Case3:12-cv-03435-RS Document42 Filed12/31/12 Page1 of 16 1 2 3 Paul Alan Levy, pro hac vice Public Citizen Litigation Group 1600 20th Street, N.W. Washington, D.C. 20009 (202) 588-1000 plevy@citizen.org 4 5 6 Catherine R. Gellis, California Bar #251927 P.O. Box 2477 Sausalito, California 94966 (202) 642-2849 cathy@cgcounsel.com 7 Attorneys for Plaintiff 8 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA 9 10 CHRISTOPHER RECOUVREUR, 11 12 13 Plaintiff, v. CHARLES CARREON, 14 Defendant. ) ) ) ) ) ) ) ) ) ) No. 3:12-cv-03435 NOTICE OF MOTION, MOTION, AND MEMORANDUM SUPPORTING AWARD OF ATTORNEY FEES UNDER THE LANHAM ACT Date: February 7, 2013 Time: 1:30 PM Courtroom #3, 17th Floor 15 16 NOTICE OF MOTION AND MOTION 17 TO ALL PARTIES AND THEIR COUNSEL OF RECORD: 18 Please take notice that, on February 7, 2013, at 1:30 PM, or as soon thereafter as the matter may be heard 19 by this Court, located at 450 Golden Gate Avenue, San Francisco, California, plaintiff Christopher 20 Recouvreur will and hereby moves the Court, pursuant to Rule 54(d) of the Federal Rules of Civil Procedure 21 and Section 35 of the Lanham Act, 15 U.S.C. ? 1117, for an order awarding attorney fees against defendant 22 Charles Carreon. 23 This motion seeks the following relief -- an order awarding $40,115 in attorney fees. 24 25 26 27 28 -1- Motion for Award of Attorney Fees Under the Lanham Act Case3:12-cv-03435-RS Document42 Filed12/31/12 Page2 of 16 MEMORANDUM OF POINTS AND AUTHORITIES SUPPORTING MOTION FOR AWARD OF ATTORNEY FEES 1 2 3 4 5 Table of Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii Facts and Proceedings to Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARGUMENT I. THE ACCEPTED OFFER OF JUDGMENT MAKES RECOUVREUR THE PREVAILING PARTY, AND DOES NOT WAIVE THE ENTITLEMENT TO ATTORNEY FEES.. . . . . . . . . 3 II. THIS WAS AN EXCEPTIONAL CASE BECAUSE CARREON'S INFRINGEMENT AND CYBERSQUATTING CLAIMS WERE FRIVOLOUS... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 III. PLAINTIFF SHOULD BE AWARDED $40,115 IN ATTORNEY FEES.. . . . . . . . . . . . . . . . . . 8 6 7 8 9 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Motion for Award of Attorney Fees Under the Lanham Act Case3:12-cv-03435-RS Document42 Filed12/31/12 Page3 of 16 1 TABLE OF AUTHORITIES 2 Assessment Technologies of Wisconsin v. WIREdata, Inc., 361 F.3d 434 (7th Cir. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Blum v. Stenson, 465 U.S. 886 (1984).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Bond v. Ferguson Enters., 2011 WL 2648879 (E.D. Cal. June 30, 2011). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Bosley Medical v. Kremer, 403 F.3d 672 (9th Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 6 Brooks Furniture Mfg. v. Dutailier Int'l, 393 F.3d 1378 (Fed. Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Brown v. Sullivan, 916 F.2d 492 (9th Cir. 1990). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 CACI Int'l, Inc. v. Pentagen Technologies Int'l, 70 F.3d 111 (4th Cir. 1995). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Caesar's World v. Milanian, 126 Fed. App'x. 775 (9th Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Cairns v. Franklin Mint Co., 292 F.3d 1139 (9th Cir. 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 6 Camacho v. Bridgeport Finance, 523 F.3d 973 (9th Cir. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Classic Media v. Mewborn, 532 F.3d 978 (9th Cir. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 8 Erdman v. Cochise County, 926 F.2d 877 (9th Cir. 1991). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Guichard v. Universal City Studios, 363 Fed. App'x 434 (9th Cir. 2009). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Holland v. Roeser, 37 F.3d 501 (9th Cir. 1994). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Koch Indus. v. Does, 2011 WL 1775765 (D. Utah May 9, 2011). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Lamparello v. Falwell, 420 F.3d 309 (4th Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Lucas Nursery and Landscaping v. Grosse, 359 F.3d 806 (6th Cir. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ii Motion for Award of Attorney Fees Under the Lanham Act Case3:12-cv-03435-RS Document42 Filed12/31/12 Page4 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Mattel v. Walking Mountain Productions, 353 F.3d 792 (9th Cir. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 6 New Kids on the Block v. News America Publ'g, 971 F.2d 302 (9th Cir. 1992). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Nightingale Home Healthcare v. Anodyne Therapy, 626 F.3d 958 (7th Cir. 2010). