Case Information
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA TECHSHOP, INC., Case No. 18-cv-01044-HSG Plaintiff, ORDER DENYING MOTIONS FOR JUDGMENT AS A MATTER OF LAW, v. PERMANENET INJUNCTION, NEW TRIAL, ATTORNEYS’ FEES, AND DAN RASURE, et al., REVIEW OF TAXATION Defendants. Re: Dkt. Nos. 227, 238, 240, 254, 256, 257,
Pending before the Court are several post-trial motions filed by Plaintiff TechShop, Inc. and Defendants Dan Rasure, TechShop 2.0 LLC, and TechShop 2.0 San Francisco LLC. The Court finds these matters appropriate for disposition without oral argument and the matter is deemed submitted. See Civil L.R. 7-1(b). For the reasons detailed below, the Court DENIES the motions in their entirety.
I. BACKGROUND
A. Factual Background
Plaintiff initially filed this trademark action on February 16, 2018, against Dan Rasure, TechShop 2.0 LLC, and TechShop 2.0 San Francisco LLC. Dkt. No. 1. Plaintiff is the owner of two federally registered service marks in the word “TECHSHOP,” for use with services related to providing workshop facilities, or “makerspace,” and opportunities for trainings and networking in the fields of manufacturing and fabrication. Tr. Exs. 351, 352. [1] The registrations specifically state that the marks “consist[] of standard characters without claim to any particular font, style, size, or color.” See id. Plaintiff was founded in 2006 to provide “makerspace,” where members of the public could join and use tools to build projects. See Tr. Ex. TX0028 at DR003067. Starting with a single location in Menlo Park, Plaintiff expanded and ultimately operated makerspaces in ten locations around the United States with 9,000 members. See id. at DR003063; see also Dkt. No. 242 (“Trial Tr. Vol. 2”) at 209:4–6.
In mid-November 2017, Plaintiff experienced financial difficulties and closed its U.S. locations in anticipation of filing for bankruptcy. See, e.g. , Trial Tr. Vol. 2 at 123:17–125:14. Shortly thereafter, Mr. Rasure approached Plaintiff to purchase TechShop. at 126:4–127:9, 128:25–131:9. The parties executed a Memorandum of Understanding (“MOU”) on December 1, 2017. See Tr. Ex. 48; Trial Tr. Vol. 2 at 131:10–135:7; Dkt. No. 249 (“Tr. Vol. 4”) at 680:23–24. The non-binding MOU explained that TechShop was willing to sell all of its assets to a third-party buyer, TechShop 2.0, LLC, in exchange for assuming TechShop’s secured debt; assuming equipment land property leases; paying approved employee backpay; and paying a maximum of $200,000 for administrative expenses incurred during and for purposes of the negotiation. See Tr. Ex. 48. The MOU noted that the details would “be finalized in definitive documentation to be prepared by TechShop 2.0 and approved by the Board of Directors of TechShop, Inc.” Id. The parties then announced the deal publicly, explaining that “[t]he next iteration of TechShop is in the works.” Tr. Exs. 501, 505, 527–28, 530. The announcement explained that TechShop had reached an agreement in principle to sell the entire company to TechShop 2.0, LLC. However, on December 12, 2017, TechShop advised Mr. Rasure that it was terminating the MOU, citing concerns that he had “consistently failed to provide the information or funding necessary to permit the transaction to proceed.” Tr. Ex. 919; see also Trial Tr. Vol. 3 at 388:1–390:18; 433:22–436:19; Exs. 59–60. TechShop did not cut off negotiations with Mr. Rasure entirely after terminating the MOU, but instead also started exploring other parties who had expressed some interest in a deal with TechShop. Trial Tr. Vol. 3 at 436:2–19, 438:3–7. However, TechShop’s Board of Directors found that Mr. Rasure’s latest proposal—to rent facilities and equipment from TechShop rather than purchase its assets outright—was unworkable given their current financial situation. at 444:16–445:18; see also Tr. Ex. 646. On February 7, 2018, the Board sent an email to Mr. Rasure explaining that it decided not to accept the rental proposal, and that it was preparing its “imminent” bankruptcy filing. See Tr. Ex. 78.
