Bad dilution claims are so common that they aren’t “exceptional” for fee-shifting, court rules

Parks, LLC v. Tyson Foods, Inc., 2017 WL 3534993, No. 15-cv-00946
(E.D. Pa. Aug. 17, 2017)
Tyson sought attorneys’ fees in this Lanham Act case after
its summary judgment victory was affirmed by the Third Circuit. The court found
that this was not an exceptional case meriting an award of fees, despite the
novelty of Parks’ main legal theories.
There was an unusual degree of discovery trouble in the case,
but not because of “wasteful procedural maneuvers” or “dilatory tactics.” Instead,
the parties just didn’t seem to understand each other’s claims or to work
collaboratively at discovery; this didn’t mean that one side litigated the case
in an unreasonable manner.
Tyson argued that all three of Parks’ Lanham Act theories—false
advertising, false association, and trademark dilution—were frivolous, but the
court disagreed. The primary claims were for false advertising and false
association. The first theory was that Tyson’s use of the name “Park’s Finest”
was false, or at least misleading, because it conveyed to consumers that Tyson
was selling Parks’s finest product. From early on, the evident problem was that
this seemed to simply duplicate the false association claim.  But that didn’t weigh against a fee award,
because “at the time Parks brought the claim, there was little case
law—particularly in this circuit—addressing the dividing line between claims of
false advertising and claims of false association.”  On appeal, the Third Circuit also noted that
this case offered an opportunity to “clarify” what it had never before directly
held about that line.  “Given the state
of the governing law at the time this case was filed, Parks’s decision to
attempt a claim under the banner of false advertising was not ‘unreasonable.’”
Anyway, the collapse of theory one into theory two (false
association) meant that the merits were the same as to both, and the false
association claim was not so “exceptionally meritless” as to warrant fee
shifting. But really, this case was about failed proof: the Parks name “once
enjoyed widespread recognition” as a result of an ad campaign that was at one
time “ubiquitous and long-running,” so much so that the appellate judges
recalled it at oral argument.  That
recognition, it appeared, no longer existed, but this past glory “differentiates
this case from the mine-run of frivolous trademark infringement suits brought
by plaintiffs who seek to prevent others from infringing on marks that do not
and have never had the sort of recognition in the marketplace that would
entitle them to protection.” The similarity of the parties’ marks and goods
also made the suit potentially meritorious. 
“Even now, Tyson perhaps does not appreciate how close it may have come
to a different result in this case.… A properly-designed survey (and perhaps a
bit more modesty in the geographic area Parks sought to protect) might have
changed the course of this case.”
As for Parks’s claim for trademark dilution, which was
voluntarily withdrawn at summary judgment, it “had little chance of success
from the start,” but a fee award isn’t about how great the disparity was
between the parties’ positions—it’s about whether the present case “stands out
from others.”  And dilution claims are
commonly “tacked on to claims for trademark infringement or false association,”
despite the rarity of true fame; as a result, “the vast majority of attempted
dilution claims not only fail, but had very little chance of ever succeeding.”  Fees could be available for some non-meritorious dilution claims,
but in light of the Parks name’s former strength, “the company’s attempt to
characterize its mark as ‘famous’ is not so different from numerous other
plaintiffs that have tried the same thing, despite having hardly any chance of
being considered alongside that pantheon of truly famous marks.” [Urgh.]

Parks’s motivation, though not dispositive, also seemed
legitimate to the court: Parks “genuinely viewed Tyson’s use of the name
‘Park’s Finest’ as an existential threat—a potential final blow to the
once-prominent company, inflicted by a competitor that, by revenue, is
approximately four thousand times its size.” Parks’ good faith was relevant,
and also weighed against a fee shift.

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