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United States District Court, Northern District of Illinois, Eastern Division

March 31, 2003


The opinion of the court was delivered by: Joan Humphrey Lefkow, District Judge.


In trademark infringement cases, the court may award reasonable attorneys' fees to the prevailing party where the case is exceptional. 15 U.S.C. § 1117(a). After the reversal of this court's judgment in favor of defendant, The World Church of the Creator ("World Church"), plaintiff, TE-TA-MA Truth Foundation — Family of URI, Inc. ("the Foundation"), moved for an award of attorneys' fee against World Church, contending that this is an exceptional case. In factual support of its motion, the Foundation reports conduct by World Church's members including Matthew Hale ("Hale"),*fn1 an alleged (though documented by way of exhibits to the motion) barrage of hateful letters, voice- and e-mails to the Foundation and the Foundation's counsel. As the Foundation demonstrates, more than 70 communications were sent, and they can be readily traced to incitement by Hale, who via e-mail called upon World Church members to "make [the Foundation and its attorneys] consume their time and money dealing with the mass of calls from angry White Racial Loyalists" and to pressure the Foundation to drop the law suit. Some of the communications were indeed ugly, even threatening. Four of the communications the Foundation and its counsel received illustrate: "Listen up you Kike, you better leave our f[***n] church alone or I'm gonna f[***n] kill you." (Mot. Ex. 74); "We will include you in the concentration camps next time around. . . ." (Mot. Ex. 13); "[World Church] has members in your area and [sic] who are on their way to talk to you about the lawsuit." (Mot. Ex. 23); "[Y]ou wander why Hitler took you Jewish scum out back then well i hope you realize this will piss my race off even more because of this there may be a rise in so called `Hate Crimes' i am not saying i am going to but your sure to piss somebody off to the point of violence." (Mot. Ex. 8) (misspellings in original). World Church denies that this case is exceptional because its members' conduct, although admittedly unwelcome, was not harassing but merely free expression guaranteed under the First Amendment.

Where the accused infringer is vindicated on the merits, exceptional cases are typically those where the accuser's case was in bad faith, frivolous or otherwise asserted with a purpose to harass for competitive ends. E.g., Door Sys., Inc. v. Pro-Line Door Sys., Inc., 126 F.3d 1028, 1031-32 (7th Cir. 1997) ("Whether the plaintiff's suit is fairly regarded as oppressive — our gloss of . . . the . . . Lanham Act standards for awarding attorneys' fees to a prevailing defendant is the same kind of "fact" as whether the suit was brought in bad faith."). On the other hand, where the accuser is vindicated on the merits, as is the case here, "[e]xceptional cases that would justify an award of attorney's fees are ones in which the acts of infringement can be characterized as malicious, fraudulent, deliberate, or willful." Otis Clapp & Son, Inc. v. Filmore Vitamin Co., 754 F.2d 738, 746 (7th Cir. 1985). The Seventh Circuit interprets this provision "to require a finding of wilful infringement." Roulo v. Russ Berrie & Co., 886 F.2d 931, 943 (7th Cir. 1989). The Foundation does not rest its motion on evidence that World Church's infringement was willful but, rather, that World Church members' litigation conduct was in bad faith, or merely for harassment.

The Foundation cites the Third Circuit, which has taken a broader view, holding that § 1117(a) "does not preclude using litigating conduct as a basis for the fee." Securacomm Consulting, Inc. v. Securacom, Inc., 224 F.3d 273, 280 (3d Cir. 2000). There, the court awarded fees for the trademark holder where the accused's principal warned the trademark holder that "if he filed suit, [the accused] would bury him financially and take everything he had," id. at 275, and proceeded to file multiple meritless claims and law suits in an effort to make good on the threat. Although the court acknowledged legislative history to the effect that an exceptional case was intended to be one "where the acts of infringement can be characterized as `malicious,' `fraudulent,' `deliberate,' or `willful,' id. at 280, citing S. REP. NO. 93-1400, at 2 (1974), it relied on other language in the Senate Report endorsing fees "when equitable considerations justify such awards." Securacomm Consulting, Inc., 224 F.3d at 281-82 (emphasis in original).

The case before the court is more like Securacomm Consulting than any case cited from the Seventh Circuit. Fortunately, no reported case with analogous facts seems to have been presented within this circuit, and even Securacomm Consulting stands alone as the only bad faith defense litigation conduct cited by a leading expert in the trademark field. J. 5 MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 30:100 (2002). McCarthy comments concerning fees against an infringer, "Usually, the type of conduct that has sufficed to make out an `exceptional case' is intentional, deliberate or willful infringement." "Remedies are intended to make violations of the Act unprofitable, but not to act as a penalty." BASF Corp. v. Old World Trading Co., Inc., 41 F.3d 1081, 1092 (7th Cir. 1994), citing Otis Clapp & Son, Inc., 754 F.2d at 742.

In light of the above authorities, the court concludes that the circumstances of this case do not lend themselves to the fee shifting provisions of the Lanham Act. The Foundation has not demonstrated willful infringement. Neither has the Foundation demonstrated that the conduct at issue is related to the infringement in such a way that the requested relief here is fairly classified as "remedy" as opposed to "punishment." For these reasons, the motion to declare the case exceptional and to award the Foundation its fees will be denied.*fn2

Wherefore, for the reasons set forth above, plaintiff's motion to declare this case exceptional [#88-1] and award plaintiff's attorneys' fees is denied [#88-2].

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