In a pair of unpublished opinions issued last month, the Fourth U. S. Circuit Court of Appeals in Richmond affirmed District Court judgments and emphatically reminded trademark plaintiffs that there can be a high price to pay if you get it wrong – losing on counterclaim for trademark infringement of defendant’s mark, damages, and an order to pay defendant’s attorney’s fees.
Losing your trademark infringement case and having to pay your own attorney’s fees is not an ideal outcome. Worse still is being ordered to pay the multimillion dollar bill of the opposing party’s attorneys.
That is exactly what happened in Super Duper, Incorporated v. Mattel, Incorporated, decided June 10. Super Duper filed applications with the United States Patent and Trademark Office to register several trademarks. Mattel, Incorporated opposed registration. The parties were unable to reach a settlement. Apparently preferring a federal court forum to the Trademark Trial and Appeal Board, Super Duper filed a declaratory judgment action in the United States District Court for South Carolina requesting the court to rule that its trademarks did not infringe those of Mattel. Mattel counterclaimed for trademark infringement, dilution, unfair competition and fraud.
It did not go well for Super Duper. After a weeklong trial, the jury returned a verdict of trademark infringement for Mattel in the amount of $400,000. That’s not the outcome Super Duper envisioned. I’m guessing neither was this. The court increased the damage award to just under $1 million and awarded Mattel over $2.6 million in attorneys fees.
Same thing in Employers Council v. Feltman, an infringement and cybersquatting case decided June 21. The court found the facts sufficiently egregious to justify an award of attorney’s fees.
The lesson: Get an adequate analysis of the trademark law issues before you use a mark. It’s a lot cheaper than trying to dig yourself out of a hole later on.