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Nissan Motor Co. v. Nissan Computer Co., 378 F.3d 1002 (9th Cir. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Nordby v. Anchor Hocking Packaging Co., 199 F.3d 390 (7th Cir. 1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Nusom v. Comh Woodburn, 122 F.3d 830 (9th Cir. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 O'Neal v. Seattle, 66 F.3d 1064 (9th Cir. 1995). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Prison Legal News v. Schwarzenegger, 608 F.3d 446 (9th Cir. 2010). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Prison Legal News v. Schwarzenegger, No. 4:07-cv-02058-CW (N.D. Cal. Dec. 5, 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Ramming v. Natural Gas Pipeline Co. of America, 390 F.3d 366 (5th Cir. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Rosenfeld v. U.S. Dep't of Justice, --F. Supp.2d --, 2012 WL 4933317 (N.D. Cal. 2012). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Salazar v. District of Columbia, 123 F. Supp.2d 8 (D.D.C. 2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Sea Coast Foods v. Lu-Maritime Lobster & Shrimp, 260 F.3d 1054 (9th Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 4 Secalt S.A. v. Wuxi Shenxi Const. Machinery Co., 668 F.3d 677 (9th Cir. 2012). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Special Devices v. OEA, Inc., 269 F.3d 1340 (Fed Cir. 2001).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Stephen W. Boney v. Boney Services, 127 F.3d 821 (9th Cir. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 TMI v. Maxwell, 368 F.3d 433 (5th Cir. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Taubman v. WebFeats, 319 F.3d 770 (6th Cir. 2003). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 28 iii Motion for Award of Attorney Fees Under the Lanham Act Case3:12-cv-03435-RS Document42 Filed12/31/12 Page5 of 16 1 2 Utah Lighthouse Ministry v. Foundation for Apologetic Information and Research, 527 F.3d 1045 (10th Cir. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 3 \Webb v. James, 147 F.3d 617 (7th Cir. 1998). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 CONSTITUTION, STATUTES AND RULES 5 United States Constitution First Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6 7 8 9 10 11 12 13 14 15 Copyright Code, 17 U.S.C. ?? 1 et seq... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Declaratory Judgment Act, 28 U.S.C. ? 2201. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Lanham Act 15 U.S.C. ?? 1051 et seq... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 5, 8 Section 35, 15 U.S.C. ? 1117 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Section 35(a), 15 U.S.C. ? 1117(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Section 43(d)(1)(A)(i), 15 U.S.C. ? 1125(d)(1)(A)(i) .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Federal Rules of Civil Procedure Rule 4(d)(2)(B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 10 Rule 54(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 3 Rule 54(d)(2)(B)(I).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Rule 68. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 2, 3 16 17 18 19 20 21 22 23 24 25 26 27 28 iv Motion for Award of Attorney Fees Under the Lanham Act Case3:12-cv-03435-RS Document42 Filed12/31/12 Page6 of 16 1 In this action, plaintiff Christopher Recouvreur sought a declaratory judgment protecting his right 2 under the Lanham Act and the First Amendment to use the name of defendant Charles Carreon to denote 3 a noncommercial web site devoted to satirizing Mr. Carreon. The action concluded with complete success 4 for plaintiff when he accepted a Rule 68 offer of judgment granting the declaratory judgment for which he 5 had prayed; the judgment made plaintiff the prevailing party. The Lanham Act provides for awards of 6 attorney fees in favor of the prevailing party in "exceptional" cases, and longstanding Ninth Circuit 7 precedent provides that the exceptional standard is met when the trademark holder's infringement claims 8 are "groundless" or "unreasonable." That standard is plainly met in this case. 9 FACTS AND PROCEEDINGS TO DATE 10 This action arose from a public controversy over perceptions that defendant Carreon was abusing 11 the judicial system. After Mr. Carreon sent a demand letter to Matthew Inman on behalf of a client claiming 12 defamation, Inman made fun of Mr. Carreon by starting a fund-raising campaign to raise the demanded 13 amount as a donation to charity. After that fundraising effort went viral, Mr. Carreon brought a