Court Opinion

ID: 3212494
Source: CourtListenerOpinion
Date Created: 2016-06-13 15:00:34.918989+00
Date Added: 2024-06-11T12:05:47.483201
License: Public Domain

15-2557
      Penshurst Trading Inc. v. Zodax

                                         UNITED STATES COURT OF APPEALS
                                             FOR THE SECOND CIRCUIT

                                                SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER
FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT
FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC
DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE
A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

             At a stated term of the United States Court of Appeals for the Second Circuit, held at
      the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
      on the 13th day of June, two thousand sixteen.

      PRESENT: GERARD E. LYNCH,
               ROBERT D. SACK,
                               Circuit Judges,
               J. GARVAN MURTHA
                               District Court Judge.*

      ———————————————————————
      PENSHURST TRADING INC.,
      DBA JULISKA
                         Plaintiff—Counter-Defendant—Appellee,

                                        v.                                           No. 15-2557

      ZODAX L.P.,
                 Defendant—Counter-Claimant—Appellant.
      ———————————————————————
      FOR APPELLANT:                             MICHAEL HARRIS (Steven C. Sereboff, M. Kala
                                                 Sarvaiya, on the brief), SoCal IP Law Group LLP,
                                                 Westlake Village, CA.

      FOR APPELLEE:                              EDWARD T. COLBERT (Jonathan W. Thomas, on the
                                                 brief), Kenyon & Kenyon LLP, Washington, DC.

                *
               The Honorable J. Garvan Murtha, of the United States District Court for the
      District of Vermont, sitting by designation.
       Appeal from the United States District Court for the Southern District of New

York (Richard J. Sullivan, J.).

       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment of the district court is AFFIRMED.

       Appellant Zodax appeals from the district court’s denial of its motion for

attorney’s fees pursuant to the fee-shifting provisions of the Copyright Act and the

Lanham Act. Zodax argues that the district court abused its discretion in holding that

Appellee Penshurst’s copyright, trademark, and trade dress claims, which were

voluntarily dismissed, did not present a sufficiently “exceptional” case to warrant an

award of attorney’s fees to Zodax. We assume the parties’ familiarity with the underlying

facts, the procedural history of the case, and the issues on appeal.

       “Our review of the denial of an award of attorneys’ fees is ‘highly deferential to

the district court.’” Raishevich v. Foster, 247 F.3d 337, 344 (2d Cir. 2001), quoting

Alderman v. Pan Am World Airways, 169 F.3d 99, 102 (2d Cir. 1999). The district court

“is intimately familiar with the nuances of the case, [and] is in a far better position to

make certain decisions than is an appellate court, which must work from a cold record.”

Matthew Bender & Co. v. West Publ’g. Co., 240 F.3d 116, 121 (2d Cir. 2001) (internal

quotation marks omitted). Accordingly, “the district court's determination will be reversed

on appeal only for an abuse of discretion.” Alderman, 169 F.3d at 102.

       The court may award attorney’s fees to a prevailing party under the Lanham Act

only in “exceptional cases.” 15 U.S.C. § 1117(a). Zodax was the prevailing party in light

of Penshurst’s voluntary dismissal of this action with prejudice. See, e.g., Nemaizer v.

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Baker, 793 F.2d 58, 60 (2d Cir. 1986). Historically, we have held that a case may be

“exceptional” only where it involves “fraud or bad faith or willful infringement.” Louis

Vuitton Malletier S.A. v. LY USA, Inc., 676 F.3d 83, 111 (2d Cir. 2012) (internal quotation

marks omitted) (citing Patsy's Brand, Inc. v. I.O.B. Realty, Inc., 317 F.3d 209, 221 (2d

Cir. 2003). The Supreme Court recently clarified that a case may be “exceptional” under

the Patent Act even without proof of such culpable intent, as long as the case “stands out

from others with respect to the substantive strength of a party's litigating position

(considering both the governing law and the facts of the case) or the unreasonable manner

in which the case was litigated.” Octane Fitness, LLC v. ICON Health & Fitness, Inc.,

134 S. Ct. 1749, 1756 (2014). We have not yet decided whether this rule applies in the

context of the Lanham Act, but we need not do so here. Even assuming, without deciding,

that Octane Fitness applies, we nonetheless affirm the district court’s denial of attorney’s

fees.

        Zodax notes potential weaknesses in Penshurst’s Lanham Act claims that might

direct an ultimate decision on the merits, arguing that the district court erred in not

awarding attorney’s fees on that basis. But the task before us is not an adjudication on the

merits, but rather a determination as to whether Penshurst’s claims were so “exceptional”

as to warrant fee-shifting. Penshurst alleged in its complaint that a representative of

Zodax approached Penshurst’s chief executive officer, stating, “Do you like our ‘Juliska-

ish’ products?” A. 88. While this alone might not be sufficient to prevail on the merits, it

indicates, as the district court noted, that Penshurst’s trademark claim was something

more than frivolous or a mere “shakedown.” A. 16. The same is true of Penshurst’s trade

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dress claim, which characterized the design of the company’s glassware as a protectable

source identifier based on several relevant forms of evidence, including unsolicited media

coverage and attempts to plagiarize. The district court did not abuse its discretion in

holding that, even if we assume arguendo that the more lenient standard of Octane

Fitness applies, Penshurst’s claims were not “exceptional.”

       Similarly, Zodax’s argument that the district court erred when it exercised its

discretion not to award attorney’s fees under the Copyright Act must fail. A claim of

copyright infringement has two elements: (1) ownership of a valid copyright, and

(2) copying of constituent elements of the work that are original. Feist Publ’ns, Inc. v.

Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991). The district court determined that

Penshurst’s registration of copyright was “probative of the objective reasonableness of

Plaintiff’s belief that its designs were copyrightable, even if such beliefs were ultimately

erroneous.” A. 17 (emphasis removed). The similarity in appearance between Juliska’s

products and Zodax’s allegedly infringing ones demonstrates that a belief that the work

was copied was also objectively reasonable.

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      In sum, the district court did not abuse its discretion in declining to award

attorney’s fees to Zodax under either the Lanham Act or Copyright Act. We have

considered Zodax’s remaining arguments and find them to be without merit.

Accordingly, we AFFIRM the judgment of the district court.

                                   FOR THE COURT:
                                   CATHERINE O’HAGAN WOLFE, Clerk of Court

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