Although the parties had not reached a deal, two days later, on February 9, 2018, Defendants announced that TechShop 2.0 would reopen the former TechShop facility in San Francisco. See Tr. Ex. 273; see also Trial Tr. Vol. 2 at 178:10–181:18. The announcement stated that TechShop 2.0 had “completed a transaction to purchase the equipment located at the facility and entered into a new lease for the facilities.” Tr. Ex. 273. It also directed readers to www.techshop2.com for more information. Again on February 12, 2018, Mr. Rasure announced publicly that TechShop 2.0 would open in San Francisco on February 19, and provided a link to its website for membership sign-ups. See Tr. Ex. 324; see also Trial Tr. Vol. 3 at 445:19– 447:22. On February 14, 2018, Plaintiff sent Mr. Rasure a letter explaining that he did not have the right to use the TechShop service marks, or any of TechShop’s other assets. See Tr. Exs. 334, 335. Mr. Rasure responded “[t]hank you” in acknowledgement. Tr. Ex. 335; Trial Tr. Vol. 2 at 188:14–189:9. The next day, the San Francisco Chronicle published an article about TechShop 2.0’s opening in San Francisco. See Tr. Ex. 337. The article quoted Mr. Rasure and contained a picture of him in the San Francisco location below a TechShop sign. See id. Defendants shared this article on their Facebook group. See Tr. Ex. 322; see also Trial Tr. Vol. 2 at 193:11–21. On February 16, 2018, Plaintiff’s counsel sent Mr. Rasure another letter, demanding that he stop using the TechShop 2.0 name. Tr. Ex. 656. Attached to the letter was the complaint in this action. Id. In the complaint, Plaintiff alleges that, without authorization, Defendant Rasure formed two entities—Defendants TechShop 2.0 LLC and TechShop 2.0 San Francisco LLC—that infringed the TechShop service marks in connection with makerspace services. Dkt. No. 1 at ¶¶ 3–4, 20–29.
Following the February 16 letter and the filing of this action, Defendants worked to change their name from TechShop 2.0 to TheShop.build. Trial Tr. Vol. 5 at 741:21–745:17, 891:15– 20; see also Tr. Ex. 531. However, Defendants still continued to use TechShop 2.0 in various correspondence. See, e.g. Trial Tr. Vol. 5 at 837:4–852:15. For example, on March 2, 2018, Defendants created an event entitled “Pizza with Dan Rasure TechShop 2.0” and posted it online with Eventbrite. See Tr. Ex. 148; see also Trial Tr. Vol. 5 at 22–845:4. On March 5, Mr. Rasure continued to use the email address dan.rasure@techshop2.com. See Tr. Ex. 150. On March 6, Mr. Rasure received an email from a customer noting that the website still listed “TechShop 2.0” on the membership sign-up page. See Tr. Ex. 152. As late as May 3, the TechShop 2.0 email was still active and customers used it to correspond with Defendants. See Tr. Ex. 268. And on May 11, Defendants still signed vendor agreements as TechShop 2.0. See Tr. Ex. 89. Defendants did not formally change the name of the legal entities to TheShop.build until April 6, 2018. See Tr. Ex. 25 at DR002745.