frivolous 14 lawsuit against Inman as well as against the Internet Service Provider ("ISP") that hosted the fund-raising 15 campaign, and the American Cancer Society and National Wildlife Federation, the charities to which Inman 16 had promised to send the public's donations. Plaintiff Recouvreur started an anonymous, satirical web site 17 to comment about the controversy. Complaint Exhibits A, B, C. Mr. Carreon threatened to sue plaintiff; 18 he also demanded to know the name of the anonymous satirist, threatening to sue the company through 19 which plaintiff had registered his domain name unless it revealed plaintiff's name. 20 Although Mr. Recouvreur obtained counsel to bring the case, both he and his counsel, Paul Alan 21 Levy, hoped to avoid the need for litigation by reasoning with Mr. Carreon. Levy Fifth Affidavit ? 18. 22 Before any papers were filed, Mr. Levy telephoned Mr. Carreon to discuss the legal issues, calling his 23 attention to the legal reasons why his claims could not possibly succeed, and then followed up the phone call 24 with an enumeration of cases, including Ninth Circuit decisions that were squarely on point. Id.; Complaint 25 Exhibit E. In response to this effort to avoid litigation, Mr. Carreon responded by threatening to string out 26 litigation, to seek high levels of monetary relief, to delay filing suit for years in the hope that Public Citizen 27 would no longer be interested, and to file in a jurisdiction that had not yet adopted the legal principles 28 followed in the Ninth Circuit. Id. Exhibit F. In light Mr. Carreon's then-pending suit against Inman, Motion for Award of Attorney Fees Under the Lanham Act Case3:12-cv-03435-RS Document42 Filed12/31/12 Page7 of 16 1 plaintiff and his counsel took Mr. Carreon's threats seriously, and accordingly filed this action for a 2 declaratory judgment of non-infringement under the Lanham Act. 3 At first, defendant engaged in a pattern of passive resistance to the litigation-- he refused to execute 4 a waiver of service form, refused to accept service of process when a process server came to his home, and 5 indeed sent an email to plaintiff's counsel, saying that he was not going to willingly "expose myself to 6 service." Docket Entry No. ("DN") 32-1, Exhibit S. Mr. Carreon also wrote a letter to plaintiff's employer, 7 demanding preservation of electronic records and implicitly threatening to sue the employer for alleged 8 trademark violations committed by its employee, either on the employer's time or using the employer's 9 facilities. DN 19-1, Exhibit H. Hoping to avoid the expense of hiring a process server to sit outside the 10 Carreon home office, waiting for him to leave the house and hence be exposed to service, plaintiff moved 11 unsuccessfully for an order authorizing service by email. After Mr. Carreon was denied permission to argue 12 by telephone a preliminary injunction motion that he had filed in this district on behalf of a client, plaintiff 13 was ultimately able to serve Mr. Carreon outside the courtroom. 14 Mr. Carreon then sought to settle the case with several preconditions and threatened to bring suit 15 against Mr. Levy's employer if plaintiff would not consent to his terms. Levy Third Affidavit, DN 35-1, ? 16 3. Mr. Carreon also refused to pay the expenses of the service that had been required by his refusal to 17 expose himself to service. Levy Second Affidavit, DN 32-2, Exhibit T. 18 Plaintiff then moved to compel payment of the service expenses, and also sought an award of 19 attorney fees for filing that motion. At that point, Mr. Carreon offered judgment under Rule 68, providing 20 for entry of a declaratory judgment as follows: 21 22 23 24 25 26 27 1. Plaintiff's domain name "charles-carreon.com," plaintiff's use of the domain name, and plaintiff's current manner of using his web site, do not violate defendant's rights; 2. Plaintiff's use of the domain name "charles-carreon.com," in its current manner of use, is fair use and protected under the First Amendment, and does not infringe on defendant's mark; 3. Defendant is not entitled to an injunction against plaintiff using the domain name "charles-carreon.com" or operating the Web site located at the URL "www.charles-carreon.com." Plaintiff accepted that judgment, DN 38, bringing the litigation on the merits to a close. Because the Lanham Act provides for awards of attorney fees to the prevailing party, 15 U.S. C. ? 