RECOUPING ATTORNEYS’ FEES IN

COPYRIGHT AND TRADEMARK CASES -

”YES VIRGINIA, THERE IS A SANTA CLAUS” August 2007

Arnold Sklar is a partner
in the Los Angeles Office.
He can be reached at
asklar@rmkb.com
Trademark law and copyright law both
provide that a prevailing party may be
awarded its attorneys’ fees under certain
circumstances. The Supreme Court has
directed that the same standards are
to apply to plaintiffs and defendants.
A winning defendant may recover its
attorneys’ fees (our firm has obtained
fee awards on behalf of prevailing
defendants in a number of cases).
Recovering attorneys’ fees is not the
norm, but trademark and copyright
plaintiffs almost always emphasize the
potential recovery of attorneys’ fees in
settlement negotiations. Defendants
rarely do so, even when defending
weak infringement claims; but they
should. When negotiating settlements,
defendants will find it advantageous to
use the potential recovery of attorneys’
fees as leverage since a prevailing
defendant is equally entitled to recovery
of fees.
fees. That is not necessarily limited to the
amount that was billed. The hourly rate
to apply is a challenging issue.
Insurance companies usually negotiate
an hourly rate of attorneys’ fees that is
considerably below the rates charged
by attorneys of comparable experience
in trademark and copyright matters (the
“market rate”). A losing plaintiff subject
to an award of attorneys’ fees will take
the position that the amount billed by
defendant’s attorneys is the reasonable
fee. However, courts have consistently
held that the hourly rate to be applied
to calculate the reasonable attorneys’
fee is the rate generally charged by
attorneys of comparable experience
in the legal community where the suit
is pending.
Several organizations, most notably
the AIPLA, publish annual or bi-
annual surveys of rates charged, by
geographical area, experience, and
other factors. Those surveys provide
a yardstick to which most courts give
great credence.
For example, a carrier may have
negotiated an hourly rate of $225.00
per hour, blended, for defense of a
trademark case, whereas the “market
rate” for trademark and copyright
and $225.00 per hour for the hours by
associates.
When considering an award of attorneys
fees the court itself has an obligation to
review the reasonableness of the work
performed. The requirements of most
carriers that time entries be specific and
“unblocked” actually assists the court in
its review, and reduces the risk that the
court will find the work performed to
have been unnecessary. By the same
token, judges know that a given task in
copyright and trademark cases often
requires the efforts of two or even three
attorneys over several days.
It is quite conceivable-even probable-
that the amount of the award will
exceed the amount billed to the carrier.
In the end, the attorneys’ fees recouped
would probably not exceed the total
amount paid to defense counsel— the
“extra” amount awarded will likely be
spent to collect the Award. The overly
aggressive plaintiff who is faced with
an order to pay attorneys’ fees should
be expected to continue its aggressive
ways, and resist payment with such
strategies as a threat of appeal and
endless attempts to negotiate a lesser
fee payment. The post-award fees
incurred in this “collection” process
are rarely recovered — it would

The copyright law provides that the

court may “in its discretion” award
attorneys’ fees. The trademark law
provides a bit more guidance (but only
a bit): the court may award attorneys’
fees in “exceptional” cases. In this
jurisdiction the Ninth Circuit Court of
Appeals has provided some definition
of “exceptional” cases: those that are
groundless, unreasonable, vexatious or
pursued in bad faith.

Whether the court will award attorneys’

fees is dependant on the particular
circumstances of the case. However,
once the court decides to award
attorneys’ fees to a prevailing defendant
whose defense was provided by an
insurance carrier, the question is how
much to award.
Both copyright and trademark laws refer
to an award of “reasonable” attorneys’
attorneys is $350.00 per hour for partners
with 15 years experience, $300.00 per
hour for attorneys with 10-15 years
experience, and $225.00 per hour for
associates with 5-10 years experience.
Courts typically award the prevailing
defendant a fee calculated at $350.00
per hour for the hours worked by the
15 year partner, $300 per hour for the
hours worked by the 10 year partner,
require a supplemental fee motion.
However, if the plaintiff does appeal
(beyond a mere Notice of Appeal),
at least in trademark cases deemed
“exceptional” by the district court
judge and not reversed on appeal,
attorneys’ fees for the appeal are
usually (but not always) awarded to the
prevailing defendant/respondent.