Patent and Trademark Off ice, but d enied Urban Outfitter s ‟ request for “ e xceptional case ” attorneys‟ fees

. BCBG appealed the District Court‟s adverse rulings , and Urban Outfitters cross

appealed the District Court‟s denial of “exceptional case” attorneys‟ fees. We affirmed
all of the District C ou rt‟s actions except for one: W e vacated the District Cou r t‟s

“ exceptional case ” ruling and remanded with instructions to consider “exceptional case fees” in light of certain , undiscussed instances of “BCBG‟s c hicanery.” Urban Outfitter s, Inc. v. BCBG Max Azria Group, Inc. , Nos. 07

- 3882, 08

- 1472, 08

- 1655, 2009 U.S. App.
L EXIS 6586 (3d Cir. Mar. 30, 2009)

.

1 We assume familiarity with the facts, which we refer to only as necessary to explain our decision.3

On remand, b ased on record evidence of BCBG‟s intentional infringement and litigation misconduct, the District Court found the case to be exceptional and required BCBG to pay Urban Outfitters “50% of the total atto rney fees and expenses” that Urban
Outfitters had “spent in the preparation and presentation of [its] case

. ” 2 Now p ending
before the Court are BCBG‟s appeal from the Distric t Court‟s j udgment, and Urban Outfitters‟ p etition for attorneys‟ fees related to its previous appeal.
II. Discussion 3 We generally review a district court‟s award of “exceptional case” attorneys‟ fees for an abuse of discretion, but we review under a plenary standard a district court‟s interpretation of “the scope and meaning of the term „exceptional‟” as used in section 35(a) of the Lanham Act. Securacomm Consulting, Inc. v. Securacom, Inc. , 224 F.3d 273, 279 (3d Cir. 2000) ; see also Ferrero U.S.A., Inc. v. Ozak Trading, Inc. , 952 F.2d 44, 48 (3d Cir. 1991).
A. Appeal of “Exceptional Case” Award of Attorneys’ Fees
We find that the District Court , in its well

- reasoned opinion on remand , did not
abuse its discretion nor commit any error of law when it awarded Urban Outfitters “exceptional case” attorneys‟ fees under s ection 35(a) of the Lanham Act , 15 U.S.C. §

2 The District Court also sanctioned BCBG in the sum of $5,000 for asserting “non

- responsive and previously rejected arguments . . . [tha t] extended this litigation unduly” in briefing on the amount of attorneys‟ fees Urban Outfitters incurred during the litigation.

3 The District Court had subject matter jurisdiction under 15 U.S.C. § 1121 and 28 U.S.C. §§ 1331, 1338(a), as Urban Outfitt ers claimed trademark infringement under 15 U.S.C. §§ 1114, 1125. Pursuant to 28 U.S.C. § 1291, this Court has j urisdiction to hear this appeal.4

1117. Pursu ant to s ection 35(a), a court may award attorneys‟ fees to the “prevailing party” in “exceptional cases , ” such as where the infringe ment was intentional , see Ferrero , 952 F.2d at 48 , or where the losing litigant has committed some other culpable conduct, for instance, misconduct during the course of litigation , see SecuraComm , 224
F.3d at 282. See generally Green v. Fornario , 486 F.3d 100, 103

- 04 (3d Cir. 2007).
T he record of BCBG‟s “chicanery” is well

- established, as recognized by this
Court , Urban Outfitters, Inc. v. BCBG Max Azria Group, Inc. , Nos. 07

- 3882, 08

- 1472,
08

- 1655, 2009 U.S. App. LEXIS 6586 (3d Cir. M ar. 30, 2009) , and t he District Court, Urban Outfitters, Inc. v. BCBG Max Azria Group, Inc. , No. CIV.A.06

- 4003, 2010 U.S.
Dist. LEXIS 19059, (E.D. Pa. Mar. 2, 2010); Urban Outfitters, Inc. v. BCBG Max Azria Group, Inc. , No. CIV.A.06

- 4003, 2008 U.S. Dist. L EXIS 7000 (E.D. Pa. Jan. 31, 2008). The District Court‟s opinion

– the subject of this appeal

– carefully analyzed each instance of litigation misconduct that this Court identified and also noted its previous finding of BCBG‟s intentional infringement

. W e will affirm the Di strict Court‟s findings in all respects. Further, the District Court was well within its discretion in requiring
BCB G to pay 50% of Urban Outfitter s ‟ attorneys‟ fees under the “exceptional case” provision of the Lanham Act and later in sanctioning BCBG fo r filing a non

