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The Marshall Tucker Band, Inc. v. M T Industries, Inc.

United States District Court, D. South Carolina, Spartanburg Division

July 12, 2017





         Pending before the Court is Defendants' Motion for Attorneys' Fees and Costs (Defendants' Motion) pursuant to 15 U.S.C. § 1117(a) and Rule 54(d)(2)(B) of the Federal Rules of Civil Procedure. The Court has jurisdiction over the matter under 28 U.S.C. §' 1331 and 1367(a). Having carefully considered Defendants' Motion, the response, the reply, the supplemental briefing, the record, and the applicable law, the Court will deny Defendants' Motion.


         The following facts are relevant for purposes of Defendants' Motion. Plaintiffs filed this case alleging claims against Defendants for trademark infringement, trademark dilution, declaratory judgment, and trademark cancellation under federal law and for trademark infringement, breach of contract, conversion, violation of the South Carolina Unfair Trade Practices Act, declaratory judgment, and breach of contract accompanied by a fraudulent act under state law. Defendants initially filed a motion to dismiss on May 9, 2016. Because Plaintiffs relied on the Declaration signed by Defendant M T Industries, Inc. (MTI) when it filed its applications to register the trademark at issue with the United States Patent and Trademark Office (USPTO), which was neither contained in nor attached to Plaintiffs' amended complaint, the Court dismissed without prejudice Defendants' motion to dismiss so the parties could conduct discovery on that limited matter.

         Fifteen days later, Plaintiffs requested entry of default as to Defendants, and the Clerk of Court entered default as to Defendants on July 29, 2016. In Plaintiffs' request for entry of default, they asserted the Court denied Defendants' motion to dismiss, which purportedly entitled them to an entry of default given Defendants' failure to file an answer within fourteen days. The parties subsequently resolved the issue of default, and the Court set aside the entry of default as to Defendants.

         Following the period of limited discovery, Plaintiffs filed a Second Amended Complaint (SAC), to which Defendants filed another motion to dismiss. On March 1, 2017, the Court entered an Order granting Defendants' motion to dismiss. The Court first dismissed Plaintiffs' federal trademark infringement claim because Plaintiffs failed to establish MTI's use of The Marshall Tucker Band mark (Mark or Marks) in commerce. The Court likewise held Plaintiffs' federal trademark dilution claim failed as a matter of law because Plaintiffs' allegations in their SAC were insufficient to plead a use in commerce as required under 15 U.S.C. § 1125(c). In light of the fact the Court dismissed the only claims providing independent jurisdiction over the action, the Court dismissed Plaintiffs' federal declaratory judgment and federal trademark cancellation claims for lack of subject matter jurisdiction. Finally, the Court declined to exercise supplemental jurisdiction over Plaintiffs' remaining state law claims.

         Plaintiffs subsequently filed a Rule 59(e) motion to alter or amend the Court's Order granting Defendants' motion to dismiss. On April 25, 2017, the Court amended the conclusion of its prior Order to state the Court dismissed with prejudice Plaintiffs' federal trademark infringement and trademark dilution claims and dismissed without prejudice Plaintiffs' federal declaratory judgment and trademark cancellation claims and state law claims. The Court denied the remainder of Plaintiffs' 59(e) motion, which alleged the Court erred in dismissing their federal trademark dilution claim.

         Meanwhile, Defendants filed Defendants' Motion on March 14, 2017, seeking their reasonable attorneys' fees and costs as the prevailing parties under the Lanham Act, to which Plaintiffs filed a response and Defendants filed a reply. The Court subsequently directed the parties to file supplemental briefs on Defendants' Motion, which the parties did. The Court, having been exhaustively briefed on the relevant issues, is now prepared to discuss the merits of Defendants' Motion.


         Section 1117(a) of the Lanham Act permits the Court to “award reasonable attorney fees to the prevailing party” in “exceptional cases.” 15 U.S.C. § 1117(a). The United States Court of Appeals for the Fourth Circuit has held a court may find a case “exceptional” under the Lanham Act-and, consequently, award attorneys' fees to the prevailing party-where it determines, in light of the totality of the circumstances,

(1) there is an unusual discrepancy in the merits of the positions taken by the parties, based on the non-prevailing party's position as either frivolous or objectively unreasonable; (2) the non-prevailing party has litigated the case in an unreasonable manner; or (3) there is otherwise the need in particular circumstances to advance considerations of compensation and deterrence.

Georgia-Pacific Consumer Prods. LP v. von Drehle Corp., 781 F.3d 710, 721 (4th Cir. 2015) (internal citations and quotation marks omitted).

         Should the Court find a case to be exceptional, warranting an award of attorneys' fees to the prevailing party, the Court must calculate an appropriate attorneys' fee award. Grissom v. The Mills Corp., 549 F.3d 313, 320 (4th Cir. 2008). In doing so, the Court must determine “the lodestar amount, ” defined as a “reasonable hourly rate multiplied by hours reasonably expended.” Id. To identify the reasonable number of hours and reasonable rate to use in calculating the lodestar amount, the Court is guided by the twelve non-exclusive ...

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