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Erich Specht, et al v. Google

July 27, 2011

ERICH SPECHT, ET AL., PLAINTIFFS,
v.
GOOGLE, INC., DEFENDANT.



The opinion of the court was delivered by: Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

Before the Court is (1) the Motion for Attorneys' Fees and Sanctions from Defendant Google Inc. (hereinafter, "Google"), (2) a Motion to Strike Google's Sanctions Motion from Plaintiffs Erich Specht, Android Data Corporation, and The Android's Dungeon, Inc. (hereinafter, the "Plaintiffs"), and (3) Plaintiffs' and attorney Martin Murphy's Motion to Strike Google's Sanctions Motion. For the reasons stated herein, all three Motions are denied.

I. INTRODUCTION

The Court previously detailed the facts of this case in its Summary Judgment Memorandum Opinion and Order, so these need not be repeated here. In short, this case involved Plaintiffs' claim that Google's unregistered ANDROID mark infringed its registered ANDROID DATA mark. On December 17, 2010, the Court ruled that Plaintiffs had abandoned their ANDROID DATA mark, and granted summary judgment in favor of Google on all counts of Plaintiffs' Second Amended Complaint, and Counts I and III of Google's Counterclaim. After the Court denied Plaintiffs' Motion for Reconsideration, Google dismissed without prejudice the remaining counts of its Counterclaim. The Court filed judgment on February 24, 2011, but entered judgment more than two weeks later on March 11, 2011.

On March 22, Google filed its attorneys' fees and sanctions motion. Google moves for attorneys' fees pursuant to 15 U.S.C. § 1117(a), which allows the prevailing party in an "exceptional" trademark case to receive these fees. It also moves for 28 U.S.C. § 1927 sanctions against Plaintiffs' attorneys Martin Murphy ("Murphy") and P. Andrew Fleming ("Fleming"). Plaintiffs first filed two motions to strike Google's motion - one addressing the Lanham Act claim, and the other, which is joined by Murphy, addressing the § 1927 claim. Plaintiffs and Murphy have also filed substantive responses to Google's motion. Fleming and his law firm, Novack and Macey, have also responded to the § 1927 segment of Google's motion.

II. ANALYSIS

A. Plaintiffs' and Martin Murphy's Motions to Strike

1. 15 U.S.C. § 1117(a) Attorneys' Fees

Plaintiffs filed two motions to strike on the same day. One motion addresses the Lanham Act attorneys' fees set forth in § 1117(a) that Google seeks. Here, Plaintiffs first argue that Federal Rule of Civil Procedure 59(e), not Rule 54(d)(2), governs § 1117(a). According to Plaintiffs' rationale, Google's motion for fees is actually a motion to amend or alter this Court's judgment, and as such Google must "demonstrate a manifest error of law or present newly discovered evidence" for the court to amend its judgment. Heyde v. Pittenger, 633 F.3d 512, 521 (7th Cir. 2011). Plaintiffs base this argument on the Seventh Circuit's decision in Hairline Creations, Inc. v. Kefalas, 664 F.2d 652 (7th Cir. 1981), which held that the Lanham Act's attorneys' fees provision is tied to the judgment, and therefore governed by Rule 59(e). Id. at 660. After Hairline Creations, however, the Supreme Court decided White v. New Hampshire Department of Employment Security, 455 U.S. 445 (1982). In addressing a post judgment attorneys' fees request under the Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988, the Court held that "federal courts generally have invoked Rule 59(e) only to support reconsideration of matters properly encompassed in a decision on the merits." Id. at 451 (internal citation omitted). The Court found that a § 1988 attorneys' fees request presented "legal issues collateral to the main cause of action." Id.

Since White, the Seventh Circuit has walked a tightrope when confronted with the viability of Hairline Creations. Its analysis in Bittner v. Sadoff & Rudoy Industries, 728 F.2d 820, 827--28 (7th Cir. 1984), illustrates this feat of finding narrow grounds to differentiate Lanham Act attorneys' fees with other statutory attorneys' fees provisions:

Hairline Creations is an outlier. Most cases, under most attorney-fee statutes, follow the Rule 54(d) route. . . . There is a practical reason for this: Especially in substantial litigation, where large fees may reasonably be requested, it is unrealistic to expect the prevailing party's lawyer to be able to get a carefully formulated fee request in within the Rule 59(e) deadline of ten days - a deadline that cannot be extended. The Rule 59(e) route would trap the unwary in some cases and in others cause half-baked fee requests to be submitted that would have to be amended later. If Hairline Creations . . . is still good law (a question we need not decide here), it is so only because to allow attorney's fees to be awarded in "exceptional" cases may be thought to imply that such fees are a sanction in the nature of punitive damages; and of course a plaintiff disappointed with a judgment that did not include an award of punitive damages would have to get the judgment amended if he wanted them added. The analogy is imperfect, because 15 U.S.C. § 1117 allows a prevailing defendant as well as a prevailing plaintiff to obtain an award of attorney's fees "in exceptional cases" and a defendant could never get an award of punitive damages.

Id. at 827--28; see also Exch. Nat. Bank of Chicago v. Daniels, 763 F.2d 286, 294 (7th Cir. 1985)("It is enough to say that Hairline states a peculiarity of patent and trademark litigation. We may re-examine Hairline if the occasion arises.").

Hairline Creations has not been reexamined since 1985, so Plaintiffs are correct in that the Seventh Circuit has not expressly overruled its holding that Rule 59(e) applies to § 1117(a). Rather, the court has disregarded this issue since 1985 when addressing Lanham Act attorneys' fees. The fees motions in many of these cases have emerged through procedures that comply with Rule 54(d)(2), not Rule 59(e). By not barring these motions on procedural grounds, the Seventh Circuit, by implication, no longer appears to consider Hairline Creations good law.

For example, the Seventh Circuit affirmed the award of § 1117(a) attorneys' fees in S Industries, Inc. v. Centra 2000, Inc., 249 F.3d 625, 629 (7th Cir. 2001). In this case, Judge George W. Lindberg entered judgment on March 31, 1998, after granting summary judgment in favor of the defendant. S Indus., N.D. Ill. No. 96-C-3524, ECF No. 44. The defendant filed its motion for attorneys' fees on April 13, 1998, which was after the 10 days allowed at the time by Rule 59(e) to file such a motion. Id. at ECF No. 46. The defendant had filed the motion in compliance with Rule 54(d)(2). Nevertheless, despite the existence of Hairline ...


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