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American Optometric Society, Inc. v. American Board of Optometry

December 3, 2012

AMERICAN OPTOMETRIC SOCIETY, INC.
v.
AMERICAN BOARD OF OPTOMETRY, INC.



The opinion of the court was delivered by: Honorable A. Howard Matz, U.S. District Judge

CIVIL MINUTES - GENERAL

Present: The Honorable A. HOWARD MATZ, U.S. DISTRICT JUDGE

Stephen Montes Not Reported

Deputy Clerk Court Reporter / Recorder Tape No.

Attorneys NOT Present for Plaintiff: Attorneys NOT Present for Defendant:

Proceedings: IN CHAMBERS (No Proceedings Held)

Defendant American Board of Optometry ("ABO") seeks attorneys' fees of $462,508 from Plaintiff American Optometric Society ("AOS").*fn1 After a bench trial, the Court granted judgment in favor of ABO on the remaining claim of AOS's First Amended Complaint ("FAC")-false advertising under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125, for ABO's use of the term "board certified." ABO seeks attorneys' fees pursuant to Section 35(a) of the Lanham Act, 15 U.S.C. § 1117(a). ABO's request for fees is limited to its work defending the FAC. AOS makes no specific objections to the hours or rates billed by ABO's counsel or the overall amount requested, other than to assert that the amount is more than AOS's assets and would result in it filing for bankruptcy. Opp. at 14. The Court finds that the amount is reasonable.

ATTORNEYS' FEES UNDER THE LANHAM ACT

Section 35(a) of the Lanham Act states that "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." 15 U.S.C. § 1117(a).*fn2 Such an award is within the district court's discretion if the "exceptional case" requirement is met. Stephen W. Boney, Inc. v. Boney Servs., Inc., 127 F.3d 821, 825 (9th Cir. 1997). Although the Lanham Act "nowhere defines what makes a case 'exceptional,'" id., the Ninth Circuit has "held that this requirement is met when the case is either 'groundless, unreasonable, vexatious, or pursued in bad faith.'" Cairns v. Franklin Mint Co., 292 F.3d 1139, 1156 (9th Cir. 2002) (emphasis in original). The "'exceptional circumstances' requirement [is construed] narrowly." Classic Media, Inc. v. Mewborn, 532 F.3d 978, 990 (9th Cir. 2008).

WHAT CONSTITUTES AN EXCEPTIONAL CASE

The Ninth Circuit has stated that "[t]he line distinguishing exceptional cases from non-exceptional cases is far from clear. It is especially fuzzy where the defendant prevails due to plaintiff's failure of proof." Secalt S.A. v. Wuxi Shenxi Constr. Mach. Co., 668 F.3d 677, 687 (9th Cir. 2012). It has "held that an action is exceptional under the Lanham Act if the plaintiff has no reasonable or legal basis to believe in success on the merits," or, "[i]n other words, exceptional cases include instances where plaintiff's case is frivolous or completely lacking in merit." Id. (citing Cairns, 292 F.3d at 1156).

Because the exceptional circumstances warranting attorneys' fees are disjunctive ("groundless, unreasonable, vexatious, or pursued in bad faith"), "the mere absence of bad faith on [the plaintiff's] part does not render [the defendant] ineligible for attorneys Stephen W. Boney, 127 F.3d at 827. For instance, in Cairns, the court affirmed an award of attorneys' fees to the defendant where the district court, after granting summary judgment to the defendant, had found that the plaintiff's false advertisement claim was "groundless and unreasonable because the statements in the advertisements at issue were true and the [plaintiff] had no reasonable basis to believe they were false." Cairns, 292 F.3d at 1156. The district court had additionally found that the plaintiff's trademark dilution claim was "groundless and unreasonable because it had no legal basis, having been based on the 'absurd' and 'just short of frivolous' contention that the mark 'Diana, Princess of Wales" has taken on a secondary meaning in the mind of the public" as identifying charitable services rather than the individual. Id.

Later, in Secalt, the court also affirmed the award of attorneys' fees to the defendant, following summary judgment in the defendant's favor, where "there was an utter failure of proof" on the plaintiff's trade dress infringement claim, in particular, a lack of any evidence that the design of plaintiff's machine was nonfunctional. Secalt, 668 F.3d at 688-89. A number of factors supported the court's decision, including that the plaintiff "could not identify the aesthetic value of the exterior design," that its witnesses "at best offered unsupported or conclusory claims about the design," and that a district court in another jurisdiction had previously found no evidence to support the same claim. Id. at 688. The court further stated that "[f]atal to [plaintiff's] claim was the testimony of its own witnesses who honestly laid out the functional nature of the design."

The court noted that, even though the plaintiff had not prevailed on its claim, "were it able to provide some legitimate evidence of nonfunctionality, this case would likely fall on the unexceptional side of the dividing line." Id. Because it had not done so, the court affirmed the ...


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