Eagles, Ltd. v. American Eagle Foundation

Citation: Eagles, Ltd. v. American Eagle Foundation, Civ. A. No. 98-00090 (E.D. Tenn. 2001), aff’d, 356 F.3d 724, 69 U.S.P.Q.2d (BNA) 1681 (6th Cir. 2004) (full-text).

Factual Background
Plaintiff owned the registered trademark EAGLES for the famous band the Eagles. Defendant, a non-profit organization dedicated to protecting American bald eagles, owned and used the domain name “eagles.org” to promote its efforts. Defendant filed a federal trademark application for the mark AMERICAN EAGLES RECORDS in 1995, which plaintiff opposed.

Before the PTO could rule on the opposition, plaintiff sued defendant for infringement, dilution, and other Lanham Act claims. The PTO suspended the opposition until final disposition of plaintiff’s suit. Two weeks before trial, plaintiff changed counsel and requested a continuance due to unavailability of witnesses. The court approved the substitution of counsel but refused to continue the trial. Plaintiff then moved for voluntary dismissal of its action without prejudice, but the court dismissed the case with prejudice. Defendant moved for attorney’s fees and costs and for an order directing the PTO to dismiss the opposition with prejudice.

The district court denied defendant’s motion for attorney’s fees, finding that plaintiff’s litigation strategies did not qualify the case as “exceptional” under the Lanham Act. The district court also denied defendant’s request to order the PTO to dismiss plaintiff’s opposition. It rejected defendant’s argument that plaintiff should be estopped from pursuing the opposition based on the district court’s dismissal of the litigation with prejudice, holding that “the issue of estoppel is before the Trademark tribunal not this court.”

Appellate Court Proceedings
On appeal, the Sixth Circuit affirmed the district court’s decision in its entirety. Regarding attorney’s fees, the court of appeals held that the district court did not abuse its discretion in refusing to award attorney’s fees. The district court sufficiently stated the applicable law and applied it correctly and in its discretion found the case not to be “exceptional.”

In particular, the Sixth Circuit rejected defendant’s argument that a bias existed in favor of prevailing plaintiffs in trademark cases, which violates the party-neutral approach of the Supreme Court’s decision in Fogarty v. Fantasy, Inc. The appeals court noted that the standard of “oppressiveness” required for defendants to be awarded attorney’s fees is similar to a prevailing plaintiff’s burden of proving that infringement is “malicious, fraudulent, willful, or deliberate.” According to the Sixth Circuit, “[b]oth allow an award of fees where the opposing party abused the protections afforded by the Lanham Act.”

The Sixth Circuit also found that the district court did not abuse its discretion by refusing to order the PTO to dismiss plaintiff’s opposition. First, the opposition involved the mark AMERICAN EAGLES RECORDS, which was not at issue in the lawsuit. Second, this issue was not properly before the district court because defendant raised the issue for the first time in its motion for reconsideration of the court’s dismissal order; defendant did not raise this argument as a counterclaim in the lawsuit. Third, the district court’s decision was reasonable because it never reached the underlying merits of the case.

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