1117(a), plaintiff now 28 -2- Motion for Award of Attorney Fees Under the Lanham Act Case3:12-cv-03435-RS Document42 Filed12/31/12 Page8 of 16 1 seeks attorney fees. 1 2 ARGUMENT 3 I. 4 5 6 7 8 9 THE ACCEPTED OFFER OF JUDGMENT MAKES RECOUVREUR THE PREVAILING PARTY, AND DOES NOT WAIVE THE ENTITLEMENT TO ATTORNEY FEES. After a plaintiff has accepted a defendant's offer of judgment, the plaintiff becomes the prevailing party, so long as the relief obtained through the declaratory judgment is substantial by comparison to the claims advanced and the relief sought in the complaint. Sea Coast Foods v. Lu-Mar Lobster & Shrimp, 260 F.3d 1054, 1059-1060 (9th Cir. 2001); Webb v. James, 147 F.3d 617, 623 (7th Cir. 1998). Here, the prayer for relief in the Amended Complaint sought the following declaratory judgment: 13 A. Declaring that plaintiff's domain name "charles-carreon.com," plaintiff's use of the domain name, and plaintiff's use of his web site do not violate defendant's rights under the Lanham Act or other trademark law; B. Declaring that plaintiff's use of the domain name "charles-carreon.com" is fair use and protected under the First Amendment, and does not infringe on defendant's mark; C. Declaring that defendant is not entitled to an injunction against plaintiff using the domain name "charles-carreon.com" or operating the Web site located at the URL "www.charlescarreon.com." 14 DN 15, page 6. 10 11 12 15 The declaratory judgment offered and accepted, as quoted on page 2, nearly mimics the requested judgment; 16 in fact, the accepted offer is broader than the relief requested, insofar as the prayer for relief was limited to 17 non-violation of defendant's rights "under the Lanham Act or other trademark law," although the accepted 18 declaratory judgment is not limited to rights under those laws. Accordingly, plaintiff achieved complete 19 relief in this case. 20 Arguments that defendant advanced in opposition to plaintiff's motion for an award of attorney fees 21 under Rule 4(d)(2)(B), DN 39, suggest that defendant will argue that his offer of judgment bars any 22 application for an award of attorney fees under the Lanham Act. But nothing in the offer comes close to 23 accomplishing that result. The final paragraph of the offer of judgment provides: 24 4. Plaintiff shall take a total money judgment inclusive of costs in the amount of $725, being the sum of the filing fee and service costs claimed. 25 26 27 28 1 Under Rule 54(d)(2)(B)(i), an application for an award of attorney fees is due no later than fourteen days after entry of judgment. Because accepted Rule 68 offers of judgment are selfexecuting, Ramming v. Natural Gas Pipeline Co. of America, 390 F.3d 366 (5th Cir. 2004), this motion is filed on the assumption that the Rule 54(d) deadline runs from the date of acceptance. -3- Motion for Award of Attorney Fees Under the Lanham Act Case3:12-cv-03435-RS Document42 Filed12/31/12 Page9 of 16 1 This paragraph makes no reference to attorney fees, and hence acceptance of this offer cannot be said to 2 effect a waiver of the claim for attorney fees under the Lanham Act. 3 If the Lanham Act were one of the many statutes that makes "attorney fees" part of costs, there would 4 at least be a question whether the reference of "costs" in paragraph 4 was intended to include the fees in the 5 total costs of $725 that were being offered. That would bring into play the Ninth Circuit's rule that, even 6 in civil rights cases where fees are defined as being part of the costs, clear language is needed to impose a 7 waiver of fees. Erdman v. Cochise County, 926 F.2d 877, 880-881 (9th Cir. 1991). See also Nordby v. 8 Anchor Hocking Packaging Co., 199 F.3d 390, 391 (7th Cir. 1999) (recognizing Ninth Circuit rule 9 demanding express use of the "magic words 'attorney fees'" before waiver of claim for fees will be found). 10 But the Lanham Act's statutory provision for attorney fees does not make them part of the costs. 11 The Ninth Circuit has repeatedly declared that "where the underlying statute does not make attorney fees part of costs, it is incumbent on the defendant making a Rule 68 offer to state clearly that attorney fees are included as part of the total sum for which judgment may be entered if the defendant wishes to avoid exposure to attorney fees in addition to the sum offered plus costs." 12 13 14 15 Sea-Coast Foods, 260 F.3d at 1059, quoting Nusom v. Comh Woodburn, 122 F.3d 830, 834 (9th Cir. 1997). 16 Similarly, under Ninth Circuit law an offer of judgment is construed against the drafter, Holland v. Roeser, 17 37 F.3d 501, 504 (9th Cir. 1994). Here, there is nothing in the accepted offer of judgment that purports to 18 affect the right to seek an award of attorney fees under the Lanham Act. Hence, Recouvreur's prevailing 19 party status is a sufficient basis to trigger his right to seek an award under 15 U.S.C. ? 