Intellectual Property Law

Trademark Claim Winner Not a Prevailing Party Against Association

By Michael Atkins

Even though MONY Life Ins. Co. prevailed in its counterclaim to cancel Van Well Nursery, Inc.’s trademark registration, on March 10 the Eastern District of Washington found it was not a prevailing party in its third party action against the National Licensing Association, of which Van Well Nursery is a member. Since it was not a prevailing party, the court found it necessarily could not establish its case was “exceptional” for attorney’s fees purposes. (Previous STL coverage here.)

For background purposes, in May 2004 the NLA brought suit in the Eastern District against MONY and others alleging trademark and patent infringement. However, the court dismissed NLA’s complaint without prejudice based on NLA’s lack of standing and the court’s lack of subject matter jurisdiction.

In July 2004, Van Well Nursery and Hilltop Nurseries brought suit in the Eastern District against MONY and others, repeating the claims the NLA had previously asserted. In a counterclaim, MONY sought to cancel Van Well Nursery’s SCARLET SPUR registration for apple trees. MONY also asserted third-party claims against the NLA for misuse of trademark statutes, among other things.

In March 2006, Judge Lonny Suko granted MONY’s motion for summary judgment, finding as a matter of law that SCARLET SPUR was generic. As a result, the court ordered the registration cancelled.

In February 2007, Van Well, Hilltop, and MONY settled their differences and stipulated that all claims and counterclaims between them be dismissed with prejudice and without attorney’s fees or costs awarded to any party. The court then entered an order to that effect, leaving only MONY’s third-party claims against the NLA, which remain pending today.

In January 2008, MONY moved for an order finding its claim against the NLA constitutes an “exceptional case” entitling it to an award of attorney’s fees. The court found the threshold issue was whether MONY could be considered a “prevailing party” vis-a-vis the NLA, when the NLA was not a named party with regard to the trademark and patent infringement claims asserted by Van Well and Hilltop.

The court concluded it could not:

“Despite the fact that NLA was ‘pulling the strings’ and ‘working behind the scenes’ in the lawsuit brought by Van Well and Hilltop against MONY, the fundamental stumbling block is the fact that NLA was not a party to that lawsuit. To be a ‘prevailing party,’ one must receive some relief on the merits ‘which alters the legal relationship of the parties.’ The court cannot say that NLA was effectively a real party in interest in the claims asserted by Van Well and Hilltop against MONY [in the instant case] because to do so would be contrary to the court’s finding in [the previously-dismissed case] that NLA did not have standing to pursue those very same claims. MONY has effectively realized this by filing third-party claims against the NLA, thereby making NLA a party to those particular claims which, as noted, have yet to be adjudicated.”

The case cite is Van Well Nursery, Inc. v. MONY Life Ins. Co., No. 04-245 (E.D. Wash. March 10, 2008) (Suko, J.).

Full post as published by Seattle Trademark Lawyer on March 11, 2008 (boomark / email).