Case 1:15-cv-10154-PAE Document 539 Filed 06/05/23 Page 1 of 33
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`
`FOCUS PRODUCTS GROUP INTERNATIONAL, LLC,
`ZAHNER DESIGN GROUP LTD., HOO KLESS SYSTEMS
`OF NORTH AMERICA, INC., SURE FIT HOME
`PRODUCTS, LLC, SURE FIT HOME DECOR HOLDINGS
`CORP., and SF HOMED DECOR, LLC,
`
`15 Civ. 10154 (PAE) (SDA)
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`OPINION & ORDER
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`Plaintiffs,
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`-v-
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`KARTRI SALES COMPANY, INC., and MARQUIS MILLS,
`INTERNATIONAL, INC.,
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`Defendants.
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`PAUL A. ENGELMA YER, District Judge:
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`This decision resolves-and grants-a motion by the prevailing plaintiffs for an award of
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`reasonable attorneys' fees in this litigation under the fee provisions of the Patent Act, 35 U.S.C.
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`§ 285, and the Lanham Act, 15 U.S.C. § 11 l 7(a). The Court also grants plaintiffs' motions for
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`awards of permissible costs, and pre- and post-judgment interest.
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`I.
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`Background
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`The long and tangled history of this case is set out in detail across various opinions and
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`orders in this case, including in the Court's 168-page bench trial decision, issued December 22,
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`2022, resolving the claims in the case not previously resolved on summary judgment. See Dkt.
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`501 ("Trial Decision"). The following brief overview is limited to the context necessary for the
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`present motions.
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`Key Pretrial Events
`A.
`Plaintiffs-to whom the Court collectively refers as "Focus"-manufacture, sell, and
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`distribute distinctive "hookless" shower curtains. These have obtained considerable acclaim and
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`Case 1:15-cv-10154-PAE Document 539 Filed 06/05/23 Page 2 of 33
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`success in the hospitality industry for their ease of installation and replacement. In this litigation,
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`Focus alleges that defendants Kartri Sales Company, Inc. ("Kartri"), and Marquis Mills,
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`International, Inc. ("Marquis"), together manufactured, sold, and distributed confusingly similar
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`shower curtains, and in so doing, unlawfully exploited Focus's intellectual property, in violation
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`of federal and state law.
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`On June 30, 2015, Focus initiated this litigation. It came, in short order, to include claims
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`of willful infringement of three utility patents and one design patent, in violation of the Patent
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`Act; willful infringement of and unfair competition with two trademarks and trade dress, in
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`violation of the Lanham Act; and unfair competition, in violation of New York law.
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`On July 14, 2016, in a bench ruling, the Court denied, in their entirety, motions to dismiss
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`by both defendants. Dkt. 77.
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`On April 16, 2020, after a Markman hearing and long and contentious discovery, the
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`Court resolved cross-motions for partial summary judgment. These resulted predominantly in
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`(I) entry of summary judgment for plaintiffs on certain infringement claims under each of the
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`three utility patents; and (2) dismissal of numerous counterclaims brought by Marquis. Dkt. 297;
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`see id. at 31 (design patent not before Court).
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`On August 5, 2021, the Court resolved plaintiffs' motions in limine in a bench ruling.
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`Dkt. 412. On November 23, 2021, the Court resolved defendants' motions in limine in a bench
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`ruling. Dkt. 436.
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`The Bench Trial and Decision
`B.
`On June 27-29 and July 26-28, 2022, the Court held a bench trial as to the remaining
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`claims. On December 22, 2022, the Court issued a lengthy decision resolving the outstanding
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`claims. Dkt. 501.
