U.S. 4th Circuit Court of Appeals
PETA v DOUGHNEY
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
People for the Ethical Treatment of Animals,
Plaintiff - Appellee,
Michael T. Doughney, an individual,
Filed: September 6, 2001
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
People for the Ethical Treatment of Animals,
Plaintiff - Appellee,
Michael T. Doughney, an individual,
Argued: May 7, 2001
Decided: August 23, 2001
Before MICHAEL and GREGORY, Circuit Judges, and
Benson E. LEGG, United States District Judge for the
District of Maryland, sitting by designation.
Affirmed by published opinion. Judge Gregory wrote the opinion, in
which Judges Michael and Legg joined.
ARGUED: G. Gervaise Davis, III, DAVIS & SCHROEDER,
P.C., Monterey, California, for Appellant. Philip Jay Hirschkop,
HIRSCHKOP & ASSOCIATES, P.C., Alexandria, Virginia, for
Appellee. ON BRIEF: Eric Bakri Boustani, DAVIS &
SCHROEDER, P.C., Monterey, California; Richard T. Rossier, Kathryn A. Kleiman, MCLEOD, WATKINSON & MILLER, Washington,
D.C., for Appellant. Marianne R. Merritt, HIRSCHKOP & ASSOCIATES, P.C., Alexandria, Virginia, for Appellee. Diane Cabell,
HARVARD LAW SCHOOL, Cambridge, Massachusetts; Dr. Milton
Mueller, Center for Science and Technology, SYRACUSE UNIVERSITY, Syracuse, New York, Amici Curiae Pro Se.
GREGORY, Circuit Judge:
People for the Ethical Treatment of Animals ("PETA") sued
Michael Doughney ("Doughney") after he registered the domain
name peta.org and created a website called "People Eating Tasty Animals." PETA alleged claims of service mark infringement under 15
U.S.C. § 1114 and Virginia common law, unfair competition under 15
U.S.C. § 1125(a) and Virginia common law, and service mark dilution and cybersquatting under 15 U.S.C. § 1123(c). Doughney appeals
the district court's decision granting PETA's motion for summary
judgment and PETA cross-appeals the district court's denial of its
motion for attorney's fees and costs. Finding no error, we affirm.
PETA is an animal rights organization with more than 600,000
members worldwide. PETA "is dedicated to promoting and heightening public awareness of animal protection issues and it opposes the
exploitation of animals for food, clothing, entertainment and vivisection." Appellee/Cross-Appellant PETA's Brief at 7.
Doughney is a former internet executive who has registered many
domain names since 1995. For example, Doughney registered domain
names such as dubyadot.com, dubyadot.net, deathbush.com, RandallTerry.org (Not Randall Terry for Congress), bwtel.com (BaltimoreWashington Telephone Company), pmrc.org ("People's Manic
Repressive Church"), and ex-cult.org (Ex-Cult Archive). At the time
the district court issued its summary judgment ruling, Doughney
owned 50-60 domain names.
Doughney registered the domain name peta.org in 1995 with Network Solutions, Inc. ("NSI"). When registering the domain name,
Doughney represented to NSI that the registration did "not interfere
with or infringe upon the rights of any third party," and that a "nonprofit educational organization" called "People Eating Tasty Animals"
was registering the domain name. Doughney made these representations to NSI despite knowing that no corporation, partnership, organization or entity of any kind existed or traded under that name.
Moreover, Doughney was familiar with PETA and its beliefs and had
been for at least 15 years before registering the domain name.
After registering the peta.org domain name, Doughney used it to
create a website purportedly on behalf of "People Eating Tasty Animals." Doughney claims he created the website as a parody of PETA.
A viewer accessing the website would see the title "People Eating
Tasty Animals" in large, bold type. Under the title, the viewer would
see a statement that the website was a "resource for those who enjoy
eating meat, wearing fur and leather, hunting, and the fruits of scientific research." The website contained links to various meat, fur,
leather, hunting, animal research, and other organizations, all of
which held views generally antithetical to PETA's views. Another
statement on the website asked the viewer whether he/she was "Feeling lost? Offended? Perhaps you should, like, exit immediately." The
phrase "exit immediately" contained a hyperlink to PETA's official
Doughney's website appeared at "www.peta.org" for only six
months in 1995-96. In 1996, PETA asked Doughney to voluntarily
transfer the peta.org domain name to PETA because PETA owned the
"PETA" mark ("the Mark"), which it registered in 1992. See U.S.