B. Procedural History On February 26, 2018, Plaintiff field a voluntary petition for relief under Chapter 7 in the United States Bankruptcy Court for the Northern District of California. See Dkt. No. 45 at ¶ 11. On August 13, 2018, Doris A. Kaelin in her capacity as Chapter 7 Trustee for TechShop, Inc. filed an amended complaint in this action against the same Defendants, alleging that Defendants infringed the TechShop service marks. Dkt. No. 45. On July 26, 2018, Defendants filed a cross-complaint, alleging that Plaintiff made false and misleading representations, and promises that it did not intend to perform, to induce Mr. Rasure to sign the MOU and make payments related to the negotiations. See id. On the basis of these allegations, Defendants brought claims for fraud and wire fraud. The Court subsequently granted Plaintiff’s motion to dismiss the wire fraud claim without leave to amend, but allowed the fraud claim to proceed. Dkt. No. 110.
Trial in this action commenced on June 3, 2019. On June 12, the jury returned a verdict finding that “TECHSHOP” is a valid service mark; Plaintiff owns the “TECHSHOP” marks; and the “TECHSHOP” service marks were not abandoned. Dkt. No. 217 at 1. The jury further found that Defendants intentionally and willfully used the names TechShop 2.0 and TheShop.build without Plaintiff’s consent, and in a manner likely to cause confusion among ordinary consumers as to the source, sponsorship, affiliation, or approval of the services. at 2–4. However, the jury found that Plaintiff did not suffer actual damages in lost licensing revenue as a result of this infringement. See id. With respect to Defendants’ counterclaim for fraud, the jury found that Plaintiff did not make a false promise to Mr. Rasure. at 4.
On June 26, 2019, the Court entered judgment in favor of Plaintiff and against Defendants. Dkt. No. 223. The parties have since filed several post-trial motions for: judgment as a matter of law, Dkt. No. 254; new trial as to Plaintiff’s damages, Dkt. No. 238; a permanent injunction preventing Defendants’ use of the TechShop 2.0 and TheShop.build names, Dkt. No. 240; attorneys’ fees and costs filed by both parties, Dkt. Nos. 227, 257; and review of taxation as to Defendants, Dkt. No. 258. Defendants have also filed a trial brief raising equitable relief defenses. Dkt. No. 256. The Court addresses each in turn.
II. RENEWED MOTION FOR JUDGMENT AS A MATTER OF LAW
A. Legal Standard
“[A] party must make a Rule 50(a) motion for judgment as a matter of law before a case is
submitted to the jury. If the judge denies or defers ruling on the motion, and if the jury then
returns a verdict against the moving party, the party may renew its motion under Rule 50(b).”
Equal Emp’t Opportunity Comm’n v. Go Daddy Software, Inc.
,
//
B. Discussion
On June 6, after Plaintiff rested its case, Defendants orally moved for judgment as a matter of law under Rule 50(a) and stated the grounds for the motion on the record. See Trial Tr. Vol. 4 at 658:1–8, 705:24–708:18. Defendants argued that Plaintiff had not established that Defendants used either TechShop 2.0 or TheShop.build without Plaintiff’s consent or that there was any likelihood of confusion with the TECHSHOP service marks. [2] Defendants filed their written motion for judgment as a matter of law under Rule 50(a) on June 10 on these two bases. See Dkt. 207. The Court reserved decision on the motion. Trial Tr. Vol. 7 at 1039:17–1040:5. Defendants now move for judgment as a matter of law that their use of TechShop 2.0 and TheShop.build did not infringe Plaintiff’s service marks. Dkt. No. 254.