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`2
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`Case 1:15-cv-10154-PAE Document 539 Filed 06/05/23 Page 3 of 33
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`As to liability, the Court: (1) found both defendants liable for infringement of and unfair
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`competition with plaintiffs' EZ-ON 1 trademark mark and trade dress under 15 U.S.C. § 1125(a),
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`and for unfair competition with plaintiffs' EZ-ON mark and trade dress under New York law;
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`(2) found Kartri liable for infringement of and unfair competition with plaintiffs' HOO KLESS
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`mark under 15 U.S.C. § 1125(a) and for unfair competition with plaintiffs' HOOKLESS mark
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`under New York law; (3) denied all of defendants' affirmative defenses; and (4) found
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`defendants' infringement of the utility patents and trade dress to have been willful between
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`Februmy 27, 2015 and November 15, 2018.
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`As to dmnages, the Court (1) awarded plaintiffs lost profits, in the amount of $970,324,
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`for defendants' infringement of the utility patents and trade dress, covering the period October
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`16, 2013, to November 15, 2018; the Court trebled the award for the period March 1, 2015 to
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`November 15, 2018, resulting in a final, enhanced lost profits award of$2,783,687; (2) awarded
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`plaintiffs a reasonable royalty of$53,907 for defendants' infringement of the utility patents and
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`the trade dress, covering the period October 16, 2013 to November 15, 2018; the Comi trebled
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`the award for the period March 1, 2015 through November 15, 2018, resulting in a final,
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`enhanced reasonable royalty award of$154,649; (3) enjoined both defendants from future
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`infringements of, and unfair competition with, the EZ-ON mark and trade dress; and Kartri from
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`the smne as to the HOOKLESS mark; and (4) denied plaintiffs' claims for disgorgement of
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`defendants' profits and a reasonable royalty for defendants' infringement of the EZ-ON mark.
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`The Comi also set a schedule for the briefing of the issues of reasonable attorneys' fees,
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`prejudgment interest, and post-judgment interest.
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`C.
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`The Motions for a Fee Award, Prejudgment Interest, and Post-Judgment
`Interest
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`1 As in its trial decision, the Court will refer to the mark as "EZ-ON." Trial Decision at 8 n.10.
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`3
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`On January 19, 2023, plaintiffs filed a memorandum of law in support of their motion for
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`attorneys' fees, prejudgment interest, and post-judgment interest. Dkt. 505 ("Focus Mem."). In
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`support, plaintiffs filed two sets of invoices, Dkt. 505-1; Dkt. 505-2; a spreadsheet summarizing
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`these, Dkt. 505-3; and other materials, Dkts. 505-4-7. Plaintiffs sought a fee award of
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`$1,549,544.91. On Februaiy 16, 2023, Kartri filed a memorandum oflaw in opposition, Dkt.
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`524 ("Kartri Mem."), with attached exhibits, Dkts. 524-1-4. On February 17, 2023, Marquis
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`filed a brief memorandum oflaw in opposition, Dkt. 525 ("Marquis Mem. "), with attached
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`exhibits, Dkts. 525-1-2, that principally adopted Kartri's arguments. On March 2, 2023, Focus
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`filed a reply, Dkt. 530 ("Focus Rep."), with attached exhibits, Dkts. 530-1-5, and a supplemental
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`declaration, Dkt. 531.
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`II.
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`The Motion for an Award of Fees and Costs
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`A.
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`Governing Legal Principles
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`"Ordinarily, under the 'American Rule,' each party must bear its own attorneys'
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`fees." Benihana of Tokyo, LLC v. Benihana, Inc., No. 14 Civ. 224 (PAE), 2018 WL 3574864, at
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`*5 (S.D.N.Y. July 25, 2018), ajf'd, 771 F. App'x 71 (2d Cir. 2019) (summary order). "However,
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`where there is 'explicit statutory authority,' courts may award attorneys' fees." Id. (quoting
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`Buckhannon Ed. & Care Home, Inc. v. W. Va. Dep 't of Health & Hum. Res., 532 U.S. 598, 602-
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`03 (2001)). In identical language, the Patent Act and Copyright Act each confer such authority,
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`stating that "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing
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`party." See 35 U.S.C. § 285; 15 U.S.C. § 1117(a).
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`In Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014), the
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`Supreme Court construed the Patent Act provision. The Second Circuit has since adopted that
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`4
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`construction as governing fee applications under the Lanham Act. See Sleepy 's LLC v. Select
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`Comfort Wholesale Corp., 909 F.3d 519, 530-31 (2d Cir. 2018).
