Every July, hundreds of thousands of people flock to San Diego for the con of all cons – Comic-Con. Founded in 1970, San Diego Comic-Con International, or as it is more commonly known “Comic-Con” or “SDCC,” is the biggest multi-genre entertainment and comic book convention in the world. SDCC badge holders and non-badge holders alike descend upon the convention center and the surrounding Gaslamp District for the opportunity to sit in on panels with their favorite artists, see sneak peeks into new developments in television and movies, and, of course, snag limited edition memorabilia. SDCC has grown so big, the city has plans to renovate and expand the convention center motivated almost wholly by Comic-Con itself. Since its conception, SDCC has inspired hundreds of similar events but nothing on the scale of the original.

In 2013, the first Salt Lake Comic Con took place in Salt Lake City. Like SDCC, Salt Lake Comic Con was held over a few days and included special celebrity guests, bringing in an attendance of over 70,000. However, unlike SDCC, Salt Lake Comic Con is a for-profit event. As attendance at the Salt Lake convention increased, SDCC demanded Salt Lake Comic Con cease using the term “Comic Con” in light of SDCC’s federal trademark registrations for the same. Despite Salt Lake Comic Con’s much younger age and lack of recognition, it declined to change its name or its advertising (e.g., “Comic Con is coming to Utah”), leading SDCC organizers to file a lawsuit for trademark infringement.  Ultimately, Salt Lake Comic Con’s decision to attempt to take down a pop culture giant would cost it millions of dollars in fees.

The defendants’ defense hinged on the argument that “Comic Con” has become generic, or, that “Comic Con” has become synonymous with multi-genre entertainment and comic book conventions. Had Salt Lake Comic Con’s defense been successful, SDCC’s federal trademark registrations would have been canceled. In December 2017, a jury decided in favor of SDCC, finding that the marks are valid and that the defendants’ event used it in a way to likely cause confusion to customers. Essentially, attendees of Salt Lake Comic Con, or potential consumers viewing its advertising and marketing, would likely assume an affiliation between SDCC and Salt Lake Comic Con even though there is none. However, despite SDCC’s demand for $12 million, the jury only awarded $20,000 for corrective advertising, finding the infringement to be unintentional.

SDCC appealed, citing the case as an “exceptional” one under the Lanham Act and seeking reimbursement of legal fees in the amount of $5 million. In its lengthy list of allegations, SDCC requested attorney fees because due to the defendants’ conduct throughout the litigation, including: taking unreasonable and unsupportable legal positions and making arguments based on distorted facts and inapplicable/incorrectly cited case law; disregarding case deadlines and court procedures, including briefing deadlines, page limits and formalities pertaining to evidentiary submissions; filing frivolous and untimely motions intending to distract from the real issues; attempting to re-brief and re-argue settled issues as well as introduce evidence at trial that had been specifically excluded by the court; making improper, substantive modifications to proposed jury instructions; intentionally violating the court’s ruling in statements made during the defendants’ opening statement; and repeatedly attempting to elicit improper testimony during the trial.[1] As SDCC stated, the litigation misconduct was “staggering,” and the district court agreed, directing the defendants to pay $3.9 million in addition to the jury-award damages, which included $3.77 million in attorney fees and $212,000 in expert witness costs. The defendants appealed, and the Ninth Circuit affirmed in part and vacated in part.

On April 20, 2020, the Ninth Circuit affirmed the district court in part and determined that the defendants’ evidence was insufficient to support the argument that “Comic Con” was generic before SDCC’s first use and the district court properly granted summary judgment. As such, the Ninth Circuit did not reach the question of whether a “generic ab initio” theory of liability is cognizable. And again affirming the district court, the Ninth Circuit found the district court did not abuse its discretion in finding no wrongfulness, willfulness, bad faith or gross negligence on the part of SDCC in registering the marks at issue.

As to attorney fees, the Ninth Circuit affirmed the district court’s award of reasonable attorney fees but vacated the portion of the judgment awarding SDCC non-taxable costs for expert witnesses, about $212,000. Namely, the district court did not abuse its discretion in deeming this case “exceptional” given the defendant’s unreasonableness throughout the case. As a result, SDCC was forced to expend unnecessary legal fees and the court was compelled to waste judicial resources such that the award of attorney fees was reasonable. However, the Ninth Circuit vacated and remanded the portion of the district court’s award for non-taxable costs, finding the Lanham Act does not provide awards of litigation expenses beyond the six categories of costs specified in the general costs statute.[2]

Taft Takeaways: 

• Strong evidence is required in order to show a mark was generic from its inception, and token articles pre-dating the mark are not enough. A challenger must demonstrate that the primary significance of the term was used to refer to its related goods and services in general before the mark’s purported first use in commerce.
• No matter the exceptionality of a case, unless the prevailing party is seeking one of the six categories of costs specified in the general costs statute, the prevailing party is limited to attorney fees and damages at the court’s discretion.
• Work hard to win your case but comply with the court’s rules and the governing federal rules, otherwise, you may find yourself paying millions of dollars in attorney fees in addition to any damages award.

[1] This is a non-exhaustive list.

[2] 28 U.S.C. § 1821 is a general statute that provides for reimbursement of a witness’ per diem and mileage expenses. 28 U.S.C. § 1920 provides for costs with respect to the following categories: (1) fees of the clerk and marshal; (2) fees for printed or electronically recorded transcripts necessarily obtained for use in the case; (3) fees and disbursements for printing and witnesses; (4) fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case; (5) docket fees under section 1923 of this title; (6) compensation of court-appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.