In a recent decision, the U. S. Court of Appeals for the Seventh Circuit ordered the defendant-appellant to pay the plaintiff-appellee’s attorneys’ fees, yet denied the appellee’s petition as untimely under the Federal Rule of Appellate Procedure 39(d)(1). JCW Investments, Inc., v. Novelty, Inc., Case No. 02 C 4950 (7th Cir., Nov. 28, 2007) (Wood, J.).
The plaintiff, Tekky Toys, designed and sold a line of “farting dolls.” “Pull My Finger® Fred” was its first such doll. The creators applied for and received a copyright registration on Fred, which they subsequently assigned to Tekky. The defendant, Novelty, manufactured and sold a similar product entitled “Fartman.” Tekky first learned of Fartman in March 2002, and filed suit three months later, alleging copyright infringement, Lanham Act trademark infringement (for use of the phrase “Pull My Finger”) and Illinois unfair competition. Tekky won a jury verdict for $575,000. Novelty appealed, and the 7th Circuit affirmed. Thirty days later, Tekky filed a petition for attorneys’ fees, expenses and costs in district court in the amount of $78,000.
The court quickly dispensed with Tekky’s petition. Under the Federal Rule of Appellate Procedure, a bill of costs must be filed within 14 days of entry of judgment. Tekky’s petition was filed 30 days after final judgment and was therefore denied as untimely. Citing no authority to support its position, Novelty argued that Rule 39(d)(1)’s 14-day deadline should similarly apply to Tekky’s request for attorneys’ fees and thus should be denied as untimely. The 7th Circuit disagreed, reasoning that “[i]n the absence of a statutory or rule-based deadline,” a general rule of diligence should govern. The court concluded that Tekky was diligent in preparing and submitting its request. Novelty then attempted to persuade the court that an award of fees was unwarranted because its appeal was not frivolous. The 7th Circuit summarily dismissed this argument, stating “[t]he strength of Tekky’s case against Novelty weighs heavily in favor of awarding fees, as the copyright infringement in this case was flagrant, and the trademark infringement was willful.” Thus, Tekky was “entitled to an award of the fees that it reasonably incurred in defending Novelty’s appeal.” The court did, however, reduce the fee award by $7,000, half of the cost requested for Tekky’s lead counsel to prepare the instant petition.