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`Under Octane, an "exceptional case" is "one that stands out from others with respect to
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`the substantive strength of a party's litigating position ( considering both the governing law and
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`the facts of the case) or the unreasonable manner in which the case was litigated." 572 U.S. at
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`554. District courts have wide latitude to determine whether a case is exceptional; the inquiry is
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`a case-by-case exercise that considers the totality of the circumstances. Id.
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`In applying this standard, courts may consider a nonexclusive list of factors including
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`"frivolousness, motivation, objective unreasonableness (both in the factual and legal components
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`of the case) and the need in particular circumstances to advance considerations of compensation
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`and deterrence." Id. at 554 n.6 (citing Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19
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`(1994)); see Manhattan Rev. LLC v. Yun, 765 F. App'x 574, 578 (2d Cir. 2019) (summary order)
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`( district courts are "encourag[ ed]" to apply "the Fogerty factors from the Copyright Act context"
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`in exercising discretion as to fee requests under the Lanham Act).
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`Although highly relevant, fraud, bad faith, or willful infringement are no longer required
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`for a fee award under the Lanham Act. See 4 Pillar Dynasty LLC. v. NY. & Co., 933 F.3d 202,
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`215-16 (2d Cir. 2019) (precedents requiring a showing of willfulness have been overtaken
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`by Octane). However, "although Octane reduced the showing required for an award on the
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`ground of objective baselessness, courts continue to hold claims of baselessness to a high
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`bar." Small v. Implant Direct Mfg. LLC, No. 06 Civ. 683 (NRB), 2014 WL 5463621, at *3
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`(S.D.N.Y. Oct. 23, 2014). As a result, "most post-Octane cases awarding fees continue to
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`involve substantial litigation misconduct." Hockeyline, Inc. v. STATS LLC, No. 13 Civ. 1446
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`5
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`(CM), 2017 WL 1743022, at *5 (S.D.N.Y. Apr. 27, 2017); see, e.g., Small, 2014 WL 5463621, at
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`*4 (collecting cases).
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`B.
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`Discussion
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`1.
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`Whether a Fee Award Is Warranted
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`Focus undisputedly was the prevailing party here. It prevailed virtually across the board,
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`securing findings in its favor as to infringement-indeed, of willful infringement--ofits three
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`utility patents, of its two trademarks, and of its trade dress. 2 And it obtained substantial, and
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`enhanced, damages on these claims. Kartri and Marquis, although disputing that this was an
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`exceptional case, do not dispute that Focus was the prevailing party.
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`The Court, however, finds this to have been an "exceptional case" justifying a fee award
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`for two reasons identified in Octane: the strength of plaintiffs' litigating position and the
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`objective unreasonableness of the manner in which the case was defended. The Court addresses
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`these in the order set out in Octane, although the second reason is by far predominant in the
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`Court's assessment.
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`a.
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`Strength of Focus's Litigation Position
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`Focus's litigating position was uncommonly strong, as reflected in the Court's detailed
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`analysis of Focus's claims in the summary judgment decision and especially the bench trial
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`decision.
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`What particularly distinguishes this case from a garden-variety one in which a trademark
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`or patent holder has successfully established infringement of such rights, however, is defendants'
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`willful infringement, which the Court found with respect both to Focus's trademarks and patent
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`2 The Court did not resolve plaintiffs' patent infringement claims as to its design patent '078,
`which was stayed on consent pending a decision by the United States Patent and Trademark
`Office as to its validity. See Trial Decision at 55.
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`6
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`Case 1:15-cv-10154-PAE Document 539 Filed 06/05/23 Page 7 of 33
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`for much of the relevant period. In its bench decision, the Court reviewed the evidence that
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`Kartri and Marquis, in long marketing nearly identical products, had intentionally plagiarized
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`Focus's trade dress and patents. See Trial Decision at 77-78. This evidence overwhelmingly
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`showed, the Court held, that Marquis had "willfully closed its eyes to the high probability that
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`the Ezy Hang design [Marquis] was obtaining in China and furnishing to Kartri to sell in the U.S.