i. TechShop 2.0 Defendants’ argument that their use of TechShop 2.0 did not infringe Plaintiff’s service marks is twofold: (1) Plaintiff consented to the use; and (2) the use was de minimis because Defendants did not use the TechShop 2.0 name after February 16, 2018. The Court finds that there is substantial evidence to support the jury’s finding of infringement, including that Defendants used the name TechShop 2.0 without consent. First , Plaintiff’s witnesses testified that they did not consent to Defendants’ use of the name TechShop 2.0 for the purpose of opening a makerspace. Trial Tr. Vol. 2 at 177:21–24; Trial Tr. Vol. 3 at 400:21–401:23. James Newton, the founder of TechShop, testified that Plaintiff had never told Mr. Rasure that he had the right to use the service marks to open a makerspace. Trial Tr. Vol. 2 at 177:21–24. Similarly, Dan Woods, the CEO of TechShop, testified that at the time Mr. Rasure announced that a makerspace in San Francisco would be opened under the name TechShop 2.0, Mr. Rasure had not acquired the right from Plaintiff to use the TechShop service marks. See Trial Tr. Vol. 3 at 301:2–17, 399:13–401:23. Douglas Busch, a member of TechShop’s Board of Directors, explained that the Board believed that TechShop’s service marks were the company’s most significant assets, and that if Plaintiff had finalized a deal with Mr. Rasure, he would have acquired these marks. at 415:10–25, 423:17–23, 444:2–9, 445:25– 447:6. The use of TechShop 2.0—and thus, Plaintiff’s service marks—for makerspace was contingent on reaching a deal with Plaintiff pursuant to the MOU. See id. However, at the time he announced the opening of TechShop 2.0, there was no deal between the parties. See Tr. Ex. 78.
In the face of this testimony, Defendants did not point to evidence of any affirmative consent from Plaintiff to its use of TechShop 2.0. Mr. Rasure, for his part, simply testified that he thought he was permitted to use the name because “nobody had ever told [him] [he] couldn’t use the name or logos.” Vol. 5 at 890:20–891:4. Defendants also rely heavily on the idea that Plaintiff knew about “TechShop 2.0” from late November 2017 through February 14, 2018, and did not object. Dkt. No. 254 at 5, 13–14. Failing to object, however, is not tantamount to consent. And although Plaintiff at times referred to Mr. Rasure’s company as TechShop 2.0 in some correspondence, there is evidence in the record that this was done as part of the negotiations and in reference to the proposed legal entity that would acquire the TechShop service marks. See Trial Tr. Vol. 3 at 301:2–17, 399:13–401:23, 445:25–447:6. Even the public announcement in December 2017 indicated that TechShop 2.0 was “[t]he next iteration of TechShop” based on an agreement in principle in which TechShop would “sell the entire company.” See e.g. , Tr. Ex. 501; see also Tr. Ex. 614 (referring to TechShop 2.0 as “[t]he new TechShop”). Based on this evidence, a reasonable jury could find that Plaintiff did not consent—explicitly or tacitly—to any use of TechShop 2.0 outside this negotiation setting.
In response, Defendants rely on two cases to suggest that testimony from Plaintiff’s
witnesses is somehow insufficient to establish lack of consent. Dkt. No. 254 at 14 (citing
Villiarimo v. Aloha Island Air, Inc.
,
ii. TheShop.build Next, Defendants argue that their use of TheShop.build did not infringe Plaintiff’s service marks because: (1) Plaintiff consented to the use; and (2) there is no evidence of a likelihood of confusion between TheShop.build and Plaintiff’s service marks. As to the first argument, Defendants again conflate lack of objection with consent. There is ample evidence in the record that as of February 16, 2018, Plaintiff had not finalized a deal with Mr. Rasure to acquire its service marks, and that Plaintiff understood the use of their marks to be contingent on such a deal. Trial Tr. Vol. 3 at 301:2–17, 399:13–401:23, 415:10–25, 423:17–23, 444:2–9, 445:25–447:6. As to the second argument, the Court considers the evidence presented at trial in conjunction with the eight-factor test the Ninth Circuit has articulated—the “ Sleekcraft factors”—to determine whether there is substantial evidence of a likelihood of confusion.
The
Sleekcraft
factors include: (1) the strength of the allegedly infringed mark; (2) the
relatedness or proximity of the parties’ services; (3) the similarity of the parties’ marks;
(4) evidence of actual confusion; (5) the marketing channels used by the parties; (6) the degree of
care likely to be exercised by the purchasers of the parties’ products; (7) the alleged infringer’s
intent in selecting the mark; and (8) the likelihood of expansion of the parties’ product lines.
