The Northern District of California distinguished “exceptional” cases under the Trademark Act (meriting an award of legal fees) from cases in which arguments were made in good faith, but simply failed. The complaint in Blue Bottle Coffee v. Southern Technologies was dismissed. The case then centered around the defendant’s trying to get attorney’s fees from the plaintiff.
Blue Bottle Coffee (“Blue Bottle”) sued because the defendants were selling coffee services and products under the name Blue Brew. And Blue Bottle is a coffee business that sells coffee gear. Leading up to the lawsuit, the Trademark Office rejected the plaintiff’s trademark application for BLUE BOTTLE COFFEE, and the trademark office, finding that BLUE BREW would be confusingly similar to BLUE BOTTLE COFFEE.
Blue Bottle assigned all of its rights to its trademarks to Nestlé, which purportedly licensed back the right to use the trademarks. Although it was no longer the registrant of that trademark, the plaintiff considered itself to be Nestle’s exclusive licensee and believed they had the right to continue using the trademark. Unfortunately for the plaintiff, they were never able to demonstrate those rights because they could not provide a copy of the license — and the court granted summary judgment to the defendants.
The court found that without the licensing agreement, the plaintiff had lacked standing. Similarly, it lacked standing to bring unfair competition claims because there was no injury to its commercial interests or reputation. Although the plaintiff did have standing to cancel the previously registered trademark of the defendants, the court found BLUE BREW was not likely to be confused with BLUE BOTTLE COFFEE in any case (despite the USPTO’s finding the opposite, as it had rejected the plaintiff’s application based on defendant’s registration). Bottom line: in the court’s subjective opinion, there was a lack of similarity in sight, sound, and meaning.
Following that victory, the defendants decided to go for attorney’s fees, citing the weakness in the plaintiff’s case. As we’ve said in other articles, the Trademark Act says that attorney’s fees are only available for exceptional cases.
The first element of determining whether a case is “exceptional” is whether the case is frivolous. The court said that meant there had to be no reasonable or legal basis to believe in success. In this case, the court found, the Plaintiff’s belief that it had exclusive licensing rights was enough to bring the lawsuit.
Perhaps the attorney for the plaintiff should have looked more carefully into their client’s allegation about having an exclusive license, but the failure to jump through an evidentiary hoop (such as documentation of such license) does not make the case exceptional. Neither does the mere fact that a party prevailed in summary judgment. The fact that Blue Bottle, the plaintiff, partially or completely lost every significant disputed motion does not mean that the case was exceptional.
Additionally, Blue Brew’s other allegations to prove the exceptionality of this case read like a list of problems that could arise in any litigation: Blue Bottle sometimes referenced figures and exhibits that did not exist; they questioned defendants using exhibits that were labeled attorney work product; and they sometimes filed documents near or even after midnight. These may have been annoying (and may have contributed to plaintiff’s losing the case), but did not merit attorneys’ fees.
Finally, as far as considering a deterrence, the court already concluded the lawsuit was neither baseless nor frivolous, so there was no need to deter future plaintiffs; or to compensate the defendants.
The desire of defendants to “double tap” the plaintiff could be construed as frivolous in its own way. Or perhaps this defendant’s attorney over-optimistically assured the client that the plaintiff’s claim was so bad, they would recoup the resulting legal bills. However, as it’s been said, “You can’t always get what you want.” Getting the case dismissed, without also getting attorney’s fees, will have to be enough.