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`was infringing Focus's intellectual property rights." Id. at 77.
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`For example, Marquis uncritically accepted an unsubstantiated representation of a
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`Chinese vendor, whom it knew had worked for a manufacturer of Focus's in China, that Focus's
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`utility patents "had become a public domain kind of product" and "were about to run out";
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`Marquis and Kartri chose not to investigate whether the shower curtain product they proceeded
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`to market was covered by a valid patent in the United States or elsewhere. Id. And when the
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`vendor's patent attorney offered to conduct a patent analysis for $3,500, Marquis spurned the
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`offer. Id. Marquis chose instead to credit the vendor's unsubstantiated claims that it owned a
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`Chinese patent and that Focus, being "in deep financial trouble," was too weak to fight to
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`vindicate its intellectual property rights. Id. at 77-78. Even after Focus sent a 2015 cease-and-
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`desist letter, which spelled out the legal basis for its rights in terms that prefigured the Court's
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`eventual ruling, Kartri and Marquis stood pat, disregarding the letter and outrageously declining
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`to investigate Focus's representation to have superior rights. Id. at 78. Instead, the defendants
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`persisted in marketing their infringing product, openly describing it as a "version of
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`HOOKLESS," the name by which they knew Focus's product was known. Id.
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`For these and related reasons, the Court found, in its Lanham Act rulings, bad faith on the
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`part of defendants.
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`[T]he evidence is compelling that defendants, aware of the inroads Focus's
`innovation had made in the shower curtain market, intentionally sought to mimic
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`7
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`Case 1:15-cv-10154-PAE Document 539 Filed 06/05/23 Page 8 of 33
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`Focus's Trade Dress to deceive customers to purchase Ezy Hang and thereby to
`capitalize on Focus's goodwill. The close similarity-in both looks and sound-
`between Kartri' s Ezy Hang product and Focus's EZ-ON product reinforces this
`conclusion. These similarities are so strong that it seems plain that deliberate
`copying has occurred. Defendants did not offer a benign justification for these
`similarities--especially not for the strong similarities in look and sound between
`the Ezy Hang and the EZ-ON product. It is unavoidably clear that defendants
`intentionally, and in bad faith, sought to all-but-replicate the EZ-ON Mark so as to
`capitalize on competitor Focus's intellectual property and good will. ... Although
`the proof of bad faith is especially obvious in connection with the Ezy-Hang
`product, the Court finds that the factor of bad faith cannot be logically cabined to
`the EZ-ON Mark. Defendants' strategy of deliberate infringement, the Court finds,
`was holistic.
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`Id. at 91-92 (emphasis in original) (internal citations omitted).
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`And in connection with its findings as to damages on the patent claims, the Court found
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`enhanced-treble--damages in order as a punitive sanction for "' egregious infringement
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`behavior,' that is behavior that is 'willful, wanton, malicious, bad-faith, deliberate, consciously
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`wrongful, flagrant or-indeed-characteristic of a pirate."' Id. at 148 ( quoting Halo Elecs., Inc.
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`v. Pulse Elecs., Inc., 579 U.S. 93, 103-04 (2016)). Analyzing the "Read factors" that guide the
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`treble damages analysis, the Court found that both defendants had acted willfully from the point
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`at which they had received Focus's cease-and-desist letter on or about February 27, 2015, and
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`that they had continued to do so for more than 42 months, through November 15, 2018. Id. at
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`150; id. at 152-54 (analyzing willfulness of Marquis during this period, and noting that its
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`executive, Middleberg, "[a]lmost unimaginably[]-notwithstanding the letter's clear articulation
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`of the basis of Focus's rights--disregarded the letter," and that Kartri's owners continued to sell
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`the accused products to Kartri without seeking advice of counsel, and that such continued for
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`three years after being served the original complaint in this case); id. at 155-56 (analyzing
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`willfulness of Kartri during this period, and noting that it, too, engaged in "flagrant and
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`prolonged disregard of plaintiffs' intellectual property rights" after being put on explicit notice of
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`8
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`Case 1:15-cv-10154-PAE Document 539 Filed 06/05/23 Page 9 of 33
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`them). Other Read factors favoring enhanced damages, the Court found, included defendants'
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`failures to investigate, the duration of their misconduct, the absence of any remedial actions, and
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`their profit motivation, as direct competitors of Focus, to infringe. Id. at 157-58.
