Plaintiffs, Denice Shakarian Halicki, Original Gone in 60 Seconds, LLC, and Halicki Films, LLC (collectively, the “Plaintiffs” or “Halicki”), appeal from so much of a November 14, 2005 summary judgment of the United States District Court for the Central District of California
The Shelby Defendants appeal from the District Court’s denial of their motion for attorneys’ fees under both the Copyright Act, 17 U.S.C. § 505, and the Lanham Act, 15 U.S.C. § 1117(a). Because none of Hal-icki’s claims are frivolous or unreasonable, we affirm the District Court’s conclusion that the Shelby Defendants are not entitled to attorneys’ fees.
I. Background
In 1974, H.B. “Toby” Halicki directed, produced, acted in, and marketed the original motion picture
Gone in 60 Seconds
(the “Original GSS”). Toby Halicki registered a copyright for the Original GSS. The Original GSS featured “Eleanor,” a yellow 1971 Fastback Ford Mustang, customized to appear as a Mach 1 Fastback Mustang. Several years after Toby Hal-icki’s death, plaintiff Denice Halicki, Toby Halicki’s widow, obtained ownership of the 1971 Ford Fastback Mustang used to portray Eleanor and “all right, title and interest, including copyrights, of the film ‘Gone in 60 Seconds’ which were owned by [Toby Halicki].... ”
See Halicki v. Carroll Shelby Int’l, Inc.,
No. CV-04-8813,
On May 17,1995, Halicki entered into an agreement (the “Agreement”) with Hollywood Pictures (“HPC” or “HPC/Disney”), a division of the Walt Disney Company (“Disney”). Under the terms of the Agreement, HPC acquired an option to purchase the rights to produce a remake of the Original GSS. 1 Pursuant to the introductory paragraph of the Agreement, HPC
acquire[d] all sequel, remake and allied, ancillary and subsidiary rights therein of every nature and description in and to the [Original GSS] and any and all underlying rights thereto (collectively, the “Property,” provided that “Property” shall not include the rights reserved to [Halicki] pursuant to Paragraph 5[ ], below) in connection with possible motion pictures ... to be based in whole or in part upon the property.
Thus, “Property” was defined as the Original GSS along with the underlying rights to the Original GSS. The Agreement assigned to HPC “all right, title and interest in the sequel and remake rights in the Property.” Paragraph 4 of the Agreement set forth the “rights granted” to HPC. Paragraph 5 of the Agreement set forth the rights reserved to Halicki. Under Paragraph 5(a), Halicki reserved the right to continue to distribute and exhibit the Original GSS, and under Paragraph 5(b), Halicki reserved the “right to manufacture, sell and distribute merchandise utilizing the car known as ‘Eleanor’ from the Original [GSS].”
On September 19, 2000, Halicki assigned to Original Gone in 60 Seconds, LLC the exclusive right to copy, distribute, exhibit, market, advertise, derive revenues from, turn to account, perform, and otherwise exploit all distribution rights of Halicki to the Original GSS.
See Halicki,
In 2000, Disney released the remake of
Gone in 60 Seconds
(the “Remake GSS”). The Remake GSS also featured a car named Eleanor (the “Remake Eleanor”), but the Remake Eleanor was referred to in the film as (and was customized to appear as) a 1967 Shelby GT-500, a variant of the Ford Mustang developed by defendant Carroll Shelby with the Ford Motor Company. Shelby had secured a United States registration for “GT-500” in 1988. Soon after the release of the Remake GSS, Halicki exhibited Original Eleanor at car shows. Halicki met Carroll Shelby at one of these shows. On September 28, 2001, defendant Carroll Hall Shelby Trust applied for registration of the trademark “Eleanor” for model cars,
Halicki,
On May 11, 2004, Halicki received a registration for the mark “Gone in 60 Seconds” for baseball caps. On October 25, 2004, Halicki filed a complaint against the Defendants based on alleged unauthorized creation of “replicas of Eleanor from ‘Gone in 60 Seconds,’ ” and improper reference to, and/or use of the terms “Eleanor” and “Gone in 60 Seconds” in the marketing of the automobiles manufactured and sold by Unique Motorcars, Inc.
