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Munchkin, Inc. v. Luv n’ Care, Ltd.

Fee Shifting Award Reversed Due to Movant’s Failure to Provide District Court Sufficient Factual Basis

Munchkin, Inc. v. Luv n’ Care, Ltd., __ F.3d __, 2020 WL 3041266 (Fed. Cir. June 8, 2020) (Dyk, Taranto, CHEN) (C.D. Cal.: McDermott) (3 of 5 stars)

Fed Cir reverses § 285 exceptionality determination and consequent fee-shifting. The case arose from Munchkin’s claims that LNC had engaged in patent and trademark infringement and unfair competition relating to its sale of spillproof drinking cups. The district court abused its discretion by basing its exceptionality determination on issues not actually litigated in the case, and for which LNC’s motion “failed to make the detailed, fact-based analysis of Munchkin’s litigating positions to establish that they were wholly lacking in merit.” Op. at 9. The opinion discusses how none of the principal issues (patent infringement, trademark infringement, trade dress) were actually resolved by the district court. It finds that Munchkin’s claims as to each were not shown to be unreasonable per se. That IPR instituted on Munchkin’s patent, and resulted in an affirmed decision of unpatentability for all claims, “does not alone translate to finding its defense of the patent unreasonable.” Id. at 11. That Munchkin had dismissed some of its trademark infringement claims with prejudice (after the court granted its motion to amend its complaint to substitute a different trademark) “does not establish, by itself, a finding that the merits were so substantively weak as to render the claims exceptional.” Id. at 14. As to trade dress, even assuming that prior cups shared features of Munchkin’s does not, by itself, establish that Munchkin’s alleged trade dress was not protectable.

KEYWORDS: ATTORNEY FEES; EXCEPTIONALITY