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`The strength of Focus's case, and the willfulness and egregiousness of the conduct giving
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`rise to defendants' liability, "stand[] out from others," Octane, 572 U.S. at 554, finding
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`trademark or patent infringement ( or, as here, both). The Court bases this finding on the
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`distinctive facts of this case, as measured against the assembled case law, and against the many
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`such cases under these statutes that this Court has supervised. This factor supports an award of
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`fees. See, e.g., NetSoc, LLC v. Chegg Inc., No. 18 Civ. 10262 (RA), 2020 WL 7264162, at *4-5
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`(S.D.N.Y. Dec. 10, 2020) (awarding fees under§ 285 where plaintiffs pursued "exceptionally
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`weak arguments" by, inter alia, failing to correct errors in their pleadings for months despite
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`being informed of them); Advanced Video Techs. LLC v. HTC Corp., No. 11 Civ. 06604 (CM),
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`2015 WL 7621483, at *5-9 (S.D.N.Y. Aug. 28, 2015) (same), aff'd, 677 F. App'x 684 (Fed. Cir.
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`2017); Microban Prods. Co. v. !skin Inc., No. 14 Civ. 05980 (RA) (DF), 2016 WL 4411349, at
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`*11 (S.D.N.Y. Feb. 23, 2016) (awarding attorneys' fees under Lanham Act where defendants'
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`infringement was willful), report and recommendation adopted, 2016 WL 4411414 (S.D.N.Y.
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`Aug. 18, 2016); Sub-Zero, Inc. v. Sub Zero NY. Refrigeration & Appliances Servs., Inc., No. 13
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`Civ. 2548 (KMW) (JLC), 2014 WL 1303434, at *7 (S.D.N.Y. Apr. 1, 2014) (same); Malletier v.
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`Artex Creative Int'[ Corp., 687 F. Supp. 2d 347, 358-59 (S.D.N.Y. 2010) (same).
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`b.
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`Objective Unreasonableness of Kartri and Marquis's Conduct in
`This Litigation
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`In a host of ways, Kartri and Marquis defended this case in an objectively unreasonable,
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`thoughtless, and unprofessional manner. They thereby materially and needlessly prolonged this
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`litigation, drove up costs for their prevailing adversary, and burdened the Court.
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`9
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`A thoroughgoing canvass of the docket in this case would reveal a dismaying collection
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`of unreasonable acts and omissions ill-befitting the standards of this District. A decidedly
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`nonexclusive summary of defendants' litigation improprieties includes conduct in the following
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`four categories3:
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`i.
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`Flagrant Breaches of Discovery Obligations Relating to
`Damages
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`In 2016, plaintiffs served discovery requests on defendants seeking financial information,
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`including relating to revenues, costs, and profits arising from sales of the accused products.
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`Defendants failed to provide such information in full. Plaintiffs raised the issue with Magistrate
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`Judge Ellis, identifying these (and other) discovery deficiencies; Judge Ellis ordered defendants
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`promptly to supplement their discovery. See Dkt. 114 (6/14/17 order). Defendants, however,
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`did not do so. In late January 2019-some 19 months later, now more than three years into the
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`litigation, and after the close of fact discovery, and after plaintiffs had submitted their expert
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`report based on the limited damages discovery defendants had furnished-defendants furnished
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`financial data to their damages expert, Graham Rogers. These data were squarely responsive to
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`plaintiffs' earlier discovery demands and Judge Eilis's order. As this Court later summarized in
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`resolving a motion in limine in which it imposed the sanction of precluding defendants and the
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`expert from relying on the late-produced data:
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`[T]he Court finds that defendants had access to financial evidence during fact
`discovery, which they did not disclose until well after fact discovery closed and
`well after Magistrate Judge Ellis ordered them to comply with Rule 26. Defendants
`admit this latter point .... Nor do the defendants dispute that their expert witness
`relied on this material.