Halicki,
The District Court granted the Defendants’ motion for summary judgment, finding, inter alia, that Halicki lacked standing to bring her claims for copyright infringement, trademark infringement, unfair competition, and declaratory relief because she had no rights in Remake Eleanor, having transferred those rights pursuant to the Agreement.
On November 28, 2005, Halicki filed a motion seeking reconsideration of the District Court’s summary judgment, arguing that the District Court committed reversible error by failing to consider extrinsic evidence — declarations of Halicki and of two of her attorneys, Eric Weissmann and Kirk M. Hallam — supporting her interpretation of the Agreement. On January 5, 2006, Halicki submitted, in further support of her motion for reconsideration, an “Acknowledgment and Agreement” executed by her and by HPC in which HPC stated that it was its intent to reserve to Halicki the rights to Remake Eleanor. The Acknowledgment and Agreement accompanied a declaration of attorney Jeffrey S. Kravitz stating that Halicki’s attorneys had been seeking for nine months to memorialize the intent of the parties at the time of the 1995 Agreement, but that HPC/Disney only agreed to enter into the Acknowledgment and Agreement in light of the November 14, 2005 summary judgment. The District Court denied Halicki’s motion to reconsider, stating that it had considered the Hallam and Weissmann declarations that Halicki claimed the court had ignored. The court made no mention of'the Halicki declaration, the Kravitz declaration, or the Acknowledgment and Agreement.
On November 29, 2005, the Shelby Defendants filed a motion seeking attorneys’ fees, arguing that they were entitled to such fees under 17 U.S.C. § 505 (allowing the prevailing party on a copyright infringement claim to receive attorneys fees as part of costs), and 15 U.S.C. § 1117(a) (providing that “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party” on a trademark infringement claim). On April 27, 2006, the District Court denied the Shelby Defendants’ claim for attorneys’ fees under §§ 505 and 1117, finding that Halicki’s claims were not frivolous or unreasonable.
The timely appeal of Halicki’s claims and the Shelby Defendants’ subsequent claims for attorneys’ fees followed.
II. Standard of Review
This Court reviews
de novo
a district court’s grant of summary judgment.
Levine v. City of Alameda,
525
Decisions by a district court awarding or denying attorneys’ fees under the Copyright Act and under the Lanham Act are reviewed for abuse of discretion.
Stephen W. Boney, Inc. v. Boney Services, Inc.,
III. Discussion
A. Halicki Reserved the Merchandising Rights to Remake Eleanor
“Under copyright law, only copyright owners and exclusive licensees of copyright may enforce a copyright or a license.”
Sybersound Records, Inc. v. UAV Corp.,
Halicki’s primary argument is that Paragraph 5(b) of the Agreement, which grants her the “right to manufacture, sell and distribute merchandise utilizing the car known as ‘Eleanor’ from the Original [GSS],” should be read to grant her rights to manufacture, sell, and distribute merchandise utilizing the Remake Eleanor as well as the Original Eleanor. Halicki claims that reading Paragraph 5(b) as reserving her rights related to the Remake Eleanor is supported by: (1) the language in the Agreement itself; (2) extrinsic evidence that the District Court was required to consider by California law; and (3) the parties’ conduct subsequent to the release of the Remake GSS. Because the District Court’s rulings were based in large part on a contrary interpretation of the Agreement — that, pursuant to the Agreement, Halicki transferred her rights to Remake Eleanor and therefore lacks standing to assert her claims — the interpretation of Paragraph 5(b) of the Agreement is the core issue in this case.
The meaning of Paragraph 5(b) must be determined by reading it in the context of the entire Agreement. Moreover, the extrinsic evidence presented by Halicki must be considered in aid of the interpretation of the contract. Reading Paragraph 5(b) in its context, and examining the extrinsic evidence, we conclude that the District Court erred in its interpretation of Paragraph 5(b) of the Agreement. We agree with Halicki that Paragraph 5(b) reserves to her the merchandising rights to Remake Eleanor.
1. The Agreement
Halicki claims that the plain language of the Agreement supports reservation of her rights to the Remake Eleanor. After examining Halicki’s arguments with respect to the language in the Agreement itself, we conclude that the Agreement is “reasonably susceptible to the interpretation” she urges.
