Plaintiff,

OPINION

V.

THE COUNTY OF UNION, NEW JERSEY,

Defendant.

The plaintiff, Tina Renna, who prevailed in a trademark declaratory

judgment action, seeks an award of attorneys’ fees from the defendant, the

County of Union, New Jersey. Renna brought suit against Union County

seeking a declaratory judgment that her use of the county seal on her localaccess television program did not violate trademark law. She also alleged that

the County’s assertion of trademark rights against her would constitute a First

Amendment violation. In a prior opinion, I granted summary judgment for

Renna. (Dkt. No. 32) Familiarity with that opinion is assumed.

Renna seeks attorneys’ fees under both the Lanham Act and the Civil

Rights Act. United States Magistrate Judge Michael A. Hammer issued a Reportand Recommendation awarding attorneys’ fees to Renna under the Lanham

Act, but reduced the dollar amount requested. Judge Hammer found that this

matter qualified as an “exceptional case” under the Lanham Act in that there

was an unusually large discrepancy between the strengths of the arguments of

the prevailing and losing parties. Both Renna and the County filed objections to

Judge Hammer’s Report and Recommendation. I will adopt Judge Hammer’s

Report and Recommendation with respect to the award of fees under the

Lanham Act.

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on it. The illustration is meant to portray the show as casting a critical light on

the workings of the Union County Board of Chosen Freeholders. (Opinion, 1)

Union County issued Renna two cease and desist letters asserting that her useof the Seal violated federal and state trademark law. (Id. at 6, 7) The local

television station then refused to run Renna’s show unless she signed anagreement of indemnity.

Renna brought suit in this Court seeking a declaratory judgment that the

County had no trademark rights in the seal, and that her use of the seal did

not violated trademark law. Renna also alleged that the County’s assertion of

trademark rights against her would violate her First Amendment rights.

(Opinion, 2) At the summary judgment stage, I ruled that the Seal was not

eligible for trademark protection, and that Renna’s use of the seal did not

violate trademark law. (Opinion, 15) Those findings rendered the FirstAmendment issue moot; I therefore did not rule on it. (Id. at 19)

Renna filed a motion for attorneys’ fees. She argued that she was entitled

to attorneys’ fees under both trademark law and civil rights laws, 15 U.S.C.

§ 1117(a) and 42 U.S.C. § 1988. (Dkt. No. 34) The County opposed the motion.United States Magistrate Judge Michael A Hammer issued a Report and

Recommendation to the effect that Renna should recover fees under theLanham Act. The Lanham Act provides that a prevailing party may recover

I Citations to the record will be abbreviated as follows:

“County Obj.” — Memorandum in Support of Defendant’s Objection to Magistrate’s

Report and Recommendation, Dkt. No. 41.

“Opinion” — Opinion dated May 29, 2014, Dkt. No. 32.“Renna Obj.” — Plaintiffs Objection to Magistrate’s Report and Recommendation on

Counsel Fees, Dkt. No. 32.

“R&R” -Report and Recommendation dated January 6, 2015, Dkt. No. 40.

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in an unreasonable manner.” (R&R, 12, citing Fair Wind, 764 F.3d at 315)

Judge Hammer found that there was an unusual discrepancy in the

merits of the positions taken by the County and Renna. The County, Judge

Hammer said, had asserted trademark rights that it knew, or should have

known, did not exist. (R&R, 14). It had relied on federal and state trademark

law, neither of which provide trademark protection to the “insignia” of amunicipality. (Id. at 15) Attorneys’ fees, he therefore found, were appropriate.

Judge Hammer found that the hourly rates that plaintiff’s counsel

requested were reasonable. (R&R, 17—18) He likewise found the time counsel

spent preparing the complaint and the summary judgment motion to be

reasonable. (Id. at 18—19) He found, however, that the time that counsel

expended in preparing its attorneys’ fee motion was unreasonably high. (Id. at

20—22) He recommended that plaintiff’s counsel be awarded just over one-halfof the fee they requested for the preparation of the motion for attorneys’ fees.

(Id. at 21—22)

Judge Hammer held that fees were not appropriate under the fee-shifting

provision of the Civil Rights Act, because Renna did not prevail on her

constitutional claims. 42 U.S.C. § 1988. (R&R, 10—11)

In total, plaintiff’s counsel had requested fees of $45,295 and costs of

$550.65. (R&R, 5) Judge Hammer recommended that I award counsel fees of

$39,535 and costs of $550.65.

