Judge Gardephe Denies Attorneys' Fees Award

In a July 11, 2013 ruling, Judge Paul G. Gardephe denied the defendant The Bon-Ton Stores, Inc.'s motion for attorneys' fees after its successful motion to dismiss plaintiff Klauber Brothers, Inc.'s breach of contract, and copyright and trademark infringement claims. For the breach of contract claim, Judge Gardephe ruled that an attorneys' fee award is available under the Court's inherent powers where a party has "'acted in bad faith, vexatiously, wantonly, or for oppressive reasons.'"  Finding that Klauber's conduct did not meet that standard, the Court declined to award fees on the breach of contract claim.  Judge Gardephe denied the fee claim under the Copyright Act, holding that "[w]here, as here, a copyright claim is not frivolous or objectively unreasonable, the goals of 'compensation and deterrence' . . . are not furthered in granting an award of attorneys' fees."  Lastly, regarding the trademark infringement claim, the Court noted that attorneys' fees are only available in an exceptional case, and held that while Klauber's theory of standing to assert a trademark infringement claim "was incorrect, there is no evidence that Klauber's Lanham Act claim was brought in bad faith, or as a 'competitive ploy.'"  Judge Gardephe accordingly denied the motion for fees in its entirety.

Copyright Reasonable Royalty Damages Not Available for Breach of Contract Claim

In a June 17, 2013 ruling, Judge Katherine B. Forrest dismissed plaintiff Jill Stuart (Asia) LLC’s remaining breach of contract claim against Sanei International Co., Ltd., finding that the plaintiff had not suffered any damages as a matter of law. The plaintiff had originally asserted claims for trademark infringement and dilution, unfair competition, copyright infringement and breach of contract. Judge Forrest dismissed all the claims except the breach of contract claim. The plaintiff then asserted that it had suffered two types of damages on the breach of contract claim, damages to its brand from the defendant’s use of the plaintiff’s copyrighted pattern, and for a reasonable royalty for the unauthorized use. In response to the defendant’s motion for summary judgment because of no compensable damages, Judge Forrest dismissed the claim. The Court ruled that the plaintiff had failed to raise a triable fact that it had been harmed because of the defendant’s unauthorized use. Judge Forrest also rejected the reasonable royalty claim, holding that the plaintiffs “point to no legal authority for their theory of ‘contractual copyright infringement’; rather, plaintiffs appear to attempt an end run around the Court’s . . . Order dismissing their copyright claims.”