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`3 Plaintiffs' motion for fees fairly chronicles, in addition to the above, other missteps by
`defendants and their counsel during this litigation. See Focus Mem. at 4-14.
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`See Dkt. 412 at 11; see also id. at 7-16 (8/5/21 conference, recounting pertinent history, in
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`explaining imposition of sanctions under Fed. R. Civ. P. 37). Further, in the course oflitigating
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`this point, defendants dissembled to the Court, falsely representing that they had produced the
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`data in question. As the Court ruled in imposing sanctions:
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`[D]efendants also claim to have "provided the additional financial information as
`soon as defendants were aware." That is simply false. The record demonstrates
`that defendants provided the information to their expert a month before they gave
`it to Focus and that it was not defendants' initiative to provide it to Focus. They
`did so only after Focus, having ascertained during Rogers' deposition that
`defendants had provided him with information that Focus had never been given,
`demanded such information.
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`Id. at 13-14 (internal citation omitted).
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`These breaches were consequential. Indeed, defendants admitted that the evidence they
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`had willfully denied plaintiffs was "critical" and "important to the ultimate truth of this case."
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`Id. at 14. Defendants' breaches caused the parties and the Court to devote substantial time
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`attempting to enforce defendants' discovery obligations and later litigating and fashioning a
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`remedy for defendants' breaches. Further, defendants' brazen failure to produce their sales and
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`profit data from the accused profits stymied plaintiffs in attempting to reliably establish their
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`damages. See id. at 15 (recounting ways in which defendants' failure to produce data relevant to
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`damages impaired Focus's fact discovery, expert analysis, questioning of defendants' damages
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`expert, and ability to investigate pertinent topics). And, as reflected in the bench trial decision,
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`defendants' breach denied the Court, in its capacity as factfinder, the best evidence of damages,
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`forcing the Court to base aspects of its damages calculations on reasonable assumptions rather
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`than on hard and complete data. See, e.g., Trial Decision at 110, 132-34.4
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`4 Relatedly, the sales data Kartri did produce was demonstrably false. As plaintiffs' expert John
`Elmore persuasively testified at trial, Kartri's data underreported its sales, so as to create the
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`ii.
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`Repeated Violations of the Scheduling Order, the Federal
`Rules of Civil Procedure, and the Court's Individual Rules
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`In a host of contexts, defendants breached basic court protocols and rules. Albeit
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`generally by modest margins, they repeatedly missed filing deadlines-including for their
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`summary judgment brief, compare Dkt. 230, with Dkt. 253, for their motion for reconsideration,
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`see Dkt. 307, and for their expert report, see Dkt. 217, and filed an unauthorized and untimely
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`motion in limine, see Dkt. 364 at 9. Their submissions on summary judgment were grossly
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`deficient, compelling the Court to state the following in its summary judgment decision:
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`[Defendants'] Rule 56.1 statement and response persistently fails to conform to the
`local rules and regularly lacks citations to the record. Factual propositions declared
`by the defense for which defense counsel has not submitted admissible evidentiary
`support have not been credited by the Court. The defense's 56.1 statement is a
`striking replica of defendants' memoranda oflaw, suggesting a lack of appreciation
`of the purpose of such a statement. This, along with the 56.1 statements' sometimes
`maddeningly incomprehensible formatting, makes it particularly unhelpful to the
`Court.
