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Fees Denied in ‘Frivolous’ Copyright Case at Seventh Circuit

June 17, 2020, 8:38 PM

A wellness store’s “baseless” and “objectively unreasonable” copyright claims against a former employee didn’t require an attorneys’ fees award, the Seventh Circuit said Wednesday.

Although the claims were frivolous, other circumstances in the case justified denying the award, the U.S. Court of Appeals for the Seventh Circuit said.

After being fired from Apple Wellness in Madison, Wis., David Knott started a competing shop, Embrace Wellness. Knott’s shop allegedly shared design features with Apple Wellness’ stores and carried similar products.

Apple Wellness sued Knott and his store in Wisconsin federal court for trademark, trade dress, and copyright infringement. Apple Wellness eventually dropped its claims, and Knott requested attorneys’ fees for the copyright claims.

The Seventh Circuit said that although there’s a “strong presumption” in favor of attorneys’ fees for a defendant who wins a copyright case—especially when the losing party’s position is unreasonable—the district court was still justified in denying Knott’s request.

Apple Wellness’ claims “seemed to have been brought in good faith,” there were minimal compensation and deterrence concerns because the copyright claim was dismissed quickly, and there was no possibility that the company would re-raise the claims in the future, the court said.

In addition, the rationale for the “strong presumption” of attorneys’ fees didn’t apply because the claims had been voluntarily dismissed, and Knott was therefore “under no pressure to abandon a meritorious defense and settle.”

Judge Joel M. Flaum wrote the opinion, joined by Judges Michael S. Kanne and Michael B. Brennan.

Kramer Elkins & Watt LLC represented Apple Wellness. Hanson Law Group LLP represented Knott.

The case is Timothy B. O’Brien LLC v. Knott, 7th Cir., No. 19-2138, 6/17/20.

To contact the reporter on this story: Blake Brittain in Washington at bbrittain@bloomberglaw.com

To contact the editor responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com

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