Court Awards Trader Joe’s to Pay Union Legal Fees Due to “Weak” Trademark Infringement Case

On May 1st, 2024, Reuters reported that the United States District Court for the Central District of California has ordered Trader Joe’s—that nationwide grocery chain—to pay a labor union $100,000 for attorneys’ fee because the trademark infringement claim it filed was exceptionally “weak.” In this article, our Boca Raton trademark rights attorney provides an overview of the dispute, the decision, and the fee-shifting provision for trademark infringement claims.

Federal Court Finds Trader Joe’s Trademark Lawsuit “Exceptionally Weak” 

A federal judge dismissed a trademark infringement lawsuit filed by Trader Joe’s against its own workers’ union (Trader Joe’s United.) Upon review of the matter. The judge determined that there was no likelihood of consumer confusion between the union’s merchandise and the company’s trademarks. The ruling came amidst a backdrop of ongoing labor disputes. The judge determined that the lawsuit was likely an attempt by the company to put pressure on the labor union. It found the claim “exceptionally weak.” As such, the defendant (Trader Joe’s United) was awarded more than $100,000 in attorneys’ fees.

 Understanding Fee-Shifting 

In a legal context, fee-shifting refers to a provision where the losing party in a lawsuit is required to pay the attorney’s fees and court costs of the winning party. It is a mechanism designed to deter frivolous lawsuits and to punish parties that engage in especially poor conduct. To be clear, fee-shifting is not assumed. Quite the contrary, the U.S. does not have a “loser pays” legal system. Parties are assumed to be responsible for their own legal fees. However, fee-shifting may be either mandatory or discretionary based on statute or contract.

Fee-Shifting is Possible in Trademark Infringement Claims 

Attorneys’ fees and other legal costs may be awarded to the prevailing party in trademark infringement litigation. Fee-shifting is not guaranteed in trademark disputes. A party—either plaintiff or defendant—could win in a trademark case without being awarded attorneys’ fees. However, fee-shifting is possible as a matter of the statute. Typically, courts in trademark infringement claims will award attorneys’ fees if one of the following two applies:

• Frivolous Lawsuit By Plaintiff: Filing a frivolous lawsuit is considered to be bad faith conduct. A party that files a frivolous trademark infringement claim—as the judge ruled that Trader Joe’s did in this case—can be required to pay the defendant’s fees.
• Willful Infringement By Defendant: A prevailing plaintiff in a trademark infringement claim may also be entitled to attorney’s fees. Typically, fees will only be awarded if the defendant engaged in willful infringement or other bad faith misconduct.

 Set Up a Confidential Consultation With a Trademark Lawyer in South Florida

At Perkins Law, we are a brand protection law firm with extensive experience handling a wide range of trademark law issues. If you have any questions or concerns about a specific trademark infringement case, please contact our brand protection team today for a confidential consultation. From our Boca Raton office, we provide trademark law services throughout all of Southeast Florida.

Source:

reuters.com/legal/litigation/trader-joes-must-pay-unions-legal-fees-weak-trademark-lawsuit-2024-05-01/