ASP Properties Group v. Fard, Inc.,
First, Halicki argues that Paragraph 5(b) speaks of “the car known as ‘Eleanor’
from
the Original[GSS]” (emphasis supplied by Halicki). We agree that the use
Halicki next asserts that while Paragraph 5(a) speaks of rights to continue to distribute and exhibit the Original GSS, Paragraph 5(b) speaks of the right to “manufacture, sell and distribute,” not to continue to do so; if Paragraph 5(b) was meant to refer only to the Original Eleanor, Halicki contends, it would have granted a right to “continue to manufacture, sell and distribute” merchandise depicting the character Eleanor. We agree that the description of the reserved rights in Paragraph 5(a) as the “right to continue” to distribute and exhibit Original GSS — as opposed to the right in Paragraph 5(b) to “manufacture, sell, and distribute” merchandise related to Original Eleanor— lends support to Halicki’s proposed interpretation of Paragraph 5(b).
Halicki next urges us to examine the interaction between Paragraphs 4 and 5(b). Under Paragraph 4, Halicki granted to HPC
all right, title, and interest of every kind and nature ... to sequels to and/or remakes of the Property, including without limitation the following:
j. The right to manufacture, sell, furnish, supply and distribute products, byproducts, services, facilities, merchandise and commodities of every nature and description ... which make reference to or are based upon or adopted from the Property ..., including, ... the characters, subject to Paragraph 5.b.
Paragraph 5(b) reserves to Halicki “[t]he right to manufacture, sell and distribute merchandise utilizing the car known as ‘Eleanor’ from the Original [GSS].” We agree with Halicki that these two provisions, when read together, are at least capable of supporting her proposed interpretation of the Agreement, even if they do not command it. According to Halicki, Paragraph 4(j) provided HPC with merchandising rights only for products related to a remake of or sequel to the original film. This reading is consistent with the language from Paragraph 4’s introductory paragraph which grants HPC the rights only to “sequels to and/or remakes of the Property.”
2
If we accept Halicki’s view that Paragraph 4 granted HPC merchandising rights only to Remake GSS, then Paragraph 5(b) would be completely superfluous
unless,
as Halicki suggests, it was intended to reserve her rights to produce merchandise related to Remake Eleanor. After all, if Halicki retained all of the merchandising rights to the Original GSS, there would be no reason for her to protect specifically her right to “manufacture, sell and distribute merchandise utilizing” the Original Eleanor in Paragraph 5(b). Because we conclude that the introductory portion of Paragraph 4 renders Halicki’s interpretation of the rights granted in Paragraph 4(j) reasonable, the inclusion of
In a related argument, Halicki contends that Paragraph 7, which grants her merchandising royalties in all products sold by HPC “in connection with Picture or Property, other than the ear from the Original Picture known as ‘Eleanor,’ ” likewise supports her interpretation of the Agreement. Again, if Halicki’s view that the parties intended Paragraph 4 to grant HPC only the rights to Remake GSS merchandise (and not to Original GSS or Original Eleanor merchandise) is reasonable — and we hold that it is — there would be no need to reference “the ear from the Original Picture known as ‘Eleanor’ ” in Paragraph 7 unless that language referred to Remake Eleanor. Thus, Paragraph 7, read in light of Halieki’s reasonable interpretation of Paragraph 4, also supports the interpretation of the contract which would reserve to Halicki the rights to Remake Eleanor.
Accordingly, the plain language of the Agreement permits an interpretation of Paragraph 5(b) as reserving Halicki’s merchandising rights in Remake Eleanor as well as Original Eleanor.
2. The Extrinsic Evidence
In her opposition to the Defendants’ motion for summary judgment, Halicki submitted declarations of two of her attorneys, Kirk M. Hallam and Eric Weiss-mann, each of whom had participated in the negotiations leading up to the Agreement. Each declarant stated that (1) Hal-icki and her attorneys made it clear to HPC/Disney that she was to retain all rights to Eleanor in the Remake as well as the Original GSS; and (2) HPC/Disney accepted that term and intended the Agreement to reflect the reservation of Halicki’s rights in the character Eleanor. Moreover, Hallam declared that the drafts of the Agreement and related notes reflected this understanding. In her opposition to Defendants’ motion for summary judgment, Halicki also submitted a declaration stating that she had made it clear to HPC that her retention of the merchandising rights to “Eleanor” was a “non-negotiable deal point.”
