Nov 26, 2018 Ninth Circuit Court of Appeals Orders Stay in Lanham Act Case
In a bitterly fought litigation over the term “comic-con,” the Ninth Circuit Court of Appeals recently ordered a stay pending the appeal of a large attorney’s fees award. This case goes back several years and spans a costly litigation pitting two different conventions from two cities against each other.
As the case wound down to a close, several rulings from the bench led to a verdict for the convention in San Diego. The San Diego jury ruled against the Salt Lake comic convention, and awarded the San Diego convention $20,000 in damages. Then the court made several rulings to prevent the Salt Lake convention from referencing to comic-con.
What followed made headlines across the legal world. Because the case took so long and was so contentious, both sides racked up huge legal bills. As part of their petition, the San Diego comic convention asked the court to order their attorney’s fees paid by the defendant, and the court did. The total order was for over $4 million.
Appeal and Stay from the Court of Appeals
Once the ruling was handed down, the Salt Lake convention immediately appealed the results. In addition, they asked the Ninth Circuit Court of Appeals to stay, or postpone, the enforcement of the attorney’s fees judgment until the appeals court could decide on the merits of what happened at the district court level.
The circuit court granted the stay, which will allow the convention to not pay the attorney’s fees award until the case is decided by the court. This is an important first step anytime an award of attorney’s fees is being appealed.
Lanham Act Overview
The Lanham Act was passed by Congress in the summer of 1946 and provides intellectual property rights and protections to owners of a trademark. A trademark is the mark of trade or sign of which represents a particular company. Trademark protection is essential to any company to prevent other companies from selling their own products while using a trademark of another.
This protection goes back further than 1946 as a common law right inherited from the British legal tradition. But the Lanham Act ensured that applying trademark law was uniform and enforced across the entire country, without the different applications in each state.
Attorney’s Fees and the Lanham Act
One important aspect of the Lanham Act allows for attorney’s fees in certain instances. The law allows the prevailing party to apply for and be granted their attorney’s fees in exceptional cases. The meaning of exceptional is largely left to the court’s discretion, but as this case reveals, when a case stretches out over a long period, the fees incurred can easily reach into the millions of dollars. Such awards can outpace even the jury verdict.
There are two lessons here. One is that if a company pursues a Lanham Act case that is not likely to win, it risks being on the wrong end of an award of attorneys fees. The second lesson is to be aware that attorneys fees can be awarded only to parties that have a registered trademark, and are not awarded to a litigant that only has a “common law” (i.e., unregistered) trademark.
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