See
AMF Inc. v. Sleekcraft Boats
,
“The similarity of the marks is ‘a critical question in the likelihood-of-confusion
analysis.’”
La Quinta Worldwide LLC v. Q.R.T.M., S.A. de C.V.
,
In assessing the similarity of TheShop.build to the TechShop service marks, Defendants
urge that only the words of the marks matter, and any similarity in color or design is immaterial,
because Plaintiff’s service marks only cover the word “TECHSHOP” in standard characters.
See
Dkt. No. 254 at 17–18 (citing Tr. Exs. 351, 352). The Court is not persuaded by Defendants’
attempt to narrow the scope of the inquiry. Plaintiff’s standard character marks “cover[] all design
variations of the word” “TECHSHOP,” and as such are “extremely broad.”
See Pom Wonderful
,
Cir. 2011)); see also 37 C.F.R. § 2.52. Moreover, the Ninth Circuit has clarified that when assessing the similarity of even standard character marks, trade dress is still relevant because courts “do[] not consider the similarity of the marks in the abstract, but rather in light of the way the marks are encountered in the marketplace and the circumstances surrounding the[m].” at 1128, n.7.
As used in the marketplace, the marks at issue here are quite similar: Tr. Ex. 357. When Defendants initially changed their name to TheShop.build, they used the mark below from at least February 19 through February 21, 2018: Tr. Ex. 327; see also Trial Tr. Vol. 5 at 890:7–19. The color scheme, size, and spacing above highlight that “TECHSHOP” and “THESHOP” appear nearly identical, except for the addition of a “c” in TECHSHOP. Defendants urge that such comparisons ignore the suffix “.build” in TheShop.build. But Defendants have deemphasized this suffix in the marketplace by using smaller, lower-case font in all black lettering. The marks also have similar sound and cadence, with a two-syllable phrase ending in “shop.” Cf. Beer Nuts, Inc. v. Clover Club Foods Co. , 805 F.2d 920, 926 (10th Cir. 1986) (holding that “Brew Nuts” and “Beer Nuts” were similar marks in part because the words “Brew” and “Beer,” although “not identical, . . . have a similar sound”). This factor weighs strongly in favor of Plaintiff.
Even if the Court were to ignore the similarity of the marks as seen in the marketplace, the
similarity of the two logos above may be considered in evaluating Defendants’ intent. “[I]ntent to
deceive is strong evidence of a likelihood of confusion.”
Entrepreneur Media, Inc. v. Smith
, 279
F.3d 1135, 1148 (9th Cir. 2002) (quotations omitted). “When the alleged infringer knowingly
adopts a mark similar to another’s, reviewing courts presume that the defendant can accomplish
his purpose: that is, that the public will be deceived.”
Sleekcraft
,
Plaintiff also provided evidence of actual confusion in the marketplace. For example, on February 18, 2018, a customer emailed Defendants explaining that he “was currently a member when you closed in November,” and complaining that he was having trouble “re-sign[ing] up for membership.” Tr. Ex. 94. On February 20, a customer emailed TheShop.build stating that he was “VERY VERY happy that the TechShop is finally opened for business again!” Tr. Ex. 135. He also asked questions about what information he would need to provide Defendants about his prior membership and certifications from TechShop. Id. And on February 21, 2018, another customer emailed TheShop.build stating that “I understand that Techshop is under new management,” and asking if his prior membership could be “reinstated.” See Tr. Ex. 98. Defendants suggest that such confusion does not matter as Plaintiff filed for bankruptcy and did not offer makerspace in San Francisco at the time TheShop.build opened. See Dkt. No. 254 at 19. However, Plaintiff offered testimony that it had received other offers from parties interested in purchasing the service marks and the company’s other assets for use with makerspace services. See, e.g. , Trial Tr. Vol. 3 at 436:2–19, 438:3–7. The Court finds that this factor weighs in favor of Plaintiff.