Trademark Registration No. 1705,510. When Doughney refused to
transfer the domain name to PETA, PETA complained to NSI, whose
rules then required it to place the domain name on "hold" pending resolution of Doughney's dispute with PETA.1 Consequently, Doughney
moved the website to www.mtd.com/tasty and added a disclaimer stating that "People Eating Tasty Animals is in no way connected with,
or endorsed by, People for the Ethical Treatment of Animals."
In response to Doughney's domain name dispute with PETA, The
Chronicle of Philanthropy quoted Doughney as stating that, "[i]f they
[PETA] want one of my domains, they should make me an offer."
Non-Profit Groups Upset by Unauthorized Use of Their Names on the
Internet, THE CHRONICLE OF PHILANTHROPY, Nov. 14, 1996. Doughney
does not dispute making this statement. Additionally, Doughney
posted the following message on his website on May 12, 1996:
"PeTa" has no legal grounds whatsoever to make even the
slightest demands of me regarding this domain name registration. If they disagree, they can sue me. And if they don't,
well, perhaps they can behave like the polite ladies and gentlemen that they evidently aren't and negotiate a settlement
with me. . . . Otherwise, "PeTa" can wait until the significance and value of a domain name drops to nearly nothing,
which is inevitable as each new web search engine comes
on-line, because that's how long it's going to take for this
dispute to play out.
PETA sued Doughney in 1999, asserting claims for service mark
infringement, unfair competition, dilution and cybersquatting. PETA
did not seek damages, but sought only to enjoin Doughney's use of
1 When Doughney registered peta.org, he agreed to abide by NSI's
Dispute Resolution Policy, which specified that a domain name using a
third party's registered trademark was subject to placement on "hold"
the "PETA" Mark and an order requiring Doughney to transfer the
peta.org domain name to PETA.
Doughney responded to the suit by arguing that the website was a
constitutionally-protected parody of PETA. Nonetheless, the district
court granted PETA's motion for summary judgment on June 12,
2000. People for the Ethical Treatment of Animals, Inc. v. Doughney,
113 F. Supp.2d 915 (E.D. Va. 2000). The district court rejected
Doughney's parody defense, explaining that
[o]nly after arriving at the "PETA.ORG" web site could the
web site browser determine that this was not a web site
owned, controlled or sponsored by PETA. Therefore, the
two images: (1) the famous PETA name and (2) the "People
Eating Tasty Animals" website was not a parody because
[they were not] simultaneous.
Id. at 921.
PETA subsequently moved for attorney fees and costs. The district
court denied the motion, finding that the case was not "exceptional"
under 15 U.S.C. § 1117. PETA moved to reconsider in part, arguing
that it was entitled to "costs of the action" and attaching a statement
for filing fees, photocopying, facsimiles, courier services, postage,
travel, mileage, tolls, parking, long distance telephone calls, "services," transcripts, computer research, "miscellaneous" expenses, and
witness fees and mileage. The district court ruled on September 15,
2000, stating that
Plaintiff has submitted to the Court what it asserts is an
itemization of its expenses without providing any supporting
documentation or legal analysis of why these expenses are
"costs of the action" within the meaning of 15 U.S.C.
§ 1117(a) and 28 U.S.C. § 1920. Defendant challenges
Plaintiff's expenses as excessive. It appears to the Court that
many of Plaintiff's expenses are for mere "trial preparation,"
and not recoverable as costs.
For those reasons it is hereby,
ORDERED that Plaintiff's Motion for Reconsideration
and/or Clarification is DENIED except that Plaintiff shall be
awarded those costs routinely taxed by the Clerk. Plaintiff
shall not receive as costs mere trial preparation expenses.
Plaintiff shall submit a Bill of Costs to the Clerk of the
People for the Ethical Treatment of Animals, Inc. v. Doughney, Civil
Action No. 99-1336-A, Order (E.D. Va. Sept. 15, 2000).
We review a district court's summary judgment ruling de novo,
viewing the evidence in the light most favorable to the non-moving
party. Goldstein v. The Chestnut Ridge Volunteer Fire Co., 218 F.3d
337, 340 (4th Cir. 2000); Binakonsky v. Ford Motor Co., 133 F.3d
281, 284-85 (4th Cir. 1998). Summary judgment is appropriate if "the
pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled to
judgment as a matter of law." Fed. R. Civ. P. 56.
