Surrey Propco LLC v. Denihan Ownership Company, LLC
- Lewis Kaplan
- 1:21-cv-08616
- U.S. District Court · Southern District of New York
- 2
In Surrey Propco v. Denihan, Judge Kaplan denied Denihan’s motion for Lanham Act attorney fees and costs.
Denihan Ownership Company, LLC’s request for attorney fees and costs was denied; the opinion does not award fees or costs to either party.
What happened
In Surrey Propco LLC v. Denihan Ownership Company, LLC, Denihan asked the court to make Surrey pay its attorney fees and litigation costs after Denihan won judgment on the pleadings in a dispute over rights to the THE SURREY trademark.
The court said Surrey’s legal position was weak and came close to qualifying as an “exceptional” case under the Lanham Act, but found the argument sufficiently plausible to avoid that finding. The court also said it had not decided that Denihan owns the trademark.
Judge Lewis A. Kaplan denied Denihan’s motion for attorney fees and costs.
The detailed version
- Surrey Propco LLC v. Denihan Ownership Company, LLC · No. 1:21-cv-08616
- Lewis Kaplan
- Oct. 27, 2022
Background
Denihan had previously obtained judgment on the pleadings in Surrey’s case. Surrey’s main position was that it acquired the THE SURREY trademark when it acquired the former hotel property. The court described that position as contrary to the purchase agreement’s language, which did not transfer trademarks and included disclaimers about the seller’s knowledge, control, and responsibility for the hotel’s operator. Surrey relied principally on a 1926 First Department decision and its interpretation of a 1971 lease.
Denihan then moved for attorney fees and costs under Section 35 of the Lanham Act. Denihan pointed to emails suggesting that some Surrey personnel previously believed Surrey did not own the trademark and that an assignment would be needed. Denihan also cited other alleged litigation conduct, including Surrey’s purported concealment of the purchase agreement.
Legal standard
The Lanham Act permits a court to award fees only in an “exceptional” case. The court explained that the Second Circuit has held that reasonable fees are authorized only when there is evidence of fraud or bad faith. Whether a case is exceptional is decided through the court’s discretionary, case-by-case assessment.
Court’s reasoning
The court said it could accept Surrey’s good-faith position only “with some degree of strain” and had difficulty imagining a case closer to the boundary of exceptional litigation. It was not entirely convinced that Surrey’s counsel had avoided one or more litigation abuses. But the court concluded that Surrey’s broader argument