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`Dkt. 297 at 2 n.1 (internal citations omitted). Defendants also persistently failed to meet and
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`confer before raising issues, as the Court's Individual Rules required. See, e.g., Dkt. 424. And
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`they improperly raised defenses at the brink of trial that they had not raised earlier, including in
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`the parties' joint pretrial order; these included purported defenses of a lack of standing, of "non-
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`infringing fair use," of"profit disgorgement preclusion," of a "te1minal disclaimer" defense, and
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`of unclean hands and equitable estoppel. See Dkt. 365 at 5 ("Defendants have utterly failed to
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`explain their abject failure to raise these defenses years ago, and their delay in doing so until the
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`11th hour in this litigation."); see also Dkt. 412 at 19-24. The Court ultimately was required,
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`impression that it had long sold its accused shower curtains at a loss. Dkt. 488 at 421-22. This
`was both improbable and inconsistent with the fact that Kartri elsewhere had admitted making a
`profit. See Dkt. 490 at 716; see Focus Mem. at 6 & n.6 (elaborating on basis for asserting such
`falsity).
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`12
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`Case 1:15-cv-10154-PAE Document 539 Filed 06/05/23 Page 13 of 33
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`after hearing plaintiffs' response, to preclude these and any additional defenses not raised or
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`listed in the joint pretrial order, and to admonish defendants-at a point when the case was
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`headed for a jury trial-as follows:
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`Because the defendants have demonstrated an intention to continue to pursue
`untimely and indeed some explicitly precluded defenses, the Court admonishes
`defendants to carefully measure their trial defenses so as to assure that any defense
`they intend to raise at trial was previously timely raised. The Court admonishes
`defendants that any attempt before the jury to inject defenses that the Court has now
`precluded, or that defendants later conjure that were not pled, will merit a rebuke
`in front of the jury. Defendants' continued attempts to raise defenses and make
`arguments that have already been forfeited or rejected has wasted counsel[s'] and
`the Court's time. The Court will not allow the defendants to reprise such conduct
`before the jury.
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`Dkt. 412 at 26. 5
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`iii.
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`Flouting or Ignoring Court Rulings
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`On multiple occasions, defendants flouted prior court rulings, requiring the Court ( and
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`plaintiffs) to revisit these issues. Three examples suffice. First, although the Court had ruled
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`that plaintiffs had shown the non-functionality of their trade dress, defendants listed that in their
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`joint pretrial order as a defense they intended to pursue at trial. The Court thus had to preclude it
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`expressly, in bench rulings. See id. at 20; Dkt. 436 at 7. Second, in the joint pretrial order,
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`defendants stated that they planned to pursue at trial a defense that the HOO KLESS trademark is
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`generic. The Court thus had to preclude that defense expressly, too. See Dkt. 412 at 21-22.
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`Third, the Court had denied defendants' motion for summary judgment on the issue of whether
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`the February 1, 2012 Carnation license agreement conferred ownership of the EZ-ON mark on
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`5 See also, e.g., Dkt. 204 (rejecting defendants' attempt, years after the Markman hearing and the
`Court's issuance of the Markman order, to propose a new claim construction, of the word
`"from," stating: "The time for proposing claim constructions has long since passed. Despite
`ample opportunity, Kartri never placed the term "from" in dispute. It therefore forfeited the
`opportunity to do so now. The Court is confident that the jury will have no difficulty
`understanding this commonplace term.").
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`Case 1:15-cv-10154-PAE Document 539 Filed 06/05/23 Page 14 of 33
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`plaintiffs' predecessor, ruling that this was a question of fact that required resolution at trial.
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`Defendants, however, pursued the same relief in the form of a motion in limine, which the Court
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`denied. See Dkt. 436 at 4-5 ("[D]efendants have already moved for summary judgment on the
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`same claim, and the Court has denied that motion ... who owns the EZ[-]ON mark remains a
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`question of fact, to be decided by a jury. The Court will not revisit it here.").
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`iv.
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`Taking Baseless Positions
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`Defendants at numerous points took indefensible and unsubstantiated litigation positions.
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`Some, like some of the arguments above, were unreasonable on account of preclusive earlier
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`court rulings; others were substantively unreasonable; others were devoid of legal authority or
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`factual support. The following are representative examples.
