United States District Court, C.D. California
ORDER RE MOTION FOR ATTORNEYS' FEES AND
NON-TAXABLE COSTS [DKT. 180]
D. PREGERSON, UNITED STATES DISTRICT JUDGE
before the court is Defendants Life is Beautiful LLC
(“LIB”) and Downtown Las Vegas Management
LLC's (co llectively “Defendants”) Motion for
Attorneys' Fees and Non-Taxable Costs. After reviewing
the parties' submissions and hearing oral argument, the
court adopts the fo llowing Order.
court assumes the parties' familiarity with the factual
background of this case, which has been set forth in greater
detail in the court's summary judgment Order.
(See Dkt. 171.) In brief, this case arises out of an
intellectual property dispute between Plaintiff Amusement Art
and Defendants. Defendant LIB hosts the Life is Beautiful
festival in Las Vegas, Nevada-an annual event that features
music, art, food, and other programming. When the Life is
Beautiful festival was first launched in 2013, one of the
logos associated with the event was an image of a heart made
of splattered paint. Plaintiff Amusement Art is a company
owned by artist Thierry Guetta and his wife Debora Guetta.
Amusement Art holds and licenses intellectual property
produced by Thierry Guetta. Guetta's first solo art
exhibition, held in 2008, was entitled “Life is
Beautiful” and Guetta has incorporated that phrase into
some of his artwork. Guetta has also previously produced
artwork depicting a heart accented by splattered paint
mid-2013, a common acquaintance introduced LIB to
Guetta's business associates and encouraged the two
parties to consider possible collaboration. The parties and
their business associates engaged in several discussions,
including some pertaining to potential intellectual property
licensing arrangements with Amusement Art. However, the
parties were unable to reach any agreement and Amusement Art
ultimately filed the instant suit, asserting claims for
trademark infringement, copyright infringement, and various
other state and common law claims. (See generally
issue in this case are Amusement Art's asserted rights to
the splashed paint heart design (the “heart
design”) and the phrase “Life is
Beautiful.” Guetta had registered a copyright for the
heart design in 2009 and asserted that Defendants had
violated his copyright and trademark rights in the design.
(See FAC ¶¶ 20-22.) Between 2011 and 2012,
Plaintiffs also filed eight “intent to use”
trademark applications with the Patent and Trademark Office
(PTO) for the phrase “Life is Beautiful.”
(Declaration of Samuel T. Boyd in Support of Motion for
Summary Judgment., Exs. 13, 15, 17, 19, 21, 23, 25, &
26.) These applications included Statements of Use, made
under penalty of perjury, asserting that AA had actually used
the phrase “Life is Beautiful” as a trademark to
sell approximately 257 categories of goods within the
application classes. (Id., Exs. 14, 16, 18, 20, 22,
24, 27, and 28.) Along with the statements of use, Plaintiff
also submitted pictures of various goods with “Life is
Beautiful” tags attached to them. In September of 2014,
one month before filing this suit, Plaintiff also filed a
trademark registration application for the phrase “Life
is Beautiful” in the classification for festival and
community events. (Id., Ex. 60.)
this suit commenced, Defendants determined that a number of
the statements of use submitted by Plaintiff were false and
that Plaintiff did not actually sell many of the goods for
which it obtained trademark registrations. (Id., Ex.
5 (Patrick Guetta Dep.) at 114:14-118:14, 153:1-154:20;
Id., Ex. 10 (Debora Guetta Dep.) at 75:21-77:10,
77:17-80:15.) Defendants notified Plaintiff that they
intended to seek cancellation of the trademarks on the basis
of fraud on the trademark office. (Id., Ex. 39.)
Plaintiff then voluntarily surrendered eight of the trademark
registrations but retained the 2014 registration in
connection with festivals and art events. (Id., Ex.
5, 2016, Defendants filed Motions for Summary Judgment as to
all of Plaintiff's claims and Defendants'
counterclaims for cancellation, which the court granted in
full. (See Dkt. 171.) As to Plaintiff's
trademark claims regarding the phrase “Life is
Beautiful, ” the court found that the doctrine of
unclean hands barred Plaintiff's suit because Plaintiff
secured eight of the nine relevant trademark registrations by
making fraudulent statements before the PTO. As to the heart
design, the court found that Defendants were entitled to
summary judgment on the trademark claim because
Plaintiff's own 30(b)(6) representative acknowledged that
the design did not function as Plaintiff's trademark and
also because the evidence failed to create a triable issue of
fact was to the validity and protectability of the mark.
Finally, the court granted summary judgment to Defendants on
the heart design copyright claim on the ground that no
rational jury could find the two images were “virtually
identical, ” as is required when asserting a copyright
claim based on a ubiquitous image such as a heart design.
now move for attorneys' fees and non-taxable costs in the
amount of $1, 968, 100.34.
Lanham Act permits courts to award reasonable attorneys'
fees in trademark cases only in “exceptional
cases.” 15 U.S.C. § 1117(a). Historically, a case
was considered exceptional only when a plaintiff had shown
that a defendant engaged in “malicious, fraudulent,
deliberate or willful” infringement. Lindy Pen Co.
v. Bic Pen Corp., 982 F.2d 1400, 1409 (9th Cir. 1993).
In Octane Fitness, LLC v. ICON Health & Fitness,
Inc., 134 S.Ct. 1749 (2014), however, the Supreme Court
held that an analogous standard under the Patent Act was
“unduly rigid and impermissibly encumber[ed] the
statutory grant of discretion to district courts.”
