Court Opinion

ID: 9496600
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:30:47.712559+00
Date Added: 2024-06-11T17:57:40.935141
License: Public Domain

FERGUSON, Circuit Judge,
concurring.
I concur in the decision to affirm the orders of the District Court. However, I do not concur in the analysis set forth by the majority because that analysis fails to acknowledge that “willful and deliberate,” in the context of attorney’s fees awards in exceptional trademark cases, does not mean merely “voluntary” or “intentional.” A competitor has the right — even the duty — to intentionally challenge the monopoly created by a weak trademark. A finding that a trademark case is exceptional enough to permit an award of attorney’s fees requires something more than a voluntary act by the infringing party.
This Circuit has adopted the Committee on the Judiciary’s recommendation that attorney’s fees should be available under the Lanham Act “in exceptional cases, i.e., in infringement cases where the acts of infringement can be characterized as ‘malicious,’ ‘fraudulent,’ ‘deliberate,’ or ‘willful’.” Playboy Enterprises, Inc. v. Baccarat Clothing Co., Inc., 692 F.2d 1272, 1276 (9th Cir.1982) (quoting S.Rep. No. 93-1400 (1974)).
In Lindy Pen Co., Inc. v. Bic Pen Corp., 982 F.2d 1400 (9th Cir.1993), we explained that “[wjillful infringement carries a connotation of deliberate intent to deceive. Courts generally apply forceful labels such as ‘deliberate,’ ‘false,’ ‘misleading,’ or ‘fraudulent’ to conduct that meets this standard.” Id. at 1406. Thus, although defendant Bic Pen intentionally used the term “Auditor’s” despite knowing that Lindy Pen had registered the term as its own trademark fourteen years earlier, id. at 1403, we held that the action “simply d[id] not involve willful infringement.” Id. at 1406. Among other factors, the Lindy Pen “mark was weak and ... there was no evidence of actual confusion.” Id.
We have not departed from the Lindy Pen explication of the term “willful” as including a component of deceit or bad faith.1 In Intel Corp. v. Terabyte Int’l, Inc., 6 F.3d 614 (9th Cir.1993), we held *1221that a record showing that Terabyte had known that the chips it purchased were counterfeit was sufficient to “support ... a determination that Terabyte acted deliberately and willfully.” Id. at 622. In Comm. for Idaho’s High Desert, Inc. v. Yost, 92 F.3d 814 (9th Cir.1996), we permitted an award of attorney’s fees because the appellants had used the appellee’s name to “obstruct [the appellee’s] pursuit of its environmental agenda.” Id. at 825. Then, in Stephen W. Boney, Inc. v. Boney Servs., Inc., 127 F.3d 821 (9th Cir.1997), we recognized that “the standard articulated in Lindy Pen and Committee for Idaho’s High Desert, under which bad faith or other malicious conduct satisfies the exceptional circumstances requirement,” had been extended to “both prevailing plaintiffs and prevailing defendants seeking attorney’s fees under the Lanham Act.” Id. at 827.2 More recently, we upheld a jury finding of “willful infringement” of a trademark (used by the District Court as the basis of an attorney’s fees award) because the jury had been “properly instructed as to the bad faith component of willfulness.” Gracie v. Gracie, 217 F.3d 1060, 1068-69 (9th Cir.2000).3
In this case, prior extensive findings regarding the strength of the plaintiffs mark4 and the likelihood of confusion permitted the District Court to award attorney’s fees to the plaintiff. The factors constituting the well-established test for likelihood of confusion are set forth in AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir.1979).5 The plaintiffs trademark in this case was held to be a strong one, and the likelihood of confusion was correspondingly found to be high. Consequently, the defendant’s behavior in this controversy went beyond the intentional challenge of a weak mark that occurred in Lindy Pen. The bad faith or deceitfulness component of “willful” was met here, making this an exceptional case and permitting an award of attorney’s fees at the District Court’s discretion.
Although the defendant’s actions in this case “r[o]se to. the level of willfulness,” Lindy Pen, 982 F.2d at 1406, this will not be true in every trademark challenge. In order to determine whether or not a competitor’s act of infringement is “willful,” rather than merely voluntary or intentional, district courts must consider the factors listed in the AMF test. Otherwise, parties such as the trademark challenger in Lindy Pen may be punished by attorney’s fees *1222awards for exercising their right to challenge weak trademarks.

. Thus, the majority’s assertion that "Bumper’s claims of good faith are unavailing. The issue is not necessarily one of bad faith: willful or deliberate infringement will suffice,” is confused.

. In Boney, we also speculated that "other exceptional circumstances” aside-from bad faith “may warrant a fee award” without discussing what those circumstances might be. Id. However, this speculation as to what else might make a case “exceptional” has no bearing on the fact that we have continuously defined “willful” as having a component of deceitfulness or bad faith.

. On this basis, we distinguished Grade from Texas Pig Stands, Inc. v. Hard Rock Cafe Int'l, Inc., 951 F.2d 684 (5th Cir.1992) (reversing a fee award because the jury instructions defined “willfully” as merely "done voluntarily and intentionally").

. The strength of a mark is determined through the "imagination test,” in which a court “asks how much imagination a consumer must use to associate a given mark with the goods or services it identifies ... [t]he more imagination required, the stronger the mark is”; and the "need test,” which “asks to what extent a mark is actually needed by competitors to identify their goods or services." Miss World (UK) Ltd. v. Mrs. America Pageants, Inc., 856 F.2d 1445, 1449 (9th Cir.1988).

.Those factors include: (1) strength of the mark, (2) proximity of the goods, (3) similarity of the marks, (4) evidence of actual confusion, (5) marketing channels used, (6) type of goods and degree of care likely to be exercised by the purchaser, (7) defendant’s intent in selecting the mark, and (8) likelihood of expansion of product lines. Id. at 348-49.