Court Opinion

ID: 217942
Source: CourtListenerOpinion
Date Created: 2011-06-02 16:57:24+00
Date Added: 2024-06-11T17:28:34.438142
License: Public Domain

NOT PRECEDENTIAL

                       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

                       Submitted under Third Circuit LAR 34.1(a)
                                   on April 11, 2011

                 Before: RENDELL, WEIS and ROTH, Circuit Judges

                             (Opinion filed: June 1, 2011)

                                     OPINION

ROTH, Circuit Judge:

      This appeal requires us to consider the District Court‟s award of attorneys‟ fees

under the “exceptional case” provision of the Lanham Act. For the reasons expressed

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below, we affirm the judgment of the District Court and grant Urban Outfitters partial

attorneys‟ fees for its prior appeal in this case.

I. Background1

       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. (collectively, BCBG) for trademark

infringement and related 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 permanent injunction that limited BCBG‟s use of

its TRUE PEOPLE mark to avoid confusion with Urban Outfitters‟ FREE PEOPLE

mark. The District Court also dismissed BCBG‟s counterclaim, which alleged that Urban

Outfitters had defrauded the Patent and Trademark Office, but denied Urban Outfitters‟

request for “exceptional 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 Court‟s actions except for one: We vacated the District Court‟s

“exceptional case” ruling and remanded with instructions to consider “exceptional case

fees” in light of certain, undiscussed instances of “BCBG‟s chicanery.” Urban Outfitters,

Inc. v. BCBG Max Azria Group, Inc., Nos. 07-3882, 08-1472, 08-1655, 2009 U.S. App.

LEXIS 6586 (3d Cir. Mar. 30, 2009).

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

                                                2
       On remand, based 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 attorney fees and expenses” that Urban

Outfitters had “spent in the preparation and presentation of [its] case.”2 Now pending

before the Court are BCBG‟s appeal from the District Court‟s judgment, and Urban

Outfitters‟ petition 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 section 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 . . . [that] extended this litigation
unduly” in briefing on the amount of attorneys‟ fees Urban Outfitters incurred during the
litigation.
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         The District Court had subject matter jurisdiction under 15 U.S.C. § 1121 and 28
U.S.C. §§ 1331, 1338(a), as Urban Outfitters claimed trademark infringement under 15
U.S.C. §§ 1114, 1125. Pursuant to 28 U.S.C. § 1291, this Court has jurisdiction to hear
this appeal.

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1117. Pursuant to section 35(a), a court may award attorneys‟ fees to the “prevailing

party” in “exceptional cases,” such as where the infringement 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).

       The 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. Mar. 30, 2009), and the 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. LEXIS 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. We will affirm the District Court‟s findings

in all respects. Further, the District Court was well within its discretion in requiring

BCBG to pay 50% of Urban Outfitters‟ attorneys‟ fees under the “exceptional case”

provision of the Lanham Act and later in sanctioning BCBG for 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 explicitly

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addressed in ruling on that issue in the first instance. We explicitly left open whether an

examination of that misconduct would support an award of “exceptional case” attorneys‟

fees. Urban Outfitters, Inc., 2009 U.S. App. LEXIS 6586, at *4 n.3 (“In remanding for

further consideration of „exceptional case‟ fees, we do not suggest a particular outcome

must result.”). The 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, therefore, properly interpreted the scope of remand. We also reject

BCBG‟s argument 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

appeal 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 awarding

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, we

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also find instructive the several factors the First Circuit weighs in determining whether to

grant attorneys‟ fees in such a case:

       (1) whether the appeal was on issues different from those that caused the
       trial court to find an “exceptional 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 justification, a particularly
       bad “exceptional case.”

Id. at 230.

       Based on the totality 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 previous 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. Yost, 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 substantive ground in opposition to the petition. Instead, 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 issue 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-

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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 resulting from its previous

appeal (Nos. 07-3882, 08-1472, 08-1655) in this case. 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).

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