In her motion to reconsider the District Court’s decision, Halicki claimed that the District Court did not consider the Hallam, Weissmann, and Halicki declarations in its summary judgment. After filing the motion for reconsideration, Halicki submitted an “Acknowledgment and Agreement” between HPC and Halicki in further support of her motion, which stated that “HPC hereby acknowledges that as between it and Halicki, Halicki retained the merchandising rights to that certain car called ‘Eleanor’ as such car appears in the Remake [GSS].... ” The Acknowledgment and Agreement accompanied the declaration of attorney Jeffrey S. Kravitz, which stated that Halicki’s attorneys had been trying for nine months to secure such an agreement in writing from HPC and had only been successful once HPC learned of the District Court’s summary judgment.
On April 12, 2006, the District Court denied Halicki’s motion to reconsider its summary judgment. The District Court stated (as memorialized in the civil minutes) that it had considered the Weiss-mann and Hallam declarations in deciding the summary judgment motion but that it had determined that the evidence presented therein did not “yield to a contractual interpretation to which the [Agreement] is reasonably susceptible.” The District Court did not mention the Halicki declaration either in its summary judgment or in its decision on the motion for reconsideration. The District Court also did not mention the Acknowledgment and Agreement, which had been submitted on January 5, 2006.
the trial court must provisionally receive any proffered extrinsic evidence which is relevant to show whether the contract is reasonably susceptible of a particular meaning.... [I]t is reversible error for a trial court to refuse to consider such extrinsic evidence on the basis of the trial court’s own conclusion that the language of the contract appears to be clear and unambiguous on its face.
Morey v. Vannucci,
In its decision denying Halicki’s motion to reconsider, the District Court addressed the Hallam and Weissmann declarations, but it did not even mention the Halicki declaration or the Acknowledgment and Agreement. Lacking any indication that the court considered these documents although specifically asked to do so and although mentioning others, we assume it did not consider the documents not mentioned. The court erred in failing to consider this evidence. These items supported Halicki’s claim of a non-negotiable demand of all rights to Eleanor and of HPC’s intended acquiescence in that demand. The court further erred in concluding that the language in the Agreement was not reasonably susceptible to the interpretation advanced by Halicki in light of the declarations and the Acknowledgment and Agreement. The court was required to use the extrinsic evidence to aid in its interpretation of the contract.
See ASP Properties Group,
Reading the Agreement as a whole along with the extrinsic evidence, Paragraph 5(b) is reasonably susceptible to Halicki’s interpretation. Halicki submitted three declarations — one of her own and two from her attorneys — stating that the reservation of rights in Eleanor was a non-negotiable term and that HPC/Disney understood and agreed to this. Moreover, HPC/Disney — which had nothing to gain by doing so — executed the Acknowledgment and Agreement, making clear that it was its intention that the rights to Remake Eleanor be reserved to Halicki. This is not the more usual situation where parties to an agreement disagree as to the meaning of its terms. Here, statements by both parties to the Agreement — the declarations of Halicki and her attorneys and the Acknowledgment and Agreement executed by HPC/Disney — demonstrate that each party had the same intention as to the meaning of Paragraph 5(b).
3
Having con-
B. Whether the Eleanor Character Is Entitled To Copyright Protection
The Defendants assert on appeal that the Eleanor character does not qualify for copyright protection.
This Court has stated that where a character “is only the chessman in the game of telling the story he is not within the area of the protection afforded by the copyright.”