* * *
The Court concludes that the jury’s verdict was supported by substantial evidence, which was adequate to support its findings, and thus DENIES the renewed motion for judgment as a matter of law. III. EQUITABLE DEFENSES Notwithstanding the jury verdict, Defendants request that the Court vacate the final judgment in favor of Defendants based on the equitable doctrines of acquiescence, estoppel, and laches. Dkt. No. 256. Defendants’ arguments mirror those raised in the renewed motion for judgment as a matter of law, including that Plaintiff consented to the use of the names TechShop 2.0 and TheShop.build, and Defendants thus reasonably relied on this acquiescence. The Court remains unpersuaded.
Although Plaintiff knew Mr. Rasure created a legal entity called TechShop 2.0, and in correspondence during their negotiations referred to the company as such, the most reasonable interpretation of these interactions is that Plaintiff used this name during negotiations with the understanding that Defendants would acquire the TechShop service marks as part of the parties’ final deal before operating as a makerspace. A letter from Mr. Rasure made this distinction clear when he wrote “[o]ur new legal entity name is TechShop 2.0 LLC, but we will continue to operate the shops at TechShop.” Tr. Ex. 615 at DR007050; see also Tr. Ex. 501 (referring to TechShop 2.0 as “[t]he next iteration of TechShop”); Tr. Ex. 614 (referring to TechShop 2.0 as “[t]he new TechShop”). It borders on nonsensical to imagine that Plaintiff would take such care in the negotiation process if it did not care whether Defendants used Plaintiff’s marks outside of a deal between the parties.
On February 7, Plaintiff rejected Defendants’ last proposal and said it intended to pursue bankruptcy instead. See Tr. Ex. 647. Thus, at the time Mr. Rasure announced the opening of TechShop 2.0, there was no deal between the parties, and thus no consent to use Plaintiff’s service marks. Tr. Ex. 78. Plaintiff moved swiftly after becoming aware that Defendants still intended to open makerspaces using its marks. It sent two letters to Mr. Rasure explaining that he did not have the right to use the TechShop service marks: the first on February 14, 2018, and the next on February 16, 2018. Tr. Exs. 334, 335, 656. The second letter included the complaint in this action, which Plaintiff had filed that same day. The Court does not find this period of delay, if any, unreasonable. To the extent Defendants also suggest that there was delay in raising claims about TheShop.build, the complaint alleged that Defendants’ “unauthorized use of the TECHSHOP® trademarks, and confusingly similar variations thereof , in commerce to advertise, promote, market, and sell makerspace services throughout the United States, constitutes trademark infringement.” Dkt. 1 at ¶ 31 (emphasis added); see also Dkt. No. 45 at ¶ 35. To the extent Defendants did not believe TechShop 2.0 or TheShop.build infringed Plaintiff’s service marks and continued to use them, they did so at their own hazard. The Court finds that there is no basis to find acquiescence, equitable estoppel, or laches under the circumstances of this case. The Court accordingly DENIES Defendants’ request to vacate or modify the final judgment.
IV. MOTION FOR PERMANENT INJUNCTION
Plaintiff, in turn, seeks a permanent injunction to prevent Defendants from continuing to use the infringing TechShop 2.0 and TheShop.build names, or other similarly confusing variants. Dkt. No. 240. Under the Lanham Act, the Court has the “power to grant injunctions according to the rules of equity and upon such terms as the court may deem reasonable, to prevent violation” of Plaintiff's rights. 15 U.S.C. § 1116(a).
//
A. Legal Standard
For a permanent injunction to issue, Plaintiff must establish that (1) it has suffered an
irreparable injury; (2) monetary damages are inadequate; (3) the balance of hardships merits an
equitable remedy; and (4) the public interest will not be disserved by a permanent injunction.
eBay Inc. v. MercExchange, L.L.C.