The County and Renna have each filed an objection to Judge Hammer’s

Report and Recommendation. The County argues that this case is not

exceptional, and that therefore attorneys’ fees are not appropriate. (CountyObj., 2) Renna does not challenge Judge Hammer’s rulings with respect to the

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Discussion

I. Attorneys’ fees under the Lanham Act

I review this Report and Recommendation de novo. With respect to the

fee-shifting provision of the Lanham Act, I agree with Judge Hammer’s wellreasoned report and will adopt his recommendation. I briefly add a few points

to respond to the arguments the County raises in its objection.

a. Standard

The Lanham Act provides that a court may award “reasonable attorney

fees to the prevailing party” in “exceptional cases.” 15 U.S.C. § 11107(a). The

Act, however, does not define what is meant by an “exceptional case.” See Fair

Wind Sailing, Inc. v. Dempster, 764 F.3d 303, 314 (3d Cir. 2014). The Supreme

Court, however, recently interpreted an identical provision in the Patent Act (35U.S.C. § 285). There, the Supreme Court gave the word “exceptional” itsordinary meaning: “uncommon, rare, or not ordinary.” Octane Fitness, LLC v.

ICON Health & Fitness, Inc., 134 S.Ct. 1749, 1756 (2014). It rejected earlier,narrower case law that had required a showing of culpable conduct. Id.

The Third Circuit has held squarely that the patent-law holding of Octane

Fitness applies equally to a trademark case and has elaborated on the SupremeCourt’s definition of an “exceptional” case. Fair Wind, 764 F.3d at 3 14—15. Fair

Wind holds that a case is exceptional if it meets either of two criteria: 1) “There

is an unusual discrepancy in the merits of the positions taken by the parties,”or 2) “the losing party has litigated the case in an unreasonable manner.”

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To begin with, the U.S. Patent and Trademark Office twice denied the

County’s request to obtain protection for its Seal as a registered trademark.

(Opinion, 9) That rejection was based on a clear statutory command. The

Lanham Act provides that no trademark can be registered if it consists of the

“insignia.. .of any State or municipality.” Lanham Act Section 2(b), 15 U.S.C.

§ 1052(b). The New Jersey state trademark statute contains a similarly clear

prohibition: A mark “shall not be registered if it... (c) consists of or comprises

the...insignia of...any state or municipality.” N.J. STAT. ANN. 56:3-13.2. Renna

asserted that the mark could not be registered, which is plainly correct. The

County, in its cease and desist letter and elsewhere, asserted that it could,

which is plainly incorrect. As a matter of plain statutory language, there is an

unusually large discrepancy between the merits of Renna and the County’s

positions.

The County did make one colorable argument in favor of trademark

protection. It argued that, even if its Seal cannot be registered, it is still eligible

for protection as an unregistered mark. I ruled to the contrary. (Opinion, 15)

The County’s argument on this point, however, at least had a tinge of

plausibility (i.e., it was not definitively ruled out by plain statutory language).

But a party’s position, to expose it to an award of attorneys’ fees, need

not be wholly meritless or frivolous. Rather, Fair Wind speaks to “an unusual

discrepancy in the merits of the positions taken by the parties.” 764 F.3d at

315. I interpret that language to allow for the possibility that the losing side’s

position might have some small amount of merit. Support for that

interpretation may be found in Octane Fitness, supra, in which the Supreme

Court rejected a definition of “exceptional” that included, among other

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party to an award of attorneys’ fees.

Here, the County argued that the Seal could be protected as an

unregistered mark; Renna argued that it could not. The discrepancy between

the merits of those two positions is great enough to justify an award ofattorneys’ fees.

The County was not able to cite me any case (whether or not involving

public insignia) in which an “unregistrable mark nevertheless has been

afforded protection under Section 43(a).” (Opinion, 14) As I read the case law,“a mark is not denied registration under Section 2 because of some quirk in the

registration process; it is deemed unregistrable because it is not a suitable,

protectable mark.” Id. And the courts, including the U.S. Supreme Court, have

indeed used the Section 2 criteria for registrability to determine whether an

unregistered mark is eligible for protection under Section 43. (Id. at 14-15).

The evident purpose of the ban on registration of public symbols is to

preserve them for the use of the public. They are not fit subjects for trademark

law, which is designed to prevent marketplace confusion as to the source of

goods or services. Public insignia have other, very different purposes. 2

Even if the County had persuaded me that its Seal could be protected as

an unregistered mark, it would have faced at least one more barrier. To

constitute infringement, the use of a mark must be for a commercial purpose,

i.e., the mark must be used “in connection with the sale, offering for sale,

distribution, or advertising of any good or service.” 15 U.S.C. § 11 14(1)(a). I saw

no evidence that Renna was using the Seal for any such commercial purpose.