Warner Bros. Pictures, Inc. v. Columbia Broad. Sys., Inc.,
This Court has also recognized copyright protection for characters that are especially distinctive,
see Olson v. Nat’l Broad. Co.,
The District Court did not directly examine the question of whether Eleanor is a character deserving of copyright protec
The Eleanor character can be seen as more akin to a comic book character than a literary character. Moreover, Eleanor “display[s] consistent, widely identifiable traits,”
see Rice,
C. Halicki’s Trademark Claims
The District Court held that Halicki lacked standing to sue for common law infringement of either the “Eleanor” or “Gone in 60 Seconds” trademarks. We cannot agree. With respect to the “Eleanor” mark, the District Court’s failure to evaluate Halicki’s contentions that she acquired an ownership interest in the mark through prior use and that she had a cognizable commercial interest in the mark renders the court’s standing analysis fatally incomplete. We therefore reverse the District Court’s decision and remand for further consideration. We likewise reverse the District Court’s ruling that Hal-icki lacked standing to sue for infringement of the “Gone in 60 Seconds” mark. As the court acknowledged, Halicki is the registered owner of the “Gone in 60 Seconds” mark for two product classes, “toy model cars and toy model car kits” and “baseball caps.” A valid ownership interest in a mark (for any product class) is sufficient, although not necessary, to provide standing to sue for infringement of that mark. See 15 U.S.C. §§ 1114(1), 1125(a). We therefore hold that Halicki has standing to sue for infringement of the “Gone in 60 Seconds” mark.
1. Standing Requirements For a Trademark Infringement Claim
To establish standing to sue for trademark infringement under the Lanham Act, a plaintiff must show that he or she is either (1) the owner of a federal mark registration, (2) the owner of an unregistered mark, or (3) a nonowner with a cognizable interest in the allegedly infringed trademark.
5
See
15 U.S.C. §§ 1114(1),
2. The “Eleanor” Mark
The District Court found that Halicki lacked standing to bring her trademark claims based on the “Eleanor” mark solely because she had not proffered evidence that she was the registered owner of the mark. In addition, the court noted that the Defendant Carroll Hall Shelby Trust had produced evidence that it was the registered owner of the mark for “vehicles, namely, automobiles, engines for automobiles, and structural parts of automobiles.”
Halicki,
The District Court’s analysis suffers from a fundamental flaw. Halicki does not argue that she has standing to sue for infringement of the “Eleanor” mark as a registered owner of the mark. Rather, Halicki asserts standing on other grounds.
First, she maintains that she has acquired ownership of the “Eleanor” trademark through prior use. In other words, Halicki is asserting her rights as the owner of an
unregistered
trademark. “It is axiomatic in trademark law that the standard test of ownership is priority of use.... [I]t is not enough to have invented the mark first or even to have registered it first; the party claiming ownership must have been the first to actually use the mark in the sale of goods or services.”
Sengoku Works Ltd. v. RMC Int’l, Ltd.,
Whether Halicki has acquired ownership of the “Eleanor” mark through prior use in commerce is a fact-intensive inquiry that requires the District Court to evaluate “the totality of the circumstances” of Halicki’s case.
6
See Chance v. Pac-Tel Teletrac Inc.,
The District Court did not reach Hal-icki’s nontrademark owner standing argument. If the District Court determines on remand that Halicki has not established ownership of the “Eleanor” mark through prior use — and therefore does not have standing on that basis — the court must then consider Halicki’s argument that she is a non-owner with a “commercial interest in the allegedly misused mark that is likely to be damaged.”
See Nat’l Licensing Ass’n, LLC,
3. The “Gone in 60 Seconds” Mark
With respect to the “Gone in 60 Seconds” mark, the court found that Hal-icki lacked standing because Halicki’s registered marks for “Gone in 60 Seconds” are for toy model cars, toy model car kits, and baseball caps, whereas the Defendants only manufacture, produce, and sell restored vehicles fitted and detailed to replicate the 1960s Shelby GT-500 and GT-350
automobiles
— ie., actual cars.
Halicki,
Although we do not reach the merits of Halicki’s “Eleanor” or “Gone in 60 Seconds” trademark infringement claims, we note that the defendants’ use of those marks on
products
— ie., automobiles and automobile parts — that do not directly compete with products sold with Halicki’s
mark
— ie., toy cars, toy model car kits, baseball caps, and t-shirts — is not disposi-tive of the merits of Halicki’s claim.