,
B. Discussion
The Court finds in its discretion that a permanent injunction is not warranted. “[A]ctual
irreparable harm must be demonstrated to obtain a permanent injunction in a trademark
infringement action.”
Herb Reed Enterprises, LLC v. Florida Entm’t Mgmt., Inc.
,
In contrast, Defendants have provided evidence that they no longer operate makerspaces at all, let alone under TechShop 2.0 or TheShop.build names. Defendants closed the San Francisco location entirely in March 2019; changed their name to “Bay Area Makerspace” in June 2019; and closed the only other location in San Jose on August 18, 2019. Dkt. No. 262-1 at ¶ 5; see also Trial Tr. Vol. 4 at 663:16–664:3. In response, Plaintiff has not provided any evidence that Defendants continue to operate, or even that their prior conduct continues to harm its business or goodwill. Plaintiff bears the burden of establishing that a permanent injunction is warranted in this case, and its conclusory arguments are simply insufficient. The Court accordingly DENIES the motion for a permanent injunction. V. MOTION FOR NEW TRIAL Plaintiff also contends that a new trial is required as to damages because the jury did not award any damages for Defendants’ infringement. Dkt. No. 238. Plaintiff argues that there were substantial errors in the admission of evidence and that the jury’s verdict was against the weight of evidence.
A. Legal Standard
A court “may, on motion, grant a new trial on all or some of the issues,” Fed. R. Civ. P.
59(a), “if the verdict is contrary to the clear weight of the evidence, is based upon false or
perjurious evidence, or to prevent a miscarriage of justice,”
Molski v. M.J. Cable, Inc.
, 481 F.3d
724, 729 (9th Cir. 2007) (quotations omitted). Courts should not grant a new trial unless they are
“left with the definite and firm conviction that a mistake has been committed.”
Landes Constr.
Co. v. Royal Bank of Can.
,
B. Discussion
Plaintiff first argues that Defendants’ damages expert, Mark Bünger, should not have been
allowed to testify at trial because his expert report did not establish that he had any specialized
training in trademark licensing or damages analysis, or the experience to testify competently as to
these topics.
See
Dkt. No. 238 at 3–4. Plaintiff raised these same arguments in its pretrial motion
to preclude Mr. Bünger’s testimony. Dkt. No. 126. The Court rejected them. Dkt. No.
158 at 5. When Plaintiff again challenged Mr. Bünger’s testimony at trial,
see
Dkt. Nos. 205, 206,
the Court again rejected Plaintiff’s arguments,
see
Trial Tr. Vol. 6 at 9328:15–944:22.
As an initial matter, “[a] district court is vested with broad discretion to make . . .
evidentiary rulings conducive to the conduct of a fair and orderly trial.”
S.M. v. J.K.
, 262 F.3d
914, 919 (9th Cir. 2001),
as amended
,
Plaintiff next argues that the Court erroneously allowed Defendants to introduce financial evidence of their own expenses during trial. Plaintiff’s argument appears twofold: this information was produced after the close of discovery; and the documents had been allegedly “altered by Defendants to remove . . . information that Defendants simply wanted to hide.” See Dkt. No. 238 at 4. As the Court detailed at trial, Plaintiff’s own expert relied on these financial documents in its case-in-chief to calculate Defendants’ alleged revenues. Trial Tr. Vol. 5 at 719:15–720:6. Plaintiff has yet again failed to persuade the Court that these same documents could not be admitted for purposes of establishing Defendants’ expenses. Relatedly, the Court determined at trial that the documents were redacted to withhold customer names, which were irrelevant to the substance of the financial information or the reliability of the documents. at 720:7–721:9. Plaintiff offers no basis for the Court to find to the contrary.
Lastly, Plaintiff argues that it was “non-sensical,” a “mistake,” and against the weight of
the evidence not to award damages in this case after the jury found that Defendants infringed the
service marks. Dkt. No. 238 at 2, 4–5. To the extent that imbedded in Plaintiff’s argument is
a challenge to the consistency of the jury’s verdict, it waived this argument.
