JCW Investments Inc v. Novelty Incorporated

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 05-2498
JCW INVESTMENTS, INC., D/B/A TEKKY TOYS,
Plaintiff-Appellee,
v.
NOVELTY, INC.,
Defendant-Appellant.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 02 C 4950—Robert W. Gettleman, Judge.
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SUBMITTED SEPTEMBER 7, 2007—DECIDED NOVEMBER 28, 2007
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Before MANION, WOOD, and EVANS, Circuit Judges.
WOOD, Circuit Judge. Tekky Toys won a jury verdict
for $575,099.82 on its claim that Novelty, Inc., infringed
Tekky’s copyright and trademark on “Pull My Finger
Fred,” a farting plush doll; this court affirmed that judg-
ment. See JCW Invs., Inc. v. Novelty, Inc., 482 F.3d 910,
921 (7th Cir. 2007). Thirty days after we entered judg-
ment in Tekky’s favor, it filed a petition for attorneys’
fees, expenses, and costs in the district court. What is
presently before us is the petition Tekky filed in this court
for an award of appellate attorneys’ fees, expenses, and
costs in the amount of $78,037.76.
2 No. 05-2498
Both the Copyright Act, 17 U.S.C. § 505, and the
Lanham Act, 15 U.S.C. § 1117(a), permit an award of full
costs and reasonable attorneys’ fees to the prevailing
party, including fees and costs incurred on appeal. See
Assessment Technologies of Wis., LLC v. WIREdata Inc.,
361 F.3d 434, 436 (7th Cir. 2004) (Copyright Act);
Gorenstein Enters., Inc. v. Quality Care-USA, Inc., 874
F.2d 431, 438 (7th Cir. 1989) (Lanham Act). Despite
this general rule, Novelty argues that Tekky is not en-
titled to an award of appellate fees and costs for three
reasons. First, it points out that the petition “does not
appear to be timely.” JCW filed its petition for fees
and costs 30 days after final judgment in this case was
entered. The request for costs is indeed untimely, as
Federal Rule of Appellate Procedure 39(d)(1) requires
that the bill of costs be filed within 14 days of entry of
judgment. We therefore deny Tekky’s petition for costs
in the amount of $132.76.
This leaves the question (presumably of much greater
interest to the parties) of whether the request for $77,905
in attorneys’ fees is also untimely. Novelty argues that
because Tekky submitted a “combined motion” for fees
and costs, Rule 39(d)(1)’s 14-day deadline should apply
to the motion in its entirety. But Novelty cites no author-
ity to support that position, and we have been unable to
find any. Likewise unsupported is Novelty’s contention
that Federal Rule of Civil Procedure 54(d), which pro-
vides the vehicle and deadline (also 14 days) for motions
for attorneys’ fees in the district court, should apply by
analogy to such motions in the appellate courts. Neither
Rule 39 nor Rule 54 speaks directly to the situation be-
fore us, and neither the Copyright Act nor the Lanham
Act provides any statutory deadline for such motions.
In the absence of a statutory or rule-based deadline, we
think that a general rule of diligence should govern. Here,
then, we must decide whether Tekky was diligent in
No. 05-2498 3
preparing and submitting its request for attorneys’ fees
to us. We conclude that it was.
Novelty’s next argument is that an award of fees is
unwarranted because its appeal was not frivolous. But a
finding of frivolity or bad faith is not required under the
Copyright Act, which permits an award of attorneys’
fees and costs in the court’s discretion. 17 U.S.C. § 505.
That discretion is guided by many factors, including
“frivolousness, motivation, objective unreasonableness
(both in the factual and in the legal components of the
case) and the need in particular circumstances to ad-
vance considerations of compensation and deterrence.”
Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994)
(internal quotation omitted). We have said that the two
most important considerations are “the strength of the
prevailing party’s case and the amount of damages or
other relief the party obtained.” Assessment Technologies,
361 F.3d at 436; see also Gonzales v. Transfer Technolo-
gies, Inc., 301 F.3d 608, 610 (7th Cir. 2002). The
amount of damages Tekky has recovered in this litiga-
tion is not small: the jury awarded a total of $291,000 on
Tekky’s various claims, and the district court awarded
$575,099.82 in attorneys’ fees, which covered most of the
expense of the district court litigation. When “a plaintiff
wins a suit and is entitled by statute to a reasonable
attorneys’ fee, the entitlement extends to the fee he
reasonably incurs in defending the award of that fee.
Otherwise the fee will undercompensate.” Gorenstein
Enters., 874 F.2d at 438 (internal citation omitted). The
strength of Tekky’s case against Novelty weighs heavily
in favor of awarding fees, as the copyright infringement
in this case was flagrant, see JCW Invs., 482 F.3d at
916-17, and the trademark infringement was willful, see
BASF Corp. v. Old World Trading Co., Inc., 41 F.3d 1081,
1099 (7th Cir. 1994) (interpreting Lanham Act’s allow-
ance of fees in “exceptional” cases to encompass those
4 No. 05-2498
in which the act of infringement was “malicious, fraudu-
lent, deliberate or willful”). Accordingly, we are persuaded
that Tekky is entitled to an award of the fees that it
reasonably incurred in defending against Novelty’s appeal.
This brings us to the third and final question: whether
the amount Tekky seeks is reasonable. Novelty pre-
dictably asserts that it is not, but it does not explain
whether it objects to the hourly rate, the number of
hours expended on particular tasks, or both. Having
reviewed the records ourselves, we conclude that one
category of the requested fees is indeed excessive, and so
we will reduce it even without an explicit request from
Novelty to do so. Specifically, lead counsel claims that
it took him 33.25 hours to prepare this petition, at a rate
of $450 per hour, for a total of $14,962.50. The petition,
however, consisted only of a six-page argument, a three-
page affidavit, and several computer-generated billing
records. Because an experienced litigator should not
have required more than half that amount of time to
prepare such a document, we reduce the fee award of
$77,905 by $7,481.25.
To summarize, Tekky’s petition for costs is DENIED, and
Novelty is ORDERED to pay Tekky a total of $70,423.75
in attorneys’ fees.
It is so ordered.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—11-28-07