JCW INVESTMENTS, INC. v. Novelty, Inc.

366 F. Supp. 2d 688, 2005 U.S. Dist. LEXIS 7703, 2005 WL 975657
CourtDistrict Court, N.D. Illinois
DecidedApril 25, 2005
Docket02 C 4950
StatusPublished

This text of 366 F. Supp. 2d 688 (JCW INVESTMENTS, INC. v. Novelty, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
JCW INVESTMENTS, INC. v. Novelty, Inc., 366 F. Supp. 2d 688, 2005 U.S. Dist. LEXIS 7703, 2005 WL 975657 (N.D. Ill. 2005).

Opinion

MEMORANDUM OPINION AND ORDER

GETTLEMAN, District Judge.

Like the images in the mirrors of a barbershop, this case seems to go on infinitely, with each new phase slightly smaller, but no less complex and vexing, than the one proceeding it. The latest dispute involves the successful plaintiffs petition for attorney’s fees, including the most recent request by plaintiff to require defendant to pay yet additional fees and costs incurred in connection with the fee dispute. By this opinion, the court intends to put an end to this nonsense.

The facts of this case are generally set forth in the court’s previous opinions dated September 20, 2002, and October 30, 2003. 1 Briefly, defendant Novelty, Inc. copied the trademarks and dolls belonging to plaintiff JCW Investments, Inc., in connection with plaintiffs line of farting dolls. The case was filed in mid-2002 and included litigation with respect to plaintiffs successful motion for a preliminary injunction, plaintiffs successful motion for partial summary judgment on the issue of validity of its copyright and defendant’s copying of one of the dolls, and a jury trial in which a verdict was rendered in favor of plaintiff and against defendant, awarding actual damages of $241,000 and punitive damages of $50,000, for a total of $291,000. In addition, the parties engaged in extensive post-trial motions, which were all decided against defendant.

After all the dust settled with respect to the merits, plaintiff petitioned for attorney’s fees because the jury had found, and the court concurred, that defendant willfully infringed plaintiffs marks. Pursuant to Local Rule 54.3, the parties apparently attempted to settle the issue of attorney’s fees, and when they could not do so the court appointed a special master, John W. Cooley, pursuant to Fed.R.Civ.P. 53. The master conducted appropriate proceedings (no one complains about his procedural decisions) and, on February 9, 2005, issued a 54 page report and recommendation that the court award plaintiff the total sum of $596,399.82 in attorney’s fees and expenses. Defendant has filed objections to the special master’s report and recommendation, and the matter has been fully briefed. Defendant is correct that, pursuant to Fed.R.Civ.P. 53(g), the court re *690 views the special master’s report and recommendation de novo.

Defendant first criticizes the special master by complaining that he did not apply “elevated scrutiny” to plaintiffs billing records because plaintiffs counsel had taken the case on a contingent fee basis, citing Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 483 U.S. 711, 722, 107 S.Ct. 3078, 97 L.Ed.2d 585 (1987). Defendant is wrong. Delaware Valley holds only that a court generally should not increase the lodestar fee to compensate the winning party’s attorneys for having assumed the risk of the litigation. In the instant case, plaintiff does not request anything greater than the actual lodestar amount.

Defendant next criticizes the special master’s analysis of the 2003 American Intellectual Property Law Association Report of Economic Survey (“AIPLA Report”). However, both parties in the proceedings before the special master cited to the AIPLA Report in arguing their respective positions. That report found that a reasonable range for two separate cases through trial, one trademark and one copyright, resulted in fees in the range of $376,580 on the low end and $616,170 on the high end. Defendant complains that the special master’s award in the instant case, which totaled (including expenses) 97% of the high end figure, was improper in light of the nature of this case, which defendant categorizes as “below average intellectual property litigation.” Defendant argues that because there were no experts, the amount of paper was only a “one six inch stack,” there were “only” eight depositions, and the trial lasted “only” two and one-half days, this case should have resulted in a fee award closer to the low end of the “reasonable” range rather than the high end.

The court disagrees. As noted above and in the previous opinions entered in this case, this litigation has been anything but “below average.” In a dispute in which defendant’s products were so obviously knock-offs of plaintiffs protected dolls, the case took on a life of its own unnecessarily and litigiously. Instead of simplifying the dispute, defendant insisted on contesting practically every issue, resulting in unnecessarily protracted litigation and requiring the court to decide numerous issues before the case even got to trial, including preliminary injunction and summary judgment motions. Significantly, defendant was justifiably found guilty of willful infringement, resulting in an award of punitive damages. There is nothing “below average” about this case.

Defendant next complains that the special master erred in giving too much weight to plaintiffs billing records, and not considering sufficiently that defendant’s attorneys billed far less than plaintiffs. The court has reviewed the special master’s analysis of the billing records and finds nothing wrong, and therefore adopts that analysis. Perhaps the best that can be said about defendant’s argument on this point is that the proof is in the pudding. Despite defendant’s position that it had to assume a burden of proof on its counterclaims and in light of the court’s early rulings in the case, the fact remains that the burden of proof of infringement and remedy was always on plaintiff. By meeting that burden, plaintiff proved its case to the satisfaction of the court and the jury. That its lawyers spent more time than defendant’s in doing so can hardly be used to reduce the amount of fees owed to plaintiff. Defendant’s position that the superior experience of Greg Smith, plaintiffs lead counsel, should have resulted in efficiencies when compared to the relative inexperience of defendant’s lead counsel is, *691 as the special master noted, “sheer conjecture.” Without proof that plaintiffs attorneys fabricated time records or padded them in an inappropriate manner, there is simply no reason to reduce the fees generated by time that was so obviously well-spent from plaintiffs perspective.

Likewise, defendant’s specific objections to the hours spent by plaintiffs attorneys in amending the complaint, conducting discovery, post-trial motions, the summary judgment proceedings, and trial preparation are without merit. The fact that defendant’s lawyers spent less time, again, is not determinative. To the contrary, perhaps defendant’s lawyers spent less time because they had less evidence with which to defend against an overwhelming plaintiffs case of copyright and trademark infringement. Finally, on this point, the court does not find the entries that defendant contends are “vague” to be anything of the sort. Although other judges have from time to time criticized counsel for failing to detail time spent on such matters as trial preparation and research, given the litigious nature of this case this court does not find the entries to be sufficiently vague to require a reduction.

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Related

JCW Investments, Inc. v. Novelty, Inc.
222 F. Supp. 2d 1030 (N.D. Illinois, 2002)
JCW Investments, Inc. v. Novelty, Inc.
289 F. Supp. 2d 1023 (N.D. Illinois, 2003)

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Bluebook (online)
366 F. Supp. 2d 688, 2005 U.S. Dist. LEXIS 7703, 2005 WL 975657, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jcw-investments-inc-v-novelty-inc-ilnd-2005.