See Williams v. Gaye
,
* * *
The Court concludes that the verdict was not contrary to the clear weight of the evidence and that the jury’s reasonable verdict should not be disturbed, and thus DENIES the motion for a new trial.
VI. MOTION FOR ATTORNEYS’ FEES
Lastly, both Plaintiff and Defendants claim to be the prevailing party in this action, and argue that this is an exceptional case warranting attorneys’ fees. Dkt. Nos. 227, 257.
A. Legal Standard
“Under the Lanham Act, an award of attorney’s fees is within the district court’s
discretion . . . [and] should be reviewed for an abuse of discretion.”
Stephen W. Boney, Inc. v.
Boney Servs., Inc.
,
//
//
B. Discussion
As a preliminary matter, the Court finds that Plaintiff was the prevailing party in this
action. “A party is a prevailing party for purposes of an attorneys’ fee award if it achieved a
material alteration in the legal relationship of the parties that is judicially sanctioned.”
Fifty-Six
Hope Rd. Music, Ltd. v. A.V.E.L.A., Inc.
,
In arguing otherwise, Defendants rely almost exclusively on a non-binding district court case, Milton H. Greene Archives, Inc. v. Julien’s Auction House, LLC , No.
CV057686AHMFMOX,
Not so here. The jury found that Plaintiff owns valid service marks, and that Defendants
not only used the names TechShop 2.0 and TheShop.build in a manner likely to cause confusion
among consumers, but that Defendants’ use was intentional or willful. Dkt. No. 217.
Moreover, as to Defendants’ only counterclaim, the jury found that Plaintiff did not make a false
promise to Mr. Rasure. at 2–4. Although Defendants did not have to pay any monetary
damages to Plaintiff, the jury found for Plaintiff in every other aspect of this case. The Court is
not persuaded that succeeding on the validity, ownership, and infringement of the marks is “purely
technical or de minimis.”
See Milton H. Greene
,
Nevertheless, in evaluating the totality of the circumstances, the Court does not find this to be an exceptional case warranting attorneys’ fees. Plaintiff urges that Defendants’ litigation positions were “exceptionally weak” and that they litigated this case unreasonably. Dkt. No. 227 at 5–8. The Court is not persuaded. Although the jury found that Defendants infringed the service marks, it also decided not to award any damages. This relative success belies Plaintiff’s suggestion that Defendants’ position was “exceptionally weak.” And the Court is well aware that the parties had several disputes related to discovery and trial, but the responsibility for the parties’ difficult working relationship is borne by both sides, and does not render the case exceptional. The Court further finds that an award of attorneys’ fees is particularly unwarranted here where the jury awarded $0 in damages and Plaintiff made no substantive showing in its motion for VII. CONCLUSION a permanent injunction that it had even suffered irreparable harm warranting a permanent Court does not find anything exceptional in this perfunctory approach to post-trial relief. The injunction. Indeed, Plaintiff’s five-page motion did not contain a single citation to the record. The Court DENIES both motions for attorneys’ fees. [3] Accordingly, the Court DENIES the motions in their entirety. IT IS SO ORDERED.
Dated: 3/9/2020
______________________________________ HAYWOOD S. GILLIAM, JR. United States District Judge
Notes
[1] Unless otherwise specified, the Court refers to the exhibits admitted during trial (“Tr. Ex.”).
[2] To prevail on a trademark infringement claim under § 43(a) of the Lanham Act, a plaintiff must
establish that it (1) has a valid, protectable trademark that (2) defendant is using in a confusingly
similar manner.
See Brookfield Commc’ns, Inc. v. W. Coast Entm’t Corp.
,
[3] To the extent Defendants similarly argue that they are the prevailing party and the Court should decline to tax costs against them, see Dkt. No. 258, the Court continues to find that they are not the prevailing party and DENIES the motion for review of costs taxed against Defendants.