A. Trademark Infringement/Unfair Competition
A plaintiff alleging causes of action for trademark infringement
and unfair competition must prove (1) that it possesses a mark; (2)
that the defendant used the mark; (3) that the defendant's use of the
mark occurred "in commerce"; (4) that the defendant used the mark
"in connection with the sale, offering for sale, distribution, or advertising" of goods or services; and (5) that the defendant used the mark
in a manner likely to confuse consumers. 15 U.S.C. §§ 1114, 1125(a);
Lone Star Steakhouse & Saloon v. Alpha of Virginia, 43 F.3d 922,
930 (4th Cir. 1995).2
2 See also Lone Star Steakhouse & Saloon, 43 F.3d at 930 n.10 ("[t]he
test for trademark infringement and unfair competition under the Lanham
Act is essentially the same as that for common law unfair competition
under Virginia law . . . .").
There is no dispute here that PETA owns the "PETA" Mark, that
Doughney used it, and that Doughney used the Mark "in commerce."
Doughney disputes the district court's findings that he used the Mark
in connection with goods or services and that he used it in a manner
engendering a likelihood of confusion.
To use PETA's Mark "in connection with" goods or services,
Doughney need not have actually sold or advertised goods or services
on the www.peta.org website. Rather, Doughney need only have prevented users from obtaining or using PETA's goods or services, or
need only have connected the website to other's goods or services.
While sparse, existing caselaw on infringement and unfair competition in the Internet context clearly weighs in favor of this conclusion.
For example, in OBH, Inc. v. Spotlight Magazine, Inc., the plaintiffs
owned the "The Buffalo News" registered trademark used by the
newspaper of the same name. 86 F. Supp.2d 176 (W.D. N.Y. 2000).
The defendants registered the domain name thebuffalonews.com and
created a website parodying The Buffalo News and providing a public
forum for criticism of the newspaper. Id. at 182. The site contained
hyperlinks to other local news sources and a site owned by the defendants that advertised Buffalo-area apartments for rent. Id. at 183.
The court held that the defendants used the mark "in connection
with" goods or services because the defendants' website was "likely
to prevent or hinder Internet users from accessing plaintiffs' services
on plaintiffs' own web site." Id.
Prospective users of plaintiffs' services who mistakenly
access defendants' web site may fail to continue to search
for plaintiffs' web site due to confusion or frustration. Such
users, who are presumably looking for the news services
provided by the plaintiffs on their web site, may instead opt
to select one of the several other news-related hyperlinks
contained in defendants' web site. These news-related
hyperlinks will directly link the user to other news-related
web sites that are in direct competition with plaintiffs in providing news-related services over the Internet. Thus,
defen-dants' action in appropriating plaintiff's mark has a
connection to plaintiffs' distribution of its services.
Id. Moreover, the court explained that defendants' use of the plaintiffs' mark was in connection with goods or services because it contained a link to the defendants' apartment-guide website. Id.
Similarly, in Planned Parenthood Federation of America, Inc. v.
Bucci, the plaintiff owned the "Planned Parenthood" mark, but the
defendant registered the domain name plannedparenthood.com. 42
U.S.P.Q.2d 1430 (S.D.N.Y. 1997). Using the domain name, the
defendant created a website containing information antithetical to the
plaintiff's views. Id. at 1435. The court ruled that the defendant used
the plaintiff's mark "in connection with" the distribution of services
because it is likely to prevent some Internet users from
reaching plaintiff's own Internet web site. Prospective users
of plaintiff's services who mistakenly access defendant's
web site may fail to continue to search for plaintiff's own
home page, due to anger, frustration, or the belief that plaintiff's home page does not exist.
The same reasoning applies here. As the district court explained,
Doughney's use of PETA's Mark in the domain name of his website
is likely to prevent Internet users from reaching [PETA's]
own Internet web site. The prospective users of [PETA's]
services who mistakenly access Defendant's web site may
fail to continue to search for [PETA's] own home page, due
to anger, frustration, or the belief that [PETA's] home page
does not exist.
Doughney, 113 F. Supp.2d at 919 (quoting Bucci, 42 U.S. P.Q.2d at
1435). Moreover, Doughney's web site provides links to more than
30 commercial operations offering goods and services. By providing
links to these commercial operations, Doughney's use of PETA's
Mark is "in connection with" the sale of goods or services.