See
MCCARTHY, TRADEMARKS AND UNFAIR COMPETITION,
supra,
at § 24:2 (“Occasionally, a modern court will fall into the error of thinking that there must be competition between the parties for trademark infringement to occur.”);
see, e.g., Hallmark Cards, Inc. v. Hallmark Dodge, Inc.,
[The] basic premise — that a trademark provides protection only when the defendant uses the mark on directly competing goods — is no longer good law. Although this notion survived into the early 1900s, it has long since been su-perceded.
Team Tires Plus, Ltd. v. Tires Plus, Inc.,
D. Standing to Seek Declaratory Relief
Halicki contends that the District Court erred by finding that she did not have standing to seek a declaratory judgment cancelling the “Eleanor” trademark registration of the Defendant Carroll Hall Shelby Trust. We have explained the standing requirements for a cancellation claim brought under § 1064 of the Lanham Act:
The Lanham Act requires only that the cancellation petitioner plead and prove facts showing a ‘real interest’ in the proceeding in order to establish standing. While [n]o absolute test can be laid down for what must be proved, a cancellation petitioner must show he is more than an intermeddler but rather has a personal interest, and that there is a real controversy between the parties. Thus, his allegations alone do not establish standing. The petitioner, instead, must show a real and rational basis for his belief that he would bedamaged by the registration sought to be cancelled, stemming from an actual commercial or pecuniary interest in his own mark. Interest assertions will vary with the facts surrounding each cancellation dispute and therefore, a petitioner’s standing must be scrutinized case-by-case. Examples of what courts have countenanced as reasonable bases are: an assertion of a likelihood of confusion [between the petitioner’s mark and the registered mark at issue] which is not wholly without merit, ... or ... a rejection of an application during prosecution.
Star-Kist Foods, Inc. v. P.J. Rhodes & Co.,
The District Court also found that Hal-icki did not have Article III standing— specifically, the court found that Halicki had not shown an injury-in-fact because she provided no evidence such as lost profits from the Defendants’ merchandising of Eleanor. The District Court has conflated the Article III requirement of alleging an injury-in-fact with the burden of production required to defeat summary judgment. Halicki submitted two expert reports estimating damages in excess of $7 million. It is not clear from the District Court’s opinion if it considered this evidence and rejected it or if it did not consider it at all. In any event, the District Court erred by concluding that a lack of evidence supporting an alleged injury-in-fact deprived Halicki of Article III standing. Halicki has alleged an injury-in-fact and submitted evidence on it sufficient to preclude summary judgment for lack of standing. Moreover, Halicki has statutory standing under the Lanham Act because she retains the merchandising rights to Remake Eleanor and, as stated above, an issue exists as to whether the Defendants’ use of the mark “Eleanor” has created a likelihood of confusion in the marketplace.
E. Halicki’s Other Claims
The District Court rejected Halicki’s claim for constructive trust based on its understanding that she did not have standing to bring suit for trademark infringement. In view of the foregoing, the District Court should revisit her constructive trust claim in the event that she establishes trademark standing and infringement.
To the extent the District Court granted the Defendants’ summary judgment motion as to Halicki’s remaining federal law claim for false advertising and unfair business competition and state law claims for intentional or negligent interference with prospective economic advantage, Halicki has waived any challenges to the dismissal of these claims. Halicki’s two passing references to “related state claims” in the argument section of her opening brief are insufficient to preserve those remaining state and federal claims for appellate review.
See Reusser v. Wachovia Bank, N.A.,
Halicki also challenges the District Court’s dismissal for lack of standing of her state claim for unfair competition under Cal. Bus. & Prof.Code § 17200 et seq. The District Court based its dismissal on its prior conclusion that Halicki had retained only an interest in the Original Eleanor, not Remake Eleanor. As we have now concluded otherwise, we reverse the District Court’s ruling on this issue and hold that Halicki has standing to bring her state unfair competition claim.
F. Cross-appeal: Defendants are not entitled to attorneys’ fees under 17 U.S.C. § 505 of the Copyright Act or 15 U.S.C. § 1117(a) of the Lan-ham Act
The Shelby Defendants claim that the District Court erred in denying their request for attorneys’ fees, arguing that because the District Court found that the plain language of the Agreement precluded Halicki’s claims, those claims were therefore frivolous. As stated above, this Court reviews the District Court’s denial of the Shelby Defendants’ motion for attorneys’ fees for abuse of discretion.
