United States District Court, D. Utah
CRAFT SMITH, LLC, a California limited liability company, Plaintiff,
EC DESIGN, LLC, a California limited liability company, Defendant. EC DESIGN, LLC, a California limited liability company, Counterclaimant,
CRAFT SMITH, LLC, a California limited liability company, and MICHAELS STORES, INC., a Delaware corporation, Counterclaim Defendants.
MEMORANDUM DECISION AND ORDER
BENSON, UNITED STATES DISTRICT JUDGE
the court is an application for an award of attorney fees and
expenses filed by Craft Smith. (Dkt. No. 204.) The motion has
been fully briefed by both parties, and the court has
considered the facts and arguments set forth in those
filings. Pursuant to civil rule 7-1(f) of the United States
District Court for the District of Utah Rules of Practice,
the court elects to determine the motion on the basis of the
written memoranda and finds that oral argument would not be
helpful or necessary. DUCivR 7-1(f).
2016, EC Design sent a demand letter to Craft Smith and
Michaels alleging that their new products infringed on EC
Design's copyright. (See Dkt. No. 223 at 4.)
Craft Smith then filed a declaratory judgment action in Utah
on December 8, 2016. (Dkt. No. 2.) EC Design filed a
copyright infringement suit in California on January 6, 2017.
(Dkt. No. 223 at 4.) That action was stayed pending the
resolution of the Utah case, and EC Design filed a
counterclaim for copyright and trade dress infringement in
Utah on July 13, 2017. (Dkt. No. 41.) The claims were
consolidated in the United States District Court for the
District of Utah.
17, 2019, nearly three years after the initial dispute arose,
this court granted summary judgment in favor of Craft Smith
and Michaels, finding that EC Design did not have a valid
copyright claim. (Dkt. No. 193.) The court held that EC
failed to prove infringement under any of the asserted
copyright or trade dress theories. (Id.)
months later, Craft Smith filed a motion for attorney fees
under both the Lanham Act and the Copyright Act. (Dkt. No.
204.) EC Design opposed the motion, and the matter is now
submitted to the court for decision.
Copyright Act provides that “the court may also award a
reasonable attorney's fee to the prevailing party as part
of the costs.” 17 U.S.C. § 505. District courts
have broad discretion on whether and when to grant an award
of attorney fees under the Copyright Act. See, e.g.,
Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994)
(rejecting the argument that attorney fees under the
Copyright Act should be awarded to the prevailing party as a
matter of course); Applied Innovations, Inc. v.
Regents of Univ. of Minn., 876 F.2d 626, 638 (8th Cir.
1989) (“The decision whether to award attorney's
fees in copyright cases is committed to the sound discretion
of the district court”); 4 Nimmer on Copyright §
14.10 (2019) (“The word ‘may' unmistakably
connotes discretion . . .”). Unsuccessful plaintiffs
should not generally be penalized where litigation is not
vexatious but rather involved novel questions of statutory
interpretation. See Edward B. Marks Music Corp. v.
Continental Record Co., 222 F.2d 488 (2d Cir.),
cert. denied, 350 U.S. 861 (1955); Applied
Innovations, Inc. v. Regents of University of Minnesota,
876 F.2d 626 (8th Cir. 1989). Factors that courts may
consider in determining whether to award prevailing party
attorney fees under the Copyright Act include
“frivolousness, motivation, objective unreasonableness
(both in factual and in legal components of case) and the
need in particular circumstances to advance considerations of
compensation and deterrence.” Fogerty, 510
U.S. at 535 (1994) (quoting Lieb v. Topstone Industries,
Inc. 788 F.2d 151, 156 (3d Cir. 1986)).
EC Design had a registered copyright on its LifePlanner.
(Dkt. No. 193 at 9.) Craft Smith and Michaels created a
planner with a similar design and layout to compete with
EC's planner. (Id. at 3.) While the court
ultimately held that Craft Smith's product did not
infringe on EC's copyright and that EC's asserted
compilation was not protectable expression, EC's suit was
not frivolous or unreasonable. (Id. at 22.) The
court does not find that an award of attorney's fees
would serve the ends of compensation or deterrence.
Accordingly, the court declines to award attorney fees under
the Copyright Act.
the Lanham Act, “[t]he court in exceptional cases may
award reasonable attorney fees to the prevailing
party.” 15 U.S.C. § 117(a). “Being the
prevailing party is not, by itself, enough to justify an
award of attorney fees. Moreover, even in exceptional cases,
the award of attorney fees is vested in the discretion of the
district court.” Nat'l Ass'n of Prof'l
Baseball Leagues, Inc. v. Very Minor Leagues, Inc., 223
F.3d 1143, 1146 (10th Cir. 2000). The United States Court of
Appeals for the Tenth Circuit has noted that no one factor is
determinative in deciding whether a case is
“exceptional, ” but factors may include
“(1) its lack of foundation, (2) the plaintiff's
bad faith in bringing the suit, [or] (3) the unusually
vexatious or oppressive manner in which it is
prosecuted.” Id. at 1147. If the case has
underlying merit but is pursued in a “meritless or
improper manner, ” attorney fees may also be
appropriate. Id. at 1149.
addressing the Lanham Act claim raised by the EC Design, this
court found that EC's asserted trade dress was
descriptive. (Dkt. No. 193 at 26.) It also found that Craft
Smith intentionally copied many elements of EC's product.
(Id. at 34.) After examining the undisputed facts,
however, the court ultimately held that EC Design failed to
raise a genuine issue of material fact regarding inherent
distinctiveness or secondary meaning, and Craft Smith
therefore did not infringe on EC's trade dress.
(Id. at. 36.) The court did not find that the trade
dress claim was brought in bad faith or lacked any
foundation. In short, nothing about the substance of this
case was “exceptional.” Craft Smith further
alleges that EC Design pursued the case in an improper manner
by filing a separate action in California (where both Craft
Smith and EC Design are headquartered), by the timing of its
compilation claim, and by various actions during discovery.
(Dkt. No. 204 ...