July 08, 2010
Griper Gets Attorneys' Fees After Successful Defense--Career Agents v. Careeragentsnetwork.biz
By Eric Goldman
Career Agents Network, Inc. v. Careeragentsnetwork.biz, 2010 WL 2632298 (E.D. Mich. June 29, 2010). The CMLP page.
The underlying dispute involves a non-commercial gripe site. The trademark owner sells a type of "business in a box" (like a franchise). The defendant was an unhappy buyer of the "business in a box." The defendant set up a gripe site, warned potential buyers that they weren't likely to recoup their investment, and then SEOed the gripe site. In late February, the court dismissed trademark infringement and ACPA claims on summary judgment. Career Agents Network v. careeragentsnetwork.biz, 2:09-cv-12269-RHC-MJH (E.D. Mich. Feb. 26, 2010). I didn't blog the February decision because it seemed rather straightforward, but other people covered the decision (Wendy Davis, Tom O'Toole, Ars Technica).
Having dispatched the underlying lawsuit, the defendant moved for attorneys' fees under the Lanham Act fee-shifting provision. The court says that the plaintiff's ACPA claim became objectively unreasonable when plaintiff realized that the griper was a disgruntled customer (i.e., bummed-out business buyer) rather than a competitor or cybersquatter (cite to the Sixth Circuit's 2004 Lucas Nursery case, binding law on this court). The trademark claim was "weak but colorable" because the domain name didn't include the "sucks" suffix. (In this era, try to find me a trademark case that isn't colorable at some level). In terms of the plaintiff's subjective intent, "the court finds that Plaintiff's principal motivation was to silence Defendant White's criticism of Plaintiff's business." The court also praises the defendant's persistence given his counsel's settlement advice and an initial TRO loss.
In theory, the court could have just awarded the ACPA fees and excluded the trademark fees, but the court says the entire lawsuit "stood on thin ice" and therefore gives the whole enchilada to defendant. The court does take a haircut on the fees associated with seeking the fee award--too high an hourly fee for too many hours for a fee request motion the court unfairly characterizes as "only as difficult as shooting fish in a barrel." Nevertheless, the defendant got a lot of what it asked for--a total fee award of $23k. All told, this is another case where a plaintiff picked a fight only to end up writing a check to the defendant. Another poor enforcement decision by a plaintiff.
UPDATE: Paul Levy provides a behind-the-scenes look at this ruling.
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