2 As in my summary judgment opinion, I here set aside the issue of a person’s

deceptive misuse of official insignia. (Op., 18)

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Renna filed this case as plaintiff. The County argues that awarding fees

to a prevailing plaintiff is incongruous, because it is atypical of trademark

cases. (County Obj., 3—7) I disagree.

In the usual plaintiff-versus-defendant scenario, where the trademark

holder sues a competitor for infringement, the County might have a small

point. That is, a defendant dragged into court for alleged infringement might be

entitled to an unfettered opportunity to put the plaintiff to her proofs. As the

County points out, courts who award fees typically award them to a defendant

who defeated an allegation of infringement.

This, however, is a declaratory judgment action. In a declaratory

judgment action, a party’s designation as plaintiff or defendant can be arbitrary

or even misleading. Here, the plaintiff is the alleged infringer, and the

defendant is the alleged trademark owner.

True, the County did not file this action. It was, however, the aggressor:

it sent a cease and desist letters with respect to Renna’s use of the seal.

Renna’s counsel replied, stating inter alia that the Seal was not registrable and

did not implicate commercial activity. Counsel for the County replied with a

second letter that very misleadingly implied that the trademark was now

registered (in fact it had been rejected). That letter also falsely implied that

Renna might face criminal prosecution if she continued to use the County Seal.

(Opinion, 5—7, 10—11, 11—12) The County’s threats seemingly intimidated the

television station, which demanded an agreement of indemnity as a condition

of continuing to carry Renna’s program. Under those circumstances, Renna

was not required to continue her alleged infringement (assuming the station

would have permitted it) and wait for the County to sue her.

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‘exceptionality’ of a case,”). In addition, the Supreme Court has emphasized

that courts should consider the totality of the circumstances in deciding

whether to award attorneys’ fees. Octane Fitness, 134 S.Ct. at 1756 (“District

courts may determine whether a case is exceptional in the case-by-case

exercise of their discretion, considering the totality of the circumstances.”).

Surely the relevant “circumstances” would include the events related in the

complaint. This declaratory action was a direct result of the County’s baseless

threats in its letters. Indeed, the very purpose of a cease-and-desist letter is to

set the scene for litigation if the recipient does not obey.

Finally, I note that virtually no facts were in dispute; the dispositive

issues were legal ones. (See Opinion, 3 (“The facts are largely undisputed.”)).

There was not much question as to whether the plaintiff could marshal

evidence to prove the facts she was asserting. Indeed, many of the relevantfacts were stated or implied in the County’s own letters. The County’s defense

was limited to assertion of its erroneous legal position.

For several reasons, then, I reject the argument that an award of

attorneys’ fees would not be proper because the County is a defendant.

II. Remaining Lanham Act holdings

The parties have not objected to the other elements of Judge Hammer’s

Lanham Act holdings: that counsel’s hourly rates are reasonable (R&R, 17—18);

that the time counsel spent preparing the complaint and the summary

judgment motion were reasonable (R&R, 18—19); that the time counsel reported

expending in preparing its attorneys’ fee motion should be reduced by

approximately one-half (Id. at 20—22); and that costs should be awarded (Id. at

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attorneys’ fees are not independently recoverable under the Civil Rights Act, 42U.S.C. § 1988. (R&R, 9—11) She asserts that objection, however, only in the

alternative. Because I have upheld the award of attorneys’ fees under the

Lanham Act, the issue under the Civil Rights Act is moot. See Renna Obj., 3 n.

1 (“The Plaintiff argues only that, should the District Court uphold the

objection to the recommendation that counsel fees should be paid to the

Plaintiff under 15 U.S.C. § 1117(a), the $39,535 is properly awarded as fees

under § 1988(b).”). I therefore make no ruling on whether Renna could have

recovered fees under 42 U.S.C. § 1988 if she had not received them under the

Lanham Act.

Conclusion

I will adopt Judge Hammer’s Report and Recommendation with respect

to the award of fees of $39,535.00, plus cots of $550.65 under the Lanham Act.

A separate order will issue.

Dated: April 21, 2015

Newark, New Jersey

I) j’Q

KEVIN MCNULP

United States District Judge

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