- responsive brief that extended litigation unduly

. BCBG‟s arguments that the District Court misconstrued the limits of this Court‟s remand and erred by failing to consider Urban Outfitters‟ alleged misconduct are unavailing. We remanded this case for the District Court to address an award of “exceptional case” attorneys‟ fees in light of misconduct that it had not explicitly5

addressed in ruling on that issue in the first ins tance. W e explicitly left open whether an
examination of that miscon duct would support an award of “exceptional case” attorneys‟
fees. Urban Outfitters, Inc. , 2009 U.S. App. L EXIS 6586, at *4 n.3 (“ In remandin g for further consideration of „exceptional case‟ fees, we do not suggest a particular outcome
must result. ”). Th e District Court considered the specific instances this Court had noted , and found in fact that such misconduct qualified for an award of attorneys‟ fees. The
District Court , th erefore , properly interpreted the scope of remand. We also reject BCBG‟s argu ment that the District Court was required to address whether instances of Urban Outfitters‟ purported misconduct precluded an award of “exceptional case” attorneys ‟ fees to Urban Outfitters. BCBG‟s allegations of misconduct are not supported by the record and, despite extensive litigation on the question of attorneys‟ fees, were not presented in any detail to the District Court.

B. Petition for Attorneys’ Fees on Appeal
We will grant in part Urban Outfitters‟ petition for attorneys‟ fees from the first

a ppeal on the same basis given by the District Court in finding that BCBG‟s conduct was “exceptional” for purposes of section 35(a) of the Lanham Act, 15 U.S.C. § 1117. See Urban Outfitters, Inc. , 2010 U.S. Dist. LEXIS 19059, *3

- 11. When it comes to award ing attorneys‟ fees on appeal under 15 U.S.C. § 1117, we agree with the First Circuit that “[t]he case law in this area is very sparse .” Tamko Roofing Prods. , Inc. v. Ideal Roofing Co., Ltd. , 294 F.3d 227, 230 (1st Cir. 2002). In the dearth of precedent on this point, we6

also find instructive the several factors the First Circuit weighs in determining w hether to grant attorneys‟ fees in such a case: (1) whether the appeal was on issues different from those that cau sed the trial court to find an “ excepti onal case ” ; (2) the relative strengths or weaknesses of the appellate issues; and (3) the extent to which the appeal can be said to have prolonged, without adequate jus tification, a particularly bad “ exceptional case. ”
Id. at 230.
Based on the total ity of these factors and in light of the instances of intentional infringement and litigation misconduct previously cited by this Court and the District Court, we conclude that BCBG is to pay Urban Outfitters 50% of Urban Outfitters‟ attorneys‟ fees for its p reviou s appeal

. See JCW Invs., Inc. v. Novelty, Inc. , 509 F.3d 339, 342 ( 7th Cir. 2007 ) (awarding “exceptional case ” attorneys‟ fees on appeal for “flagrant” copyright infringement and “willful” trademark infringement); Comm. for Idaho’s High
Desert v. Yo st , 92 F.3d 814, 825 (9th Cir. 1996) (awarding “exceptional case” attorneys‟ fees on appeal for intentional infringement). In responding to Urban Outfitters‟ petition for attorneys‟ fees, BCBG failed to raise any substant ive ground in opposition to the p etition. I nstead , BCBG relied solely on procedural arguments that Urban Outfitters‟ petition was untimely. As we have already granted Urban Outfitters‟ motion to file a petition for attorneys‟ fees out of time and the parties have fully litigated the iss ue of “exceptional case” attorneys‟ fees both before this
Court and the District Court , we find that additional briefing on whether to grant “exceptional case” attorneys‟ fees on appeal would only unnecessarily prolong this case.
See Urban Outfitters, Inc . v. BCBG Max Azria Group, Inc. , Order, Nos. 07

- 3882, 08

-7

1472, 08

- 1655, 10

- 2922 and 10

- 3510 (3d Cir. Dec. 21, 2010) (Rendell, Weiss and Roth) (granting motion to file petition for attorneys‟ fees).
IV . Conclusion For the foregoing reasons, we will affirm the District Court‟s award of

“ exceptional case ” attorneys‟ fees and its subsequent sanction of $5,000 against BCBG.
We further award Urban Outfitters 50% of the attorneys‟ fees result ing from its previous appeal (Nos. 07

- 3882, 08

- 1472, 08

- 1655) in this c ase
. To determine the amount of this award, we direct the parties to follow the procedure set forth in the instant Judgment. See Vasquez v. Fleming , 617 F.2d 334 , 336 (3d Cir. 1980) ( supporting this Court‟s authority

to determine the amount of attorneys‟ fees on appeal).