The unauthorized use of a trademark infringes the trademark holder's rights if it is likely to confuse an "ordinary consumer" as to the
source or sponsorship of the goods. Anheuser-Busch, Inc. v. L&L
Wings, Inc., 962 F.2d 316, 318 (4th Cir. 1992) (citing 2 J. McCarthy,
Trademarks and Unfair Competition § 23:28 (2d ed. 1984)). To determine whether a likelihood of confusion exists, a court should not consider "how closely a fragment of a given use duplicates the
trademark," but must instead consider "whether the use in its entirety
creates a likelihood of confusion." Id. at 319.
Doughney does not dispute that the peta.org domain name engenders a likelihood of confusion between his web site and PETA.
Doughney claims, though, that the inquiry should not end with his
domain name. Rather, he urges the Court to consider his website in
conjunction with the domain name because, together, they purportedly parody PETA and, thus, do not cause a likelihood of confusion.
A "parody" is defined as a "simple form of entertainment conveyed
by juxtaposing the irreverent representation of the trademark with the
idealized image created by the mark's owner." L.L. Bean, Inc. v.
Drake Publishers, Inc., 811 F.2d 26, 34 (1st Cir. 1987). A parody
must "convey two simultaneous -- and contradictory -- messages:
that it is the original, but also that it is not the original and is instead
a parody." Cliffs Notes, Inc. v. Bantam Doubleday Dell Publ. Group,
Inc., 886 F.2d 490, 494 (2d Cir. 1989) (emphasis in original). To the
extent that an alleged parody conveys only the first message, "it is not
only a poor parody but also vulnerable under trademark law, since the
customer will be confused." Id. While a parody necessarily must
engender some initial confusion, an effective parody will diminish the
risk of consumer confusion "by conveying [only] just enough of the
original design to allow the consumer to appreciate the point of parody." Jordache Enterprises, Inc. v. Hogg Wylde, Ltd., 828 F.2d 1482,
1486 (10th Cir. 1987).
Looking at Doughney's domain name alone, there is no suggestion
of a parody. The domain name peta.org simply copies PETA's Mark,
conveying the message that it is related to PETA. The domain name
does not convey the second, contradictory message needed to estab-lish a parody -- a message that the domain name is not related to
PETA, but that it is a parody of PETA.
Doughney claims that this second message can be found in the content of his website. Indeed, the website's content makes it clear that
it is not related to PETA. However, this second message is not conveyed simultaneously with the first message, as required to be considered a parody. The domain name conveys the first message; the
second message is conveyed only when the viewer reads the content
of the website. As the district court explained,"an internet user would
not realize that they were not on an official PETA web site until after
they had used PETA's Mark to access the web page`www.peta.org.'"
Doughney, 113 F. Supp.2d at 921. Thus, the messages are not conveyed simultaneously and do not constitute a parody. See also Morri-
son & Foerster LLP v. Wick, 94 F. Supp.2d 1125 (D. Co. 2000)
(defendant's use of plaintiffs' mark in domain name "does not convey
two simultaneous and contradictory messages" because "[o]nly by
reading through the content of the sites could the user discover that
the domain names are an attempt at parody"); Bucci, 42 U.S.P.Q.2d
at 1435 (rejecting parody defense because "[s]eeing or typing the
`planned parenthood' mark and accessing the web site are two separate and nonsimultaneous activities"). The district court properly
rejected Doughney's parody defense and found that Doughney's use
of the peta.org domain name engenders a likelihood of confusion.
Accordingly, Doughney failed to raise a genuine issue of material fact
regarding PETA's infringement and unfair competition claims.
B. Anticybersquatting Consumer Protection Act
The district court found Doughney liable under the Anticybersquatting Consumer Protection Act ("ACPA"), 15 U.S.C. § 1125(d)(1)(A).
To establish an ACPA violation, PETA was required to (1) prove that
Doughney had a bad faith intent to profit from using the peta.org
domain name, and (2) that the peta.org domain name is identical or
confusingly similar to, or dilutive of, the distinctive and famous
PETA Mark. 15 U.S.C. § 1125(d)(1)(A).
Doughney makes several arguments relating to the district court's
ACPA holding: (1) that PETA did not plead an ACPA claim, but
raised it for the first time in its motion for summary judgment; (2) that
the ACPA, which became effective in 1999, cannot be applied retroactively to events that occurred in 1995 and 1996; (3) that Doughney
did not seek to financially profit from his use of PETA's Mark; and
(4) that Doughney acted in good faith.
