In Slep-Tone Entertainment Corp. v. Karaoke Kandy Store, et al., No. 14-3117 (6th Cir. April 6, 2015), the Sixth Circuit confirmed that post-trial motions toll the deadline for filing motions for attorneys’ fees under Rule 54. Moreover, the Court held that the Supreme Court’s interpretation of the phrase “exceptional case,” as that phrase is used in the fees provision of the Patent Act, is equally applicable to an identical fees provision in the Lanham Act. In Slep-Tone, Slep-Tone Entertainment sued Karaoke Kandy Store, Inc. and Charles M. Polidori in the United States District Court for the Northern District of Ohio, asserting Defendants were liable for trademark infringement after “copying karaoke tracks containing Slep-Tone’s registered marks onto computer hard drives and then selling those tracks without authorization.” After a bench trial, the district court entered judgment for Defendants.
Plaintiff then filed a Rule 52 motion for an entry of finding of facts and conclusions of law. Twenty-one days after the district court entered judgment for the Defendants, and while Plaintiff’s Rule 52 motion was pending, the Defendants filed a motion for attorneys’ fees pursuant to 15 U.S.C. § 1117(a), which allows a court to award reasonable attorney fees “in exceptional cases.” The district court denied Defendants’ fees motion as untimely. According to the district court, Rule 54 requires that motions for attorneys’ fees be filed within 14 days after entry of final judgment, and that the window for Defendants to file their fees motion began with entry of judgment in Defendants’ favor. Because 21 days had passed since that entry of judgment, Defendants’ fees motion was untimely. Additionally, the district court denied Defendants’ fees motion on the alternative ground that the litigation was not an “exceptional case” as required by 15 U.S.C. § 1117(a
On appeal, the Sixth Circuit held that the district court erred in rejecting Defendants’ fees motion as untimely. The Sixth Circuit noted that under Rule 54, parties have 14 days after entry of final judgment to file a fees motion, and that post-trial motions toll the entry of final judgment. Because Plaintiff’s Rule 52 post-trial motion was still pending at the time Defendants filed their fees motion, no final judgment had been entered. Thus, the Rule 54 window had not yet even begun, much less passed.
Additionally, the Sixth Circuit reversed and remanded the district court’s holding that the litigation was not an “exceptional case.” The Sixth Circuit observed that resolution of Plaintiff’s Rule 52 motion would likely directly impact a determination as to whether the litigation was exceptional. Moreover, the Sixth Circuit held that the district court was required to consider the effect of the Supreme Court’s holding in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 572 U.S. __, 188 L. Ed. 2d 816 (2014). In Octane Fitness, the Court held that an “exceptional case,” as that term is used in §285 of the Patent Act, “requires considering the totality of the circumstances” and that “‘objective reasonableness’ based on ‘the factual and legal components of the case’” should be considered in this analysis. The Sixth Circuit held that the Supreme Court’s reasoning in Octane Fitness is equally applicable to claims under the Lanham Act, as the fee-shifting provisions in the Patent Act and Lanham Act are identical.
Slep-Tone should serve as a reminder to attorneys that although filing post-trial motions may be in the client’s best interests, such motions may provide the opposing party additional time to evaluate and prepare its own post-trial motions, such as requests for attorneys’ fees. Moreover, parties moving for fees in Lanham Act litigations should be prepared to address the analysis for “exceptional” cases set forth in the Supreme Court’s Octane Fitness opinion.