Fossil Told to Pay Attorneys’ Fees for Frivolous Trademark and Patent Defense

Fossil Trademark Patent Defense

Fossil Inc., the maker of handbags, jewelry, and other apparel and accessories, was ordered to pay the attorneys’ fees of a company that successfully sued Fossil for trademark and patent infringement.

Plaintiff Romag Fasteners Inc. makes and sells magnetic snap fasteners used in handbags and other accessories.  It holds a US patent for “Magnetic Snap Fasteners” and also a registered trademark for the mark “ROMAG” used in connection with these fasteners.

Romag sued Fossil, Macy’s, Nordstrom, and other stores for patent infringement, trademark infringement, and other cause of action based on sales of handbags allegedly including infringing fasteners.

In April, a federal jury in Connecticut returned a verdict finding Fossil liable for trademark infringement, false designation of origin, common law unfair competition, and violations of the Connecticut Unfair Trade practices Act. The jury also found Fossil and Macy’s liable for patent infringement.

The jury awarded Romag $7 million based on Fossil’s profits, but the judge ruled that damages based on lost profits were only available for willful trademark infringement, which Romag had not established. The remaining award was $41,863 against Fossil and $12,562 against Macy’s.

The judge ordered that Fossil pay part of Romag’s attorneys’ fees on the grounds that Fossil’s defense that the patent at issue was invalid “bordered on frivolous.”

The judge noted that fasteners were only a “minute portion” of Fossil’s and Macy’s costs of doing business but that the patents were Romag’s “primary business assets.”

She said:

There is a risk that plaintiffs similar to Romag could be discouraged from bringing claims that may garner only small awards but are nonetheless vital to the survival of their businesses where defendants, as was the case here, aggressively pursue invalidity counterclaims in an attempt to prolong litigation and exponentially increase the cost and risk of pursuing a lawsuit.

The judge cited the US Supreme Court’s recent decision in the Octane Fitness case, which allows judges to require a losing party to pay the winner’s attorneys’ fees in exceptional cases.

Romag had asked for $3 million in fees, but the judge rejected several of the grounds and ordered additional briefing on the amount.

Fee Shifting in Patent Cases

The Romag case shows that raising a frivolous (or borderline frivolous) defense can be equally expensive.

Patent Attorney, Laura Lloyd says,

This is an interesting result and I would remind clients to consider the merits or dangers of fee shifting in all stages of an infringement proceeding.

If you are facing an intellectual property infringement suit and want help deciding whether you should fight or settle, contact our office to arrange a free initial consultation at 1-855-UR-IDEAS.

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