None of Doughney's arguments are availing. First, PETA raised its
ACPA claim for the first time in its summary judgment briefs.
Doughney objected, noting that PETA failed to plead the claim in its
complaint and failed to seek leave to amend to do so. Doughney also
vigorously defended against the claim. PETA acknowledged below
that it did not plead the claim, but "respectfully request[ed]" in its
summary judgment reply brief "that th[e district] Court apply the [the
ACPA] to the case at bar[.]" Nothing in the record suggests that the
district court entered an order amending PETA's complaint to include
an ACPA claim. However, the district court appears to have ruled on
PETA's informal motion, listing the ACPA in its summary judgment
order as one of the claims on which PETA seeks summary judgment
and rendering judgment as to that claim.
The Federal Rules "allow liberal amendment of pleadings throughout the progress of a case." Elmore v. Corcoran, 913 F.2d 170, 172
(4th Cir. 1990) (citing Brandon v. Holt, 469 U.S. 464, 471 (1985)
(petitioners allowed to amend pleadings before Supreme Court)). A
party's failure to amend will not affect a final judgment if the issues
resolved were "tried by express or implied consent of the parties." Id.
(citing Fed. R. Civ. P. 15(b)). Even without a formal amendment, "a
district court may amend the pleadings merely by entering findings on
the unpleaded issues." Id. (quoting Galindo v. Stoody Co., 793 F.2d
1502, 1513 n. 8 (9th Cir. 1986)).
Here, PETA's summary judgment briefs essentially moved the district court for leave to amend its complaint to include an ACPA claim,
and the district court appears to have granted that motion via its summary judgment ruling. While the record would have been clearer had
PETA formally filed such a motion and the district court formally
entered such an order, they did so in substance if not in form. Thus,
we reject Doughney's first contention.
Doughney's second argument -- that the ACPA may not be
applied retroactively -- also is unavailing. The ACPA expressly
states that it "shall apply to all domain names registered before, on,
or after the date of the enactment of this Act[.]" Pub. L. No. 106-113,
§ 3010, 113 Stat. 1536. See also Sporty's Farm L.L.C. v. Sportsman's
Market, Inc., 202 F.3d 489, 496 (2d Cir. 2000) (same). Moreover,
while the ACPA precludes the imposition of damages in cases in
which domain names were registered, trafficked, or used before its
enactment, Pub. L. No. 106-113, § 3010, 113 Stat. 1536 ("damages
under subsection (a) or (d) of section 35 of the Trademark Act of
1946 (15 U.S.C. 1117), . . . shall not be available with respect to the
registration, trafficking, or use of a domain name that occurs before
the date of the enactment of this Act"), it does not preclude the imposition of equitable remedies. See also Virtual Networks, Inc. v. Volks-
wagen of America, Inc., 238 F.3d 264, 268 (4th Cir. 2001). Here, the
district court did not award PETA damages (nor did PETA request
damages), but ordered Doughney to relinquish the domain name,
transfer its registration to PETA, and limit his use of domain names
to those that do not use PETA's Mark. Doughney, 113 F. Supp.2d at
922. Thus, the district court properly applied the ACPA to this case.
Doughney's third argument -- that he did not seek to financially
profit from registering a domain name using PETA's Mark -- also
offers him no relief. It is undisputed that Doughney made statements
to the press and on his website recommending that PETA attempt to
"settle" with him and "make him an offer." The undisputed evidence
belies Doughney's argument.
Doughney's fourth argument -- that he did not act in bad faith -also is unavailing. Under 15 U.S.C. § 1125(d)(1)(B)(i), a court may
consider several factors to determine whether a defendant acted in bad
(I) the trademark or other intellectual property rights of the
person, if any, in the domain name;
(II) the extent to which the domain name consists of the
legal name of the person or a name that is otherwise commonly used to identify that person;
(III) the person's prior use, if any, of the domain name in
connection with the bona fide offering of any goods or services;
(IV) the person's bona fide noncommercial or fair use of the
mark in a site accessible under the domain name;
(V) the person's intent to divert consumers from the mark
owner's online location to a site accessible under the
domain name that could harm the goodwill represented by
the mark, either for commercial gain or with the intent to
tarnish or disparage the mark, by creating a likelihood of
confusion as to the source, sponsorship, affiliation, or
endorsement of the site;
(VI) the person's offer to transfer, sell, or otherwise assign
the domain name to the mark owner or any third party for
financial gain without having used, or having an intent to
use, the domain name in the bona fide offering of any goods
or services, or the person's prior conduct indicating a pattern
of such conduct;
(VII) the person's provision of material and misleading false
contact information when applying for the registration of the
domain name, the person's intentional failure to maintain
accurate contact information, or the person's prior conduct
indicating a pattern of such conduct;
(VIII) the person's registration or acquisition of multiple
domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the
time of registration of such domain names, or dilutive of
famous marks of others that are famous at the time of registration of such domain names, without regard to the goods
or services of the parties; and
(IX) the extent to which the mark incorporated in the person's domain name registration is or is not distinctive and
famous within the meaning of subsection (c)(1) of this section.