1117(a). 20 II. 21 22 23 24 25 26 27 THIS WAS AN EXCEPTIONAL CASE BECAUSE CARREON'S INFRINGEMENT AND CYBERSQUATTING CLAIMS WERE FRIVOLOUS. Section 35(a) of the Lanham Act provides, "The court in exceptional cases may award reasonable attorney fees to the prevailing party." In the Ninth Circuit, the longstanding rule is that a case is "exceptional" when the trademark owner makes claims that are "groundless, unreasonable, vexatious, or pursued in bad faith." Classic Media v. Mewborn, 532 F.3d 978, 990 (9th Cir. 2008); Stephen W. Boney v. Boney Services, 127 F.3d 821, 827 (9th Cir. 1997). These terms are in the alternative, and the Ninth Circuit has affirmed awards of attorney fees imposed solely because the trademark claims were groundless. Secalt S.A. v. Wuxi Shenxi Const. Machinery Co., 668 F.3d 677, 687-688 (9th Cir. 2012); Guichard v. Universal 28 -4- Motion for Award of Attorney Fees Under the Lanham Act Case3:12-cv-03435-RS Document42 Filed12/31/12 Page10 of 16 1 City Studios, 363 Fed. App'x 434, 436 (9th Cir. 2009); Cairns v. Franklin Mint Co., 292 F.3d 1139, 1156 2 (9th Cir. 2002). In fact, in Mattel v. Walking Mountain Productions, 353 F.3d 792, 816 (9th Cir. 2003), the 3 Court of Appeals even reversed a denial of attorney fees as an abuse of discretion because the infringement 4 claims "might have been groundless or unreasonable," and the district judge had failed to address that point 5 in denying attorney fees. 6 In Walking Mountain, the Ninth Circuit also considered that the alleged infringer's "use constituted 7 nominative fair use and was protected by policy interests in free expression." Id. In that regard, although 8 an intellectual property owner has a monetary incentive to sue for infringement, because it can recover 9 damages, or even statutory damages, an accused infringer has no comparable incentive to stand up for the 10 public domain and thus for the rights of free expression of every member of the public. See Assessment 11 Technologies of Wisconsin v. WIREdata, Inc., 361 F.3d 434, 436 (7th Cir. 2004). Similarly, here, the 12 availability of attorney fees to a non-commercial trademark user like Mr. Recouvreur is needed as an 13 incentive to stand up for the right to criticize a lawyer who has shown his willingness to bring suits of 14 questionable merit over online criticism. 15 Here, Mr. Carreon's trademark and cybersquatting claims were beyond groundless; they were 16 frivolous. Two Ninth Circuit decisions--Bosley Medical v. Kremer, 403 F.3d 672 (9th Cir. 2005), and 17 Nissan Motor Co. v. Nissan Computer Co., 378 F.3d 1002 (9th Cir. 2004)--barred Mr. Carreon's claims 18 over Mr. Recouvreur's satirical web site using Mr. Carreon's name as the domain name because the web 19 site constituted non-commercial criticism. Bosley is the most clearly on point--it involved use of the 20 domain name bosleymedical.com, and the Ninth Circuit squarely held that the non-commercial character 21 of the web site required affirmance of summary judgment obtained by the web site operator dismissing the 22 trademark holder's infringement and dilution counts under the Lanham Act. Likewise, in Nissan, the Ninth 23 Circuit vacated an injunction issued by a trial judge against the posting of links to non-commercial criticisms 24 of the plaintiff automobile company on a web site at nissan.com, 378 F.3d at 1015-1018, even though the 25 court below had properly forbidden the hosting of automobile-related advertising on the same web site. Id. 26 at 1009. The fact that the anti-Nissan commentary might have hurt the auto company's business did not 27 make the web site "commercial." Id. at 1017. Because Mr. Recouvreur's satirical web site was strictly non- 28 commercial, Bosley and Nissan required rejection of Mr. Carreon's threatened trademark claims. -5- Motion for Award of Attorney Fees Under the Lanham Act Case3:12-cv-03435-RS Document42 Filed12/31/12 Page11 of 16 1 Overwhelming authority from other circuits also made the Carreon trademark claims groundless for 2 an independent reason. At least when the underlying web site does not create any likelihood of confusing 3 visitors about whether the trademark holder sponsors the page, a domain name containing the trademark 4 holder's name is not actionable under the trademark laws because there is no likelihood of confusion, which 5 must be alleged and proved for a trademark owner to bring a valid infringement claim. Utah Lighthouse 6 Ministry v. Foundation for Apologetic Information