See Stephen W. Boney, Inc.,
The Copyright Act under 17 U.S.C. § 505 provides for recovery of reasonable attorneys’ fees by the prevailing party in a civil action. In
Fogerty v. Fantasy, Inc.,
In deciding whether to award attorneys’ fees, courts in this Circuit consider certain factors, including (1) “the degree of success obtained; [ (2) ] frivolousness; [ (3) ] motivation; [ (4) ] objective unreasonableness (both in the factual and legal arguments in the case); and [ (5) ] the need in particular circumstances to advance considerations of compensation and deterrence.”
Jackson v. Axton,
The District Court applied the factors articulated in
Jackson
and denied the Shelby Defendants’ claim for attorneys’ fees pursuant to § 505, concluding that (1) the claims were not “frivolous, fanciful, or clearly baseless”; (2) Plaintiffs’ motivation in bringing the claims was to protect an interest that they believed was theirs; and (3) the Plaintiffs’ claims were not unreasonable and were decided on the basis of standing, not on the question whether the Shelby Defendants were in fact copyright infringers. The Shelby Defendants claim that the District Court abused its discretion in applying the factors. According to the Shelby Defendants, Halicki’s copyright claims were frivolous and unreasonable because: (1) “it is highly doubtful” that the Eleanor character qualifies for copyright protection; and (2) Halicki had no standing to assert any claims based on copying of Remake Eleanor. The Shelby Defendants claim that Halicki could not have
Attorneys’ fees under the Lanham Act are awarded in “exceptional cases.” 15 U.S.C. § 1117(a). An exceptional case is found where “a plaintiffs case is groundless, unreasonable, vexatious, or pursued in bad faith.”
Stephen W. Boney, Inc.,
The District Court’s denial of attorneys’ fees under 17 U.S.C. § 505 and 15 U.S.C. § 1117 is affirmed.
IV. Conclusion
The judgment of the District Court with respect to Plaintiffs’ claims is VACATED. The case is REMANDED for further proceedings consistent with this opinion. The judgment is AFFIRMED with respect to the District Court’s denial of the Shelby Defendants’ claims for attorneys’ fees.
Notes
. HPC exercised its option on October 12, 1995, thereby acquiring the rights set forth in the Agreement.
. On the other hand, Paragraph 4(j)’s grant to HPC of the merchandising rights to any products “which make reference to or are based upon or adopted from the Property’’ could be read, as the Defendants suggest, to grant HPC the merchandising rights even to products related to the Original GSS. The central issue at this point, however, is whether the contract is at least "reasonably susceptible to the interpretation urged by” Halicki.
See ASP Properties Group,
. Halicki also argues that the fact that HPC/Disney has not made any efforts to market Remake Eleanor is further evidence that the merchandising rights to Remake Eleanor belong to her. Although HPC’s failure to engage in merchandising Remake Eleanor is
. Halicki contends that even if she were not a legal owner of the merchandising rights to Remake Eleanor, she could still pursue the copyright claims either because (1) she is a beneficial owner of the copyright due to her royalty interest in the Remake GSS or (2) she is the owner of the Original Eleanor copyright and Remake Eleanor is a derivative work. We need not reach either question, as we have concluded that Halicki can assert her claims as legal owner of the rights to Remake Eleanor and so need not rely on other bases for doing so.
. The District Court asserted that "Plaintiffs concede that the common law [of trademark infringement] and the Lanham Act standing requirements are similar.”
Halicki,
. In support of her prior use argument, Hal-icki alleges that she (1) licenses the Original GSS for use on DVDs and VHS tapes with "Eleanor” on the package, (2) licensed the "Eleanor” name and likeness for a line of toy cars, and (3) exhibited the Original Eleanor at auto shows. She also asserts that Toby Hal-icki sold “Eleanor’-related merchandise, such as t-shirts, before his death.
. The District Court may have found it unnecessary to explore Halicki's prior-use arguments because it also concluded that Halicki had assigned to HPC any rights that she owned to Remake Eleanor and therefore lacked standing under the Lanham Act to bring a lawsuit related to the use of the "Elea