15 U.S.C. § 1125(d)(1)(B)(i). In addition to listing these nine factors,
the ACPA contains a safe harbor provision stating that bad faith intent
"shall not be found in any case in which the court determines that the
person believed and had reasonable grounds to believe that the use of
the domain name was fair use or otherwise lawful." 15 U.S.C.
The district court reviewed the factors listed in the statute and
properly concluded that Doughney (I) had no intellectual property
right in peta.org; (II) peta.org is not Doughney's name or a name otherwise used to identify Doughney; (III) Doughney had no prior use
of peta.org in connection with the bona fide offering of any goods or
services; (IV) Doughney used the PETA Mark in a commercial manner; (V) Doughney "clearly intended to confuse, mislead and divert
internet users into accessing his web site which contained information
antithetical and therefore harmful to the goodwill represented by the
PETA Mark"; (VI) Doughney made statements on his web site and
in the press recommending that PETA attempt to "settle" with him
and "make him an offer"; (VII) Doughney made false statements
when registering the domain name; and (VIII) Doughney registered
other domain names that are identical or similar to the marks or
names of other famous people and organizations. People for the Ethi-
cal Treatment of Animals, 113 F. Supp.2d at 920.
Doughney claims that the district court's later ruling denying
PETA's motion for attorney fees triggers application of the ACPA's
safe harbor provision. In that ruling, the district court stated that
Doughney registered the domain name because he thought
that he had a legitimate First Amendment right to express
himself this way. The Court must consider Doughney's state
of mind at the time he took the actions in question. Doughney thought he was within his First Amendment rights to
create a parody of the plaintiff's organization.
People for the Ethical Treatment of Animals, Inc. v. Doughney, Civil
Action No. 99-1336-A, Order at 4 (E.D. Va. Aug. 31, 2000). With its
attorney's fee ruling, the district court did not find that Doughney
"had reasonable grounds to believe" that his use of PETA's Mark was
lawful. It held only that Doughney thought it to be lawful.
Moreover, a defendant "who acts even partially in bad faith in registering a domain name is not, as a matter of law, entitled to benefit
from [the ACPA's] safe harbor provision." Virtual Works, Inc., 238
F.3d at 270. Doughney knowingly provided false information to NSI
upon registering the domain name, knew he was registering a domain
name identical to PETA's Mark, and clearly intended to confuse
Internet users into accessing his website, instead of PETA's official
website. Considering the evidence of Doughney's bad faith, the safe
harbor provision can provide him no relief.
A. Attorney Fees
This Court reviews the denial of an award for attorney fees for
abuse of discretion. Shell Oil Co. v. Commercial Petroleum, Inc., 928
F.2d 104, 108 n.6 (4th Cir. 1991). A trial court abuses its discretion
only if its conclusions are based on mistaken legal principles or
clearly erroneous factual findings. Westberry v. Gislaved Gummi AB,
178 F.3d 257, 261 (4th Cir. 1999).
In trademark infringement cases, the Court may award reasonable
attorney fees in exceptional cases. Under 15 U.S.C. § 1117(a), a case
is "exceptional" if the defendant's conduct was "malicious, fraudulent, willful or deliberate in nature." Scotch Whisky Ass'n v. Majestic
Drilling Co., Inc., 958 F.2d 594, 599 (4th Cir. 1991). In other words,
a prevailing plaintiff must "show that the defendant acted in bad
faith." Id. See also Texas Pig Stands v. Hard Rock Cafe Int'l, Inc.,
951 F.2d 684, 697 (5th Cir. 1992) (the term "exceptional" should be
"interpreted by courts to require a showing of a high degree of culpability on the part of the infringer, for example, bad faith or fraud").