and Research, 527 F.3d 1045 (10th Cir. 2008); 7 Lamparello v. Falwell, 420 F.3d 309 (4th Cir. 2005); TMI v. Maxwell, 368 F.3d 433, 436-438 (5th Cir. 8 2004); Taubman v. WebFeats, 319 F.3d 770 (6th Cir. 2003); Koch Indus. v. Does, 2011 WL 1775765 (D. 9 Utah May 9, 2011). And even apart from Mr. Carreon's inability to make a non-frivolous allegation of 10 likely confusion, the infringement claims here were plainly barred by the doctrine of nominative fair use, 11 recognized in the Ninth Circuit since New Kids on the Block v. News Am. Publ'g, 971 F.2d 302, 308 (9th 12 Cir. 1992). See also Mattel v. Walking Mountain Prods., 353 F.3d at 816 (9th Cir. 2003); Cairns v. 13 Franklin Mint Co., 292 F.3d 1139, 1156 (9th Cir. 2002). 14 Mr. Carreon also threatened to sue Mr. Recouvreur for cybersquatting, but such a claim can be 15 brought only when the domain name is registered or used with a "bad faith intent to profit." 15 U.S.C. ? 16 1125(d)(1)(A)(i). Cyberqerquatting claims cannot be brought against a web site devoted to criticizing the 17 trademark holder, e.g., Utah Lighthouse Ministry, 527 F.3d at 1058-1059 ; Lamparello, 420 F.3d at 320- 18 321; Lucas Nursery and Landscaping v. Grosse, 359 F.3d 806 (6th Cir. 2004), unless there is some reason 19 to believe that the domain name registrant had made some demand to be paid to relinquish the domain name. 20 Bosley Medical v. Kremer, 403 F.3d 672, 681 (9th Cir. 2005). But when Mr. Levy first spoke to Mr. 21 Carreon about his demand letter, Mr. Carreon admitted that Mr. Recouvreur had not tried to ransom the 22 domain name, Amended Complaint, Levy Fifth Affidavit ? 18, and Complaint Exhibit E; nor were there any 23 of the other indicia of bad faith intent to profit, such as the registration of multiple domain names using 24 trademarks. In sum, this is a case involving groundless cybersquatting and infringement claims under the 25 Lanham Act. It easily merits treatment as an exceptional case. 26 Moreover, although the "groundless or unreasonable" test is an objective one, defendant's conduct 27 shows that he was fully aware that he had no basis for claiming trademark infringement. He refused to 28 waive service of summons because, he said, he did not want to have to defend the litigation, and indeed he -6- Motion for Award of Attorney Fees Under the Lanham Act Case3:12-cv-03435-RS Document42 Filed12/31/12 Page12 of 16 1 thumbed his nose at the efforts to serve him, saying that he was deliberately not going to "expose [him]self 2 to service." Once service was effected, he refused to pay the expenses of service, supposedly because he 3 was going to file a motion to dismiss the complaint, forcing plaintiff file a motion seeking an award of a few 4 hundred dollars in expenses; plaintiff also sought an award of attorney fees for having had to file this 5 motion. And then, when defendant saw that his escape routes had been cut off-- that he had been served, 6 and that plaintiff was not going to let him out of the case--he simply dropped his trademark claims 7 unconditionally and offered judgment. Mr. Carreon's course of conduct speaks volumes about his evident 8 recognition of the fact that his claims were meritless; he provides no reason for believing that his decision 9 to drop them was occasioned by anything that he had learned about the merits during the course of the 10 litigation. 11 Finally, although the groundlessness of the infringement and cybersquatting claims is alone sufficient 12 to support an award of attorney fees under Ninth Circuit precedent, in circuits with a higher standard for 13 finding cases exceptional, a litigant's oppressive conduct is one of the factors considered in support of fee 14 awards. Nightingale Home Healthcare v. Anodyne Therapy, 626 F.3d 958, 963-964 (7th Cir. 2010). 15 Applying that factor, defendant's actions in this case warrant an award of fees. Although plaintiff's counsel 16 tried to steer Mr. Carreon away from his threats of litigation, Mr. Carreon responded by ramping up his 17 threats, trying to put the blogger in fear of significant financial liability by, for example, warning that he 18 would seek statutory damages of $100,000, Complaint Exhibit F ? 4, and would employ counsel instead of 19 proceeding pro se for the precise purpose of running up the blogger's liability for attorney fees, id.? 3; he 20 also boasted of his reputation for "litigating appeals for years." Id. ? 