Id. at 1755. Instead, the Court explained that
“an ‘exceptional' case is simply one that
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.”
Id. at 1756. Since Octane Fitness, the
Ninth Circuit has clarified that “district courts
analyzing a request for fees under the Lanham Act should
examine the ‘totality of the circumstances' to
determine if the case was exceptional.” SunEarth,
Inc. v. Sun Earth Solar Power Co., 839 F.3d 1179, 1181
(9th Cir. 2016) (quoting Octane Fitness, 134 S.Ct.
at 1756). Under the “totality of the
circumstances” approach, district courts may consider a
“‘nonexclusive' list of ‘factors, '
including ‘frivolousness, motivation, objective
unreasonableness (both in the factual and legal components of
the case) and the need in particular circumstances to advance
considerations of compensation and deterrence.'”
Octane Fitness, 134 S.Ct. at 1756 n.6 (quoting
Fogerty v. Fantasy Inc. 510 U.S. 517, 534 n.19
(1994)). The burden of proof for establishing an entitlement
to fees is preponderance of the evidence.
505 of the Copyright Act allows district courts judicial
discretion to award attorneys' fees to the prevailing
party in a copyright action. 17 U.S.C § 505. In
exercising this discretion, the Ninth Circuit has directed
courts to consider non-exclusive factors similar to ones that
now govern fee awards under the Lanham Act: “‘the
degree of success obtained; frivolousness; motivation;
objective unreasonableness . . . and the need in particular
circumstances to advance considerations of compensation and
deterrence.'” Magnuson v. Video
Yesteryear, 85 F.3d 1424, 1432 (9th Cir. 1996) (quoting
Jackson v. Axton, 25 F.3d 884, 890 (9th Cir. 1994).
Entitlement to Attorneys' Fees
threshold question raised by Defendants' motion is
whether Defendants should be awarded any fees at all under
the Lanham Act or the Copyright Act. As noted above,
Plaintiff's Lanham Act claims pertain to the alleged
infringement of the “Life is Beautiful” mark and
the heart design mark and Plaintiff's copyright claim
pertains only to the heart design.
Lanham Act claims
argues that the weakness of Plaintiff's claims, the
substantive unreasonableness of Plaintiff's position,
Plaintiff's litigation strategy, and the need to deter
similar actions all counsel in favor of awarding fees
incurred in connection with defending the infringement
allegations pertaining to both the “Life is
Beautiful” mark and the “splashed heart”
mark. As to the “Life is Beautiful” claim in
particular, Defendants also urge the court to award fees on
the ground that Plaintiff's action was premised on
both the historical test for “exceptional cases,
” see Lindy Pen, 982 F.2d at 1409, and the
more relaxed standards of Octane Fitness,
see 134 S.Ct. at 1756, a party's motivation or
“fraudulent” conduct is archetypal conduct that
warrants fee-shifting under the Lanham Act. See S.
Rep. No. 1400 (1974), as reprinted in 1974
U.S.C.C.A.N. 7132, 7136 (“It would be unconscionable
not to provide a complete remedy including attorney's
fees for acts which the courts have characterized as . . .
fraudulent.”). Accordingly, courts have routinely found
that cases where a Plaintiff engaged in fraud on the
trademark office are “exceptional” under the
Lanham Act. See, e.g., On Site Energy Co. v. MTU
Onsite Energy Corp., No. 10-cv-1671 JS (WDW), 2013 WL
3990919, at *10 (E.D.N.Y. Aug. 2, 2013) (holding that where a
“jury definitively held that Plaintiff had obtained
registration . . . by fraud . . . [t]his, alone, merit[ed] a
finding that this is an exceptional case entitling Defendant
to attorneys' fees”); Firehouse Rest. Grp.,
Inc. v. Scurmont LLC, No. 4:09-cv-00618-RBH, 2011 WL
4943889, at *11 (D.S.C. Oct. 17, 2011) (“the jury's
verdict, finding that [plaintiff] committed fraud on the
USPTO, renders this case ‘exceptional'”).
Defendants ask the court to make a similar finding here.
light of the extent of Plaintiff's fraudulent conduct in
this case, the court finds that Defendants are entitled to
recover attorneys' fees incurred in connection with
defending the trademark infringement claims arising from the
“Life is Beautiful” mark. As Defendants note,
these particular infringement claims were initially based on
eight fraudulently-obtained registrations where Defendants
claimed the use of the “Life is Beautiful” mark
in connection with 257 categories of goods. (Mot. 10.)
Plaintiff obtained these registrations by staging photographs
and submitting false declarations about using the mark in
commerce on goods that they later admitted were never sold.
(Id.) Plaintiff responds that court's prior
determination that Plaintiff had engaged in fraudulent
conduct should not automatically entitle Defendants to
attorneys' fees. Specifically, Plaintiff notes that they
surrendered the eight fraudulently-obtained registrations and
that the infringement claims was ultimately premised on a
ninth registration that was not fraudulently-obtained.
(Opp'n 10-11.) This effort to minimize the relevance of
the fraud does not alter the exceptional nature of this case.
As the court explained in its summary judgment Order,
Plaintiff attempted to fraudulently “secure a monopoly
over most plausible uses of the phrase ‘Life is
Beautiful' without actually investing any resources into
developing the goodwill of their ...