BillFloat Inc. v. Collins Cash Inc.

Background

BillFloat sued Collins Cash Inc. and its owner, Abraham Cohen, alleging trademark infringement under federal and state law, unfair competition, and breach of contract. BillFloat used the federally registered marks “SmartBiz,” “SmartBiz Loans,” and “SmartBiz Advisor” for business-financing services. Collins Cash adopted the “Smart Business Funding” mark in December 2014. The parties entered a partnership agreement in 2018.

The court previously granted summary judgment to the defendants on BillFloat’s breach-of-contract claim and denied summary judgment on the remaining claims. Before trial, BillFloat voluntarily dismissed the surviving claims other than federal trademark infringement under the Lanham Act. After a four-day trial, the jury found that neither Collins Cash nor Abraham Cohen infringed BillFloat’s trademarks.

BillFloat’s Posttrial Motions

BillFloat renewed its motion for judgment as a matter of law under Federal Rule of Civil Procedure 50(b), or alternatively sought a new trial under Rule 59(a). It argued that the court improperly admitted a market survey prepared by the defendants’ expert, Keegan, and that the jury might have drawn a negative inference from BillFloat’s failure to conduct its own survey.

The court denied both motions. It held that the criticisms of Keegan’s survey concerned the weight the jury should give the evidence, rather than whether the evidence could be admitted. BillFloat had cross-examined Keegan about the survey’s control webpage, design, and group of respondents, giving the jury information with which to evaluate the survey.

The court also held that the defendants’ counsel could argue about BillFloat’s lack of survey evidence. The court found no evidence that the jury disregarded its instructions or that the challenged evidence and argument prejudiced BillFloat. Independently, the court concluded that substantial evidence supported the verdict, including evidence that BillFloat’s mark was relatively weak, the parties’ primary services differed, the marks were not sufficiently similar, and there was little evidence of actual customer confusion.

For the new-trial motion, the court concluded that the verdict was not contrary to the clear weight of the evidence. It further held that even if admitting the survey had been erroneous, the admission did not substantially prejudice BillFloat.

Attorneys’ Fees and Costs

The defendants sought fees and costs under the partnership agreement and section 1117(a) of the Lanham Act. The agreement allowed the prevailing party to recover reasonable attorneys’ fees for enforcing rights arising out of or relating to the agreement.

The court held that the defendants had provided adequate notice of their request for fees under the agreement. It awarded fees for the breach-of-contract claim because that claim was an action on the contract. But it held that the Lanham Act trademark claim did not arise out of or relate to the agreement: the alleged infringement began before the parties entered the agreement, and the two claims involved different issues, facts, and evidence. The defendants therefore could not recover contract-based fees for the trademark claim.

The court also denied fees under the Lanham Act. That statute permits fees in “exceptional” trademark cases, meaning cases that stand out because of the strength of a party’s position or the unreasonable way the case was litigated. Considering the circumstances as a whole, the court found that BillFloat’s claim and litigation conduct did not make the case exceptional.

The defendants requested $121,306.75 in fees through the date they won summary judgment on the contract claim. Because their billing records made it difficult to separate work on the contract claim from work on the trademark claim, the court reduced the request by 25 percent for block billing and awarded $90,980.06.

The court denied the defendants’ request for non-taxable costs under the Lanham Act and the agreement. It ordered the defendants to file a bill of taxable costs, which are costs recoverable under the applicable federal cost statutes.

Other Dispositions and Conclusion

Judge Edward M. Chen granted BillFloat’s motion to file documents under seal. The court denied BillFloat’s motion for judgment as a matter of law or a new trial, granted in part and denied in part the defendants’ motion for attorneys’ fees, ordered the defendants to file a bill of taxable costs, directed the clerk to enter judgment and close the case, and stated that the order disposed of Docket Nos. 137, 138, and 141.