PETA sought attorney fees of more than $276,000. The district
court denied the motion, holding that Doughney did not act maliciously, fraudulently, willfully or deliberately because "he thought
that he had a legitimate First Amendment right to express himself this
way" and "to create a parody of the plaintiff's organization." PETA
claims the district court's decision is inconsistent with its bad faith
finding under the ACPA, and argues that Doughney's conduct established bad faith.
However, a bad faith finding under the ACPA does not compel a
finding of malicious, fraudulent, willful or deliberate behavior under
§ 1117. The district court was within its discretion to find that, even
though Doughney violated the ACPA (and, thus, acted in bad faith),
he did not act with the level of malicious, fraudulent, willful or deliberate behavior necessary for an award of attorney fees.
PETA also sought to recover $28,671.68 for the costs of filing fees,
photocopying, facsimiles, courier services, postage, attorney travel,
mileage, tolls and parking, long distance telephone calls, "services",
witness fees and mileage, transcripts, computer research, and "miscellaneous" items. Under 15 U.S.C. § 1117, a prevailing plaintiff "shall
be entitled . . . to recover . . . the cost of the action." The term "costs
of the action" is not defined by the Lanham Act. The district court
interpreted the term to mean that PETA was entitled to those costs
defined in 28 U.S.C. § 1920, which states that
[a] judge or clerk of any court of the United States may tax
as costs the following:
(1) Fees of the clerk and marshal;
(2) Fees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case;
(3) Fees and disbursements for printing and witnesses;
(4) Fees for exemplification and copies of papers 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.
PETA claims that 15 U.S.C. § 1117 "does not incorporate nor reference the limitations set forth in § 1920" and that "the fact that a sep-
arate statute was passed to expansively award `costs of the action' in
trademark cases indicates that it is a statute that is to be considered
separate and apart from the traditional costs statute." Appellee/CrossAppellant PETA's Reply Br. at 26 (emphasis in original).
However, the term "costs of the action" is not unique to the Lanham Act. Identical language appears in the Real Estate Settlement
Procedures Act, 12 U.S.C. § 2607(d)(2) ("In any successful action to
enforce the liability under this paragraph, the court may award the
court costs of the action together with a reasonable attorney's fee as
determined by the court"), ERISA, 29 U.S.C. § 1132(g)(2) ("the court
shall award the plan" . . . "reasonable attorney's fees and costs of the
action" if the action results in a "judgment in favor of the plan"), the
Fair Labor Standards Act, 29 U.S.C. § 216(b) (providing for "reasonable attorney's fees . . . and the costs of the action"), the Right to
Financial Privacy Act, 12 U.S.C. § 3417 (same), the Expedited Funds
Availability Act, 12 U.S.C. § 4010 (same), the Truth in Savings Act,
12 U.S.C. § 4310 (same), and other statutes. Moreover, at least two
Circuit Courts have held that the term "costs of the action" must be
interpreted with reference to 28 U.S.C. § 1920. See, e.g., Uphoff v.
Elegant Bath, LTD, 176 F.3d 399, 411 (7th Cir. 1999) (interpreting
Fair Labor Standard Act 29 U.S.C. § 216(b)'s"costs of the action"
with reference to § 1920); Agrendo v. Mutual of Omaha Cos., 75 F.3d
541, 544 (9th Cir. 1996) ("We therefore hold that[Employment
Retirement Income Security Act 29 U.S.C. § 1132's] allowance for
`costs of action' empowers courts to award only the types of `costs'
allowed by 28 U.S.C. § 1920").
Moreover, we need not determine now whether the "costs of the
action" referenced in § 1117 are limited to those mentioned in § 1920
because the "award of monetary damages, attorney fees and costs
under the Lanham Act is committed to the sound discretion of the
Court, based on the equities of each particular case." Dick's Sporting
Goods, Inc. v. Dick's Clothing & Sporting Goods, Inc., 12 F. Supp.2d
499, 500 (D.Md. 1998), aff'd, 188 F.3d 501 (4th Cir. 1999). The district court was required to award PETA, as the prevailing party, no
more than those costs required by § 1920. Any additional award of
costs was within its sound discretion and PETA fails to make a compelling argument establishing that the district court abused its discretion in refusing to do so.
For the foregoing reasons, the judgment of the district court is
3 Because a finding of trademark infringement, unfair competition, and
an ACPA violation supports the remedy PETA sought, we need not
address PETA's dilution claim.