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Fee Request Called ‘Sinister’ in Trademark Litigation

May 1, 2020 | Posted in : Expenses / Costs, Fee Entitlement, Fee Request, Hourly Rates / Hourly Billing

A recent Law 360 story by Brian Dowling, “New Era’s Defeated TM Challenger Calls Fee Demand ‘Sinister’,” reports that New Era Cap Co. is making a "bizarrely sinister" request for $164,660 in attorney fees after it defeated a trademark suit filed by an apparel entrepreneur with less than $2,000 in sales to her name, an attorney for the business owner said.  An attorney for Averil Hilton's startup God's Era — which unsuccessfully sued New Era over its "Fear of God" line of hats — urged U.S. District Judge Indira Talwani to deny the fee request, calling it an "intimidation tactic" that takes "trademark bullying to a new level."

New Era, with sales stretching into the hundreds of millions of dollars, is likely to have a tough time collecting on such an award from Hilton, who founded the company when she was a college student in 2015, attorney R. Terry Parker said.  "New Era knows that my client does not have the revenue to pay $164,660 in legal fees, in light of which this motion for attorneys' fees is a bizarrely sinister play to make," Parker told Law360, adding that God's Era booked about $600 in sales in 2017 and about $1,300 in 2018.

Judge Talwani ruled in favor of New Era on April 1 in the trademark suit launched against the multinational apparel firm by Hilton, who largely made hand-to-hand sales of T-shirts, sweatshirts, hoodies and lounge pants.  The court said New Era's use of "Fear of God" on products at the 2017 Major League Baseball All-Star Game in Miami didn't violate God's Era's trademark, which only extended to the Boston area where Hilton was making sales.

God's Era has said it plans to appeal the decision to the Federal Circuit.  In its bid for fees, New Era said the fact that it never used the "Fear of God" mark in Boston should have been evident if Hilton and her attorneys had done an adequate investigation before filing suit.  The lack of such research and God's Era's relatively small-dollar sales make the lawsuit frivolous and ripe for the award of attorney fees, the company argued.  "Simply put, plaintiff had the weakest imaginable legal and factual positions in the context of a trademark case," New Era wrote in its request.

The hat company also contended that God's Era lacked a good-faith motivation for filing the suit, because the startup sparked the litigation only in response to an opposition proceeding at the federal Trademark Trial and Appeal Board.  "That is obviously not a proper motivation to commence a baseless federal court lawsuit and further supports New Era's application for attorneys' fees," New Era said.  God's Era, however, has said it filed the suit in good faith to protect its brand.

In a declaration for attorney fees, New Era attorney Michael J. Berchou of Harter Secrest & Emery LLP said his rate ranged from $380 an hour to $400 an hour while working on the case. Other attorneys at the firm on the case billed from $275 to $370 an hour, he said.  While Harter Secrest billed the majority of hours defending New Era, James Radke of Murtha Cullina LLP charged $390 to $395 per hour, and his firm should be paid $4,770, according to the declaration.  New Era also wants God's Era to pay $3,080 for travel, deposition and transcript costs, as well as other fees, according to the declaration.

In a statement, New Era said God's Era's plan to appeal the ruling furthers "the frivolity" of the company's claim.  "New Era respects the intellectual property rights of others but has an obligation to defend and protect its valuable trademarks," New Era said, adding that it "seeks attorneys' fees because it has been forced to defend a baseless case."