Unpublished Disposition, 857 F.2d 1478 (9th Cir. 1988)
Annotate this CaseLV INDUSTRIES, INC., Plaintiff-counter-defendant-Appellee,v.Louis VUITTON, S.A., Defendant-counter-claimant-Appellant.
No. 87-6446.
United States Court of Appeals, Ninth Circuit.
Submitted April 6, 1988* .Decided Aug. 31, 1988.
Before BROWNING, NELSON, and CANBY, Circuit Judges.
MEMORANDUM**
Appellant Louis Vuitton, S.A. appeals the district court's award to LV Industries, Inc. of attorney's fees under the Lanham Act. We vacate and remand for further findings.
This litigation arose out of Louis Vuitton's opposition to LV Industries' application to register its trademark "elle vie." After the parties failed to settle the opposition proceeding, LV Industries filed this complaint seeking a declaration that its mark and corporate name did not infringe Louis Vuitton's mark. Louis Vuitton responded with an answer and nine counterclaims alleging LV Industries' corporate name and its "elle vie" trademark constituted trademark infringement, false designation of origin, and unfair competition.
Just prior to trial, the parties entered into a consent decree awarding LV Industries substantially all the relief it sought and denying Louis Vuitton relief on its counterclaims. The decree expressly reserved the question of whether LV Industries was entitled to attorneys fees. LV Industries then moved for sanctions under Federal Rule of Civil Procedure 11 and for attorneys fees under section 35 of the Lanham Act.1 The court denied the motion for sanctions, but awarded fees in the requested amount of $45,041.25.
On appeal, Louis Vuitton argues the district court's findings in denying sanctions renders the fee award invalid as a matter of law.2 Although Rule 11 sanctions are not a prerequisite to awarding fees, and the standards applicable under the two provisions are not the same,3 there is an apparent inconsistency between the court's findings regarding fees and sanctions that cannot be reconciled with confidence.
We do not know what standard the court used to determine the case was "exceptional" for the purposes of awarding fees, or what circumstances the court relied upon to justify the award. Similarly, we cannot discern the basis for the court's decision not to award sanctions; we do not know, for example, what the court meant when it said, "I can understand their having gone into it to that extent"--which may be critical to understanding why the court denied sanctions but awarded fees.
We conclude that the present record does not provide an adequate basis for review of the award of fees under the Lanham Act, and remand to the district court for further findings. "Unless it is clear from the record that the district court's exercise of discretion was based on consideration of the relevant factors ... we cannot review the decision for abuse of discretion without benefit of the lower court's reason for deciding as it did." Insurance Co. v. Moore, 783 F.2d 1326, 1328 (9th Cir. 1986) (per curiam) (citations & internal quotations omitted); see also McCulloch v. Albert E. Price, Inc., 823 F.2d 316, 323 (9th Cir. 1987); Oregon Environmental Council v. Kunzman, 817 F.2d 484, 498 (9th Cir. 1987); Hayes v. Heckler, 785 F.2d 1455, 1456-57 (9th Cir. 1986) (per curiam).
The award is VACATED and REMANDED to the district court for further findings.
The panel unanimously finds this case appropriate for submission without oral argument pursuant to 9th Cir.R. 34-4 and Fed.R.App.R. 34(a)
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
Section 35 states: "The court in exceptional cases may award reasonable attorney fees to the prevailing party." 15 U.S.C. § 1117(a). We have allowed fees to a prevailing plaintiff "where the infringement is malicious, fraudulent, deliberate or wilful." Sealy, Inc. v. Easy Living, Inc., 743 F.2d 1378, 1384 (9th Cir. 1984) (citation omitted). Fees are available to prevailing defendants to protect them "against unfounded suits brought by trademark owners for harassment and the like." S.Rep. No. 1400, 93d Cong., 2d Sess., reprinted in 1974 U.S.Code Cong. & Admin.News 7132, 7136
In awarding fees the district court stated:
"This is a motion for attorneys' fees and costs. The court has read and considered the motion and the opposition to the motion, and it is the court's view that attorneys' fees are appropriate in this case from and after the filing of the counterclaim by the defendant....
* * *
"The court does believe ... this action fits within the exceptional case criteria of section 35 of the Lanham Act entitling the plaintiff to an award of fees.
"The claim that there should be Rule 11 sanctions here, the court does not accept that. While this case was very weak in terms of trademark infringement, the court cannot say as a matter of fact that it is totally without foundation because the burden placed on the holder of a trademark is to protect the trademark or risk the possibility of losing it. I can understand their having gone into it to that extent, and I would be reluctant to impose Rule 11 sanctions."
Compare Sealy, Inc., 743 F.2d at 1384, with Zaldivar v. City of Los Angeles, 780 F.2d 823 (9th Cir. 1986)
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