Repeat failures to show infringement lead to fee award

Miller's Ale House, Inc. v. Boynton Carolina Ale House, LLC, 2011 WL 855276 (S.D. Fla.)

Boynton won summary judgment against Miller’s copyright and trademark infringement claims. The trademark claims were barred by issue preclusion; Ale House is just as generic as it was the first time this was litigated. Miller’s trade dress was not inherently distinctive, nor did it show secondary meaning; its false advertising claims failed; and, as a matter of law, it couldn’t show substantial similarity in the parties’ internal layout.

Boynton sought attorneys’ fees, which are available in exceptional trademark cases, which are malicious, fraudulent, deliberate and willful. In copyright cases, fees may be awarded to the prevailing party based on a variety of factors, including frivolousness, motivation, objective unreasonableness, and compensation/deterrence concerns.

Boynton argued that Miller’s had pursued meritless commercial litigation against various licensees of LM Restaurants, Inc. (LMR), Boynton’s licensor/franchisor, identifying four separate lawsuits. It further argued that Miller’s knew that “ale house” was generic when it sued, that the trade dress claim was unsupported by the evidence, and that Miller’s continued the case after it knew it couldn’t succeed. Miller’s responded that it did not act in bad faith or fraudulently.

The court awarded fees to Boynton. The heart of the case was the dispute over “ale house,” but Miller’s was well aware that the term was generic, as determined by the Fourth Circuit, and there was “compelling evidence” that Miller’s used litigation as a “competitive ploy.” When LMR applied to register its Carolina Ale House Food Sports Fun stylized logo, for example, Miller’s opposed on genericness grounds, contrary to the position it took in the present case. Miller’s sued LMR licensees for offering a “chicken zinger” appetizer, and also sued Boynton in Florida state court on the “ale house” claim. In the previous Fourth Circuit case, the court affirmed an award of attorneys’ fees against Miller’s predecessor in interest. The present case simply sought to relitigate many prior disputes, and thus the court concluded that it was brought in order to harass Miller’s competitors.

Moreover, the summary judgment and preliminary injunction orders highlighted the weakness of the entire case, including the trade dress claim. That and the false advertising claims were mere add-ons to the main trademark claim and Miller’s failed to provide any evidence to raise a genuine issue of material fact on them. Such groundless claims supported a fee award.

The above discussion was also relevant to the copyright claims, though under the Copyright Act the touchstone is whether awarding fees will further the interests of that act—in encouraging people to bring/raise objectively reasonable claims/defenses. “Given the significant differences between the two floor plans at issue in the restaurants,” the court found that Miller’s motivation was anticompetitive/work-suppressive, not based in reasonable copyright concerns. Thus, a fee award served the goal of the Copyright Act.