Opinion ID: 4539687
Heading Depth: 2
Heading Rank: 2

Heading: The Trademark Infringement Claims

Text: The ultimate problem with the district court’s finding that the trademark claims were “exceptional” under § 1117(a) is that it conflicts with the court’s earlier order granting Munchkin’s motion to amend the complaint. All of the district court’s criticisms in its fee order of Munchkin’s decision to switch from the original CLICK LOCK logo to the current CLICK LOCK logo as the basis for its 2 We recognize that the district court granted LNC its attorney’s fees attributable to both the district court proceeding and the related IPR proceeding, but in light of reversing the award of fees, we do not reach this issue of whether in the circumstances of this case § 285 permits recovery of attorney’s fees for parallel USPTO proceedings. See generally Order, Amneal Pharms. LLC v. Almirall, LLC, ___ F.3d ___ (Fed. Cir. 2020) (No. 2020-1106). Case: 19-1454 Document: 50 Page: 14 Filed: 06/08/2020 14 MUNCHKIN, INC. v. LUV N' CARE, LTD. trademark claim were objections LNC previously raised in opposing Munchkin’s motion to amend the complaint. Yet the district court granted the motion to amend, finding no grounds for prejudice, bad faith, or futility, despite LNC’s allegations that Munchkin’s actions were duplicitous. Moreover, the district court and LNC do not point to any new facts that were not considered at that time. In light of this, Munchkin cannot be faulted for litigating a claim it was granted permission to pursue. See Checkpoint Sys., 858 F.3d at 1376 (“Absent misrepresentation to the court, a party is entitled to rely on a court’s denial of summary judgment and JMOL . . . as an indication that the party’s claims were objectively reasonable and suitable for resolution at trial.” (quoting Medtronic Navigation, Inc. v. BrainLAB Medizinische Computersysteme GmbH, 603 F.3d 643, 954 (Fed. Cir. 2010))). As with the patent claim discussed above, the district court was required to make specific findings about the trademark infringement merits themselves, not merely presume the substantive weakness of the merits from Munchkin’s choice to assert a slightly different trademark logo. Munchkin’s dismissal of its claims with prejudice also does not establish, by itself, a finding that the merits were so substantively weak as to render the claims exceptional. There are numerous reasons, including Munchkin’s asserted desire to streamline the litigation, to drop a claim, not just substantive weakness. We decline to adopt a categorical rule that a party’s litigating position is presumptively so meritless as to stand out from the norm whenever it dismisses its claims with prejudice. Rather, the fee movant must still make a fact-based case for why the opposing party’s position was unreasonable. LNC presents for our consideration on appeal a comparison of its CLIK IT! logo with Munchkin’s asserted CLICK LOCK logo to demonstrate that Munchkin’s trademark infringement claim was wholly meritless. But the relevant likelihood of confusion factors require Case: 19-1454 Document: 50 Page: 15 Filed: 06/08/2020 MUNCHKIN, INC. v. LUV N' CARE, LTD. 15 consideration of many factors, not just one. A unique challenge for LNC here, given that the trademark claim was never adjudicated, is that it must not only prove through its fee motion no likelihood of confusion between its mark and Munchkin’s mark, but it must go further, and prove that Munchkin’s position is substantively unreasonable. While that task may be particularly onerous, it is not insurmountable. See, e.g., Thermolife, 922 F.3d at 1357. But here, the district court never engaged in this likelihood of confusion analysis and we think for good reason: LNC’s overall analysis was not sufficiently developed to be a basis for a fee award. Simply identifying visual differences between its CLIK IT! logo and Munchkin’s current CLICK LOCK logo is not a full enough inquiry to demonstrate that Munchkin’s trademark claim was unreasonable.