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`At the outset, Kartri brought a counterclaim appearing to allege tortious interference and
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`monopolistic conduct. But Kartri did not adduce any evidence in support, and it did not defend
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`(or address) the counterclaim when plaintiffs moved against it at summary judgment, leaving the
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`Court to grant plaintiffs' motion as unopposed. Dkt. 297 at 27. Marquis similarly brought a
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`counterclaim for "patent misuse," but it did not adduce---or attempt to adduce-any evidence in
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`support, resulting in its dismissal, too, on summary judgment. Id. at 28. At summary judgment,
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`defendants also argued that plaintiffs' three utility patents were invalid, but did not offer any
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`admissible evidence in support. The Court rejected that claim as baseless. Id. at 17-19.
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`Later, in the joint pretrial order, defendants stated that they intended to defend on the
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`ground that "[p ]laintiffs and/or their licensees have failed to mark product packaging and/[]or
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`marketing materials displaying [p ]laintiffs' common law trademark and trade dress with notice to
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`identify the source of the goods to establish secondary meaning." Dkt. 323 at 9. After plaintiffs
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`called out this argument as meritless and contrary to established law, Dkt. 325 at 12-13, the
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`Case 1:15-cv-10154-PAE Document 539 Filed 06/05/23 Page 15 of 33
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`Court gave defendants until August 12, 2021 to indicate whether they intended to pursue such a
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`defense, and to identify case law in support, Dkt. 412 at 21. Defendants did not do so, resulting
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`in the Court's striking this defense. In the joint pretrial order, defendants also indicated that they
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`intended to argue that Focus's trade dress definition was required to have been "recited in
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`plaintiffs' business records." Id. at 23. The Court granted plaintiffs' motion in limine to
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`preclude that line of defense. It ruled: "Focus is right. Defendants have not provided any
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`support for their legal claim in their opposition. They have not identified any statute or case law
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`requiring a plaintiff to produce business records establishing a trade dress definition. Nor has the
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`Court found any." Id. at 23-24.6
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`c. Overall Assessment
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`Given defendants' multifaceted and protracted litigation misconduct, this case easily
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`qualifies as an "exceptional case" when measured against Lanham Act and Patent Act precedents
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`applying that standard. Cases found "exceptional" based on the unreasonable manner in which
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`the losing party conducted itself in litigation have relied on comparable, and indeed less glaring,
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`records of vexatiousness. See, e.g.,Am. Exch. Time LLCv. TissotS.A., No. 17 Civ. 4737 (VM),
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`2022 WL 17414348, at *4-5 (S.D.N.Y. Dec. 5, 2022) (finding case exceptional and awarding
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`attorneys' fees where defendants litigated in "unreasonable manner" by filing opposition to
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`trademark application that forced plaintiff to commence litigation; appearing in action and
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`requesting conferences, and then asking to participate as an observer rather than appearing; and
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`filing a new trademark application that led to plaintiffs application being suspended after a year
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`of settlement discussions); Venus by Maria Tash, Inc. v. Prinatriam Ltd., No. 21 Civ. 2098
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`6 Plaintiffs' motion for fees lists numerous other baseless arguments that defendants pursued.
`See Focus Mem. at 11-13.
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`Case 1:15-cv-10154-PAE Document 539 Filed 06/05/23 Page 16 of 33
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`(LGS) (RWL), 2022 WL 4085747, at *6 (S.D.N.Y. Aug. 24, 2022) (same, where, inter alia,
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`defendants "frustrated the litigation process" by failing to appear), report and recommendation
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`adopted, 2022 WL 5110594 (S.D.N. Y. Oct. 4, 2022); Experience Hendrix, L.L. C. v. Pitsicalis,
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`No. 17 Civ. 1927 (PAE) (GWG), 2020 WL 3564485, at *15-16 (S.D.N.Y. July I, 2020) (same,
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`where defendants disobeyed court orders, refused to participate in discovery, and defaulted),
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`report and recommendation adopted sub nom. Experience Hendrix, LLC v. Hendrix, 202