Iconic Mars Corporation v. Kaotica Corporation

District Court, S.D. California·Decided August 25, 2025·No. 3:22-cv-00092·Unknown

Opinion

ICONIC MARS CORP., Case No.: 22-CV-0092-CAB-DEB

Plaintiff, ORDER ON APPLICATION FOR v. ATTORNEYS’ FEES AND COSTS

[Doc. No. 145] Defendant. A. Background On February 5, 2025, the Court entered an order in this case awarding defendant/counterclaimant Kaotica Corporation its attorneys’ fees and costs. [Doc. No. 145.]1 The award was made following a jury trial and post-trial motions on equitable claims. The jury determined plaintiff/counter-defendant Iconic Mars Corporation willfully infringed the trade dress rights of Kaotica. The Court determined that Kaotica had not interfered with Iconic’s sales in violation of the terms of the parties’ previous Stipulated Judgment or unfair competition law. The Court further determined that based on the Stipulated Judgment entered by the parties in Kaotica Corp. v. Iconic Mars Corp., et al., Case No. 21cv433-CAB (“Iconic I”) in which Iconic Mars admitted that its product infringed Kaotica’s valid and enforceable trade dress, Iconic’s position this litigation was initiated and pursued in bad faith. Considering the totality of the circumstances, the Court determined that this case was exceptional.2 See Intel Corp. v. Terabyte Inter., Inc., 6 F.3d 614, 621 (9th Cir. 1993) (generally a trademark case is exceptional for purposes of an award of attorneys’ fees when the infringement is malicious, fraudulent, deliberate or willful). In accordance with the Lanham Act, 15 U.S.C. § 1117(a), the Court awarded reasonable attorneys’ fees and costs to Kaotica against Iconic. [Doc. No. 145.] On June 29, 2025, the Court granted Kaotica’s motion to amend the judgment to add Oluseyi James Olaleye, the sole owner and founder of Iconic, as a judgment debtor personally responsible for the compensatory damages and fees due to Kaotica.3 [Doc. No. 192.] The Court determined pursuant to its inherent powers that an award of sanctions for the reasonable attorneys’ fees and costs incurred by Kaotica may be also recovered against lead counsel for Iconic Stephen Lobbin based on his conduct of this litigation. [Doc. No. 145.] The reasonable amount of that sanction will be addressed infra. Now before the Court is Kaotica’s application setting forth its claim for the reasonable attorneys’ fees and costs it incurred in this litigation. [Doc. No. 175.] The matter has been fully briefed. [Doc. Nos. 196, 207, 224.] Argument was held on August 19, 2025. B. Legal Standard The calculation of a reasonable fee award is a two-step process. First the court must calculate the lodestar figure by taking the number of hours reasonably expended on the litigation and multiplying it by a reasonable hourly rate. Second the court may adjust the lodestar figures based upon the factors listed in Kerr v. Screen Extras Guild, Inc., 526 F.2d

2 The Court’s analysis of the circumstances supporting a discretionary fee award is fully discussed in the February 2025 order and will not be repeated here. 3 The Court’s analysis of the equitable justification for including Mr. Olaleye as a judgment debtor is fully 67, 69-70 (9th Cir. 1975) that have not been subsumed in the lodestar calculation. Intel Corp., 6 F.3d at 621. The Kerr factors include: 1. The time and labor required; 2. The novelty and difficulty of the questions; 3. The skill requisite to perform the legal services properly; 4. The preclusion of other employment due to acceptance of the case; 5. The customary fee; 6. The contingent or fixed nature of the fee; 7. The limitations imposed by the client or the case; 8. The amount involved and the results obtained; 9. The experience, reputation, and ability of the attorneys; 10. The undesirability of the case; 11. The nature of the professional relationship with the client; 12. Awards in similar cases. Id. at 622. The lodestar amount presumably reflects the novelty and complexity of the issues, the special skill and experience of counsel, the quality of representation, and the results obtained from the litigation. Id. The burden is on the applicant to produce satisfactory evidence that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation. Camacho v. Bridgeport Financial, Inc., 523 F.3d 973, 979 (9th Cir. 2008). “The party seeking an award of fees should submit evidence supporting the hours worked” to enable the court to determine and exclude hours that were not reasonably expended and hours that were excessive, redundant or others unnecessary. Hensley v. Eckerhart, 461 U.S. 424, 434 (1983). Ultimately the opposing party bears the burden of providing specific evidence to challenge the accuracy and reasonableness of the hours charged. Failure to offer either countervailing evidence or persuasive argumentation in support of the opposing party’s position permits the district court to presume a properly supported fee application is reasonable. See U.S. v. $28,000.00 in U.S. Currency, 802 F.3d 1100, 1105-06 (9th Cir. 2015). C. Kaotica’s Application 1. Reasonableness of Hourly Rates Kaotica submitted the declaration of Dario A. Machleidt in support of its fee application. [Doc. No. 175-2.] Mr. Machleidt, a partner at Kilpatrick Townsend & Stockton LLP (“Kilpatrick), was lead counsel in this litigation for Kaotica. Mr. Machleidt identified Kilpatrick as an international law firm with an award-winning intellectual property practice. He attested to the hourly rates charged by the trial team, including himself, Kilpatrick associates Kathleen Geyer and Kristin Adams, Kilpatrick paralegals Steve Bassett and Louie Crumbley, and trial technology consultant Arneita Gray. During the course of the litigation, Mr. Machleidt’s hourly rates ranged from $795 to $1125. Associates Geyer and Adams billed at hourly rates of $495 to $795 and $595 to $845 respectively. The paralegal rate ranged from $410 to $475 an hour and Ms. Gray’s hourly rate was between $225 and $265. Mr. Machleidt submits that these rates are in line with its peer firms and supported that with reference to the 2023 AIPLA Report on the Economic Survey as a benchmark for reasonableness of attorneys’ fee rates in intellectual property cases and LexisNexis CounselLink’s 2025 Trends Report on billing rates. [Doc. No. 175-1, at 10-13.] The rates are consistent with awarded hourly rates in civil litigation in this District. See Mereces-Benz [sic] Grp AG v. A-Z Wheels LLC, No. 16-cv-875-JLS, 2022 WL 7718800, at *2 (S.D.Cal. Oct. 13, 2022) (this District has previously used AIPLA survey data to determine reasonable fee rates in other intellectual property cases). Despite its assertion that the rates charged by Kaotica’s counsel are unreasonably high, Iconic corroborates Kaotica’s hourly rates as reasonable with reference to the 2024 Real Rate Report documenting rates in trademark cases at $754 to $1,129 for partners and $540 to $922 for associates in the relevant time period. [Doc. No. 196 at 27.] Given this Court’s own familiarity with the San Diego legal market and the intellectual property practice area, the supporting evidence provided by Kaotica and Iconic, the Court agrees that the requested rates are reasonable and in line with the prevailing market rates for this type of litigation in this District for the relevant time period. 2. Reasonable Number of Hours on this Case Kaotica’s application includes detailed monthly billing statements and charts summarizing those statements. [Doc. Nos. 175-2; 175-8; 207; 208.] The statements inc

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