8. Once the litigation was filed, and 21 while he was refusing to submit to service, he sent a letter to Mr. Recouvreur's employer, DN 19-1, Exhibit 22 H, which might have caused trouble at work for Mr. Recouvreur, by threatening to hold the employer liable 23 for the conduct of its employee, and in any event to impose invasive document preservation requirements. 24 And after Mr. Carreon was finally served, he tried to threaten his way out of being held responsible for his 25 baseless threats by making an additional threat to sue the employer of plaintiff's lead counsel, unless counsel 26 induced his client to settle on the terms that Mr. Carreon demanded. DN 35-1, ? 3. Mr. Carreon's decision 27 to offer judgment giving plaintiff his complete success on the merits is perhaps an item in Mr. Carreon's 28 favor in judging his litigation conduct, but in its entirety Mr. Carreon's litigation conduct was sufficient -7- Motion for Award of Attorney Fees Under the Lanham Act Case3:12-cv-03435-RS Document42 Filed12/31/12 Page13 of 16 1 oppressive to form yet another factor in support of a finding that his case was exceptional. 2 Defendant has indicated that he will argue that plaintiff cannot seek an award of attorney fees for 3 litigating the merits because the Declaratory Judgment Act does not provide for attorney fee awards. DN 4 39, at 5. This argument, however, is beside the point, because plaintiff's claim for attorney fees is under the 5 Lanham Act. Although most cases in which fees are awarded in favor of plaintiffs who sought a declaratory 6 judgment under the Lanham Act involved defendants who brought counterclaims seeking injunctive relief 7 or damages for the alleged infringement, courts in the Ninth Circuit and elsewhere have recognized that fees 8 can be appropriate under the Lanham Act, as well as under other intellectual property statutes, where only 9 declaratory relief was sought. Caesar's World v. Milanian, 126 Fed. App'x. 775 (9th Cir. 2005) (fees 10 awarded to declaratory judgment plaintiff under the Lanham Act); Classic Media v. Mewborn, 532 F.3d 978 11 (9th Cir. 2008) (fees denied under both Lanham Act and Copyright Code, but only because declaratory 12 action defendant's infringement claims were not groundless); CACI Intern., Inc. v. Pentagen Technologies 13 Int'l, 70 F.3d 111(4th Cir. 1995) (mem.) (affirming attorney fee award for plaintiff in declaratory judgment 14 action for copyright and Lanham Act noninfringement). See also Brooks Furniture Mfg. v. Dutailier Int'l, 15 393 F.3d 1378 (Fed. Cir. 2005) (assertion of patent claim that spurred declaratory judgment action could 16 support attorney fee, although fee award was overturned because patent claim was not sufficiently 17 unsupported); Special Devices v. OEA, Inc., 269 F.3d 1340 (Fed Cir. 2001) (fees were awarded to 18 declaratory judgment plaintiff who succeeded in obtained declaratory judgment of non-infringement and 19 patent invalidity; appeal from that order dismissed as premature).2 Consequently, the fact this was a 20 declaratory action seeking a judgment of noninfringement does not preclude an award of attorney fees under 21 the Lanham Act where the trademark claims declared invalid were exceptional. 22 C. PLAINTIFF SHOULD BE AWARDED $40,115 IN ATTORNEY FEES 23 The Ninth Circuit, like most circuits, determines attorney fee awards according to the lodestar 24 method, whereby the Court multiplies the number of hours reasonably spent on the litigation by the 25 reasonable attorney fees, determined by reference to the marker for attorney services in the community where 26 27 28 2 Given the similarity of fee-shifting provisions in each of the copyright, patent and trademark fields, decisions under one statute may be invoked in construing the provisions in other intellectual property statutes. Fogerty v. Fantasy, Inc., 510 U.S. 517, 525 n.12 (1994). -8- Motion for Award of Attorney Fees Under the Lanham Act Case3:12-cv-03435-RS Document42 Filed12/31/12 Page14 of 16 1 the district court sits. Camacho v. Bridgeport Fin., 523 F.3d 973, 979 (9th Cir. 2008). For lawyers in 2 private practice, like Ms. Gellis, the presumptively proper hourly rate is the normal billing rate; for lawyers 3 in public service or public interest practice, like Mr. Levy, the rate is determined by reference to market rates 4 for lawyers of similar qualifications. Blum v. Stenson, 465 U.S. 886, 895-896 (1984); Prison Legal News 5 v. Schwarzenegger, 608 F.3d 446, 455 (9th Cir. 2010). 6 Ms. Gellis is a lawyer in private practice whose ordinary billing rate is $300 per hour. Mr. Levy is 7 a public interest lawyer who only represents clients pro bono. The affidavit of Mark Goldowitz, DN 32-3, 8 a lawyer who is familiar both with Mr. Levy's work and with market rates in the Northern District of 9 California, specifically confirms the propriety of Mr. Levy's requested $700 per hour rate. Similarly, the 10 affidavit of Richard Pearl, Levy Second Affidavit, Exhibit X, which was accepted in Rosenfeld v. U.S. Dep't 11 of Justice, -- F. Supp.2d --, 2012 WL 4933317 (N.D. Cal. 2012), and the award of fees in Rosenfeld at the 12 hourly rate of $700 to James Wheaton, a lawyer who is somewhat less experienced than Mr. Levy, Levy 13 Second Affidavit ? 16, supports Mr. Levy's claimed hourly rate of $700. Similarly, Judge Wilken's 14 unreported opinion in Prison Legal News v. Schwarzenegger, No. 4:07-cv-02058-CW, at 7 (N.D. Cal. Dec. 15 5, 2008) (attached to the Levy Fifth Affidavit as Exhibit CC), awarded fees for the senior attorney in that 16 case at the rate of $740 per hour. Because Judge Wilken's ruling was affirmed by Court of Appeals for the 17 Ninth Circuit, 608 F.3d 446, 454 (9th Cir. 2010), and because defendant previously cited Judge Wilken's 18 decision as persuasive authority on the issue of the proper hourly rate, this authority further supports Mr. 19 Levy's claimed $700 hourly rate. Moreover, the Adjusted Laffey Matrix, which is often used in federal court 20 in the District of Columbia to avoid lengthy battles over hourly rates, Smith v. District of Columbia, 466 F. 21 Supp.2d 151, 156 (D.D.C. 2006); Salazar v. District of Columbia, 123 F. Supp.2d 8, 15 (D.D.C. 2000), and 22 which other federal courts have accepted as reasonable, Bond v. Ferguson Enters., 2011 WL 2648879, at 23 *12 (E.D. Cal. June 30, 2011), shows that Mr. Levy's proper hourly rate would be $753. The application 24 for an award of attorney fees for Mr. Levy's work at the rate of $700 per hour is therefore reasonable. 25 The number of hours claimed is supported by the affidavits of Mr. Levy and Ms. Gellis. Because 26 plaintiff was entirely successful, plaintiff is entitled to a fully compensatory fee award, including time spent 27 on individual motions that were unsuccessful. O'Neal v. Seattle, 66 F.3d 1064, 1068-1069 (9th Cir. 1995). 28 As shown by Mr. Levy's affidavit, ?? 21-23, however, counsel have exercised billing judgment by not -9- Motion for Award of Attorney Fees Under the Lanham Act Case3:12-cv-03435-RS Document42 Filed12/31/12 Page15 of 16 1 seeking fees for several hours spent on certain individual aspects of the case, by not asking for compensation 2 for time spent by co-counsel Julie Murray, and by asking for only half the hours spent on one motion in 3 particular, the motion to have service declared effective. In addition, no fees are sought for the efforts of 4 several other colleagues of Mr. Levy at Public Citizen who also worked on the case, or for a significant 5 amount of time devoted to the case by an outside lawyer in private practice who devoted significant time 6 to reviewing drafts and discussing litigation strategy. The total time sought for the work of Mr. Levy and Ms. Gellis is as follows3: 7 8 Lawyer Hours Hourly Rate Total Fee 9 Levy 49.1 $700 $34370 10 Gellis 19.15 $300 5745 11 Total $40115 CONCLUSION 12 13 The motion for an award of attorney fees, in the amount of $40,115, should be granted. 14 Respectfully submitted, 15 /s/ Paul Alan Levy Paul Alan Levy (pro hac vice) Julie Murray 16 Public Citizen Litigation Group 1600 20th Street NW Washington, D.C. 20009 (202) 588-1000 17 18 19 /s/ Catherine R. Gellis Catherine R. Gellis, California Bar #251927 20 21 P.O. Box 2477 Sausalito, California 94966 (202) 642-2849 cathy@cgcounsel.com 22 23 24 December 31, 2012 Attorneys for Plaintiff 25 3 26 27 28 The time sought includes work done on the fee application. Brown v. Sullivan, 916 F.2d 492, 497 (9th Cir. 1990) ("[W]hen fees are available to the prevailing party, that party may also be awarded fees on fees . . .."). It also includes time for which fees have also been sought under Rule 4(d)(2)(B); if that motion is granted in full, then as reflected in the calculation in the Levy Affidavit, ? 24, the fees awarded under the Lanham Act should be reduced by $7490 to avoid duplication. -10- Motion for Award of Attorney Fees Under the Lanham Act Case3:12-cv-03435-RS Document42 Filed12/31/12 Page16 of 16 1 CERTIFICATE OF SERVICE 2 I hereby certify that I am causing a copy of this Motion and Memorandum, as well as the accompanying affidavits and exhibits and proposed order, to be filed by the court's ECF system, which will serve them on defendant Charles E. Carreon. 3 4 /s/ Paul Alan Levy Paul Alan Levy 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -11- Motion for Award of Attorney Fees Under the Lanham Act