Nutrivita Laboratories, Inc. v. Vbs Distribution, Inc.

FILED
NOT FOR PUBLICATION
SEP 22 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
NUTRIVITA LABORATORIES, INC., a No. 16-55329
California corporation,
D.C. No.
Plaintiff-Appellee, 8:13-cv-01635-CJC-DFM
v.
MEMORANDUM*
VBS DISTRIBUTION, INC., a California
corporation and JOSEPH C. NGUYEN, an
individual,
Defendants-Appellants.
Appeal from the United States District Court
for the Central District of California
Cormac J. Carney, District Judge, Presiding
Submitted August 29, 2017**
Pasadena, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before: W. FLETCHER and IKUTA, Circuit Judges, and FREUDENTHAL,***
Chief District Judge.
VBS Distribution, Inc. and Joseph Nguyen (collectively, VBS) appeal the
district court’s order denying VBS’s motion for attorneys’ fees. We have
jurisdiction under 28 U.S.C. § 1291, and we affirm.
The district court did not abuse its discretion in concluding that this case did
not stand out as an exceptional case warranting an award of attorneys’ fees under
the Lanham Act, 15 U.S.C. § 1117(a). See SunEarth, Inc. v. Sun Earth Solar
Power Co., 839 F.3d 1179, 1180 (9th Cir. 2016) (en banc) (per curiam) (citing
Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756
(2014)).1 The district court properly considered the nonexclusive factors identified
in Octane Fitness, 134 S. Ct. at 1756 & n.6. It did not abuse its discretion in
concluding that Nutrivita’s trade dress claim was not frivolous or objectively
unreasonable given VBS’s statement that it would continue selling JN-7 Best
***
The Honorable Nancy Freudenthal, Chief United States District Judge
for the District of Wyoming, sitting by designation.
1
The district court denied VBS’s motion for attorneys’ fees before our en
banc decision in SunEarth, Inc., 839 F.3d at 1181, in which we held that the
Supreme Court’s decision regarding the meaning of an “exceptional case” under
the Patent Act in Octane Fitness, 134 S. Ct. 1749, applies to the fee shifting
provision of the Lanham Act as well. However, the district court held that if
Octane Fitness’s rule applied, “it would determine that this case does not ‘stand
out’” as an exceptional case warranting the award of attorneys’ fees.
2
bottles, which used labels that allegedly infringed Nutrivita’s Arthro-7 product.
Nor did the district court clearly err in determining that VBS’s JN-7 Best
trademark was similar enough to Nutrivita’s Arthro-7 trademark to raise debatable
issues, or that Nutrivita’s willingness to grant continuances and ultimately to drop
its claims weighed against a finding of bad faith. Id.2
The district court did not abuse its discretion in concluding that the factors
set forth in Maljack Prods., Inc. v. GoodTimes Home Video Corp., 81 F.3d 881,
889 (9th Cir. 1996), weighed against awarding attorneys’ fees under the Copyright
Act, 17 U.S.C. § 505. The district court properly considered all of the factors
identified in Maljack. It did not clearly err in determining that the degree of
success, motivation, and deterrence and compensation factors weighed against
awarding attorneys’ fees, given that Nutrivita withdrew its claims only in response
to VBS’s agreement to change its JN-7 Best labeling and advertising, there was no
evidence in the record to support a finding of bad faith, and Nutrivita’s complaint
as a whole was meritorious and led VBS to change its product packaging and
2
VBS failed to raise its argument that Nutrivita lacked standing to sue in its
motion for attorneys’ fees or its memorandum of law in support of its motion
before the district court. VBS also failed to raise its argument that it is entitled to
attorneys’ fees based on Nutrivita’s trademark dilution claim. Therefore, these
arguments are waived. See Hillis v. Heineman, 626 F.3d 1014, 1019 (9th Cir.
2010).
3
advertising. Id. We reject VBS’s argument that the district court abused its
discretion by not awarding attorneys’ fees because Nutrivita failed to register its
copyright. It is an open question whether Nutrivita could have remedied the failure
to register its copyright by applying for registration after filing suit. Cf. Cosmetic
Ideas, Inc. v. IAC/Interactivecorp., 606 F.3d 612, 619–21 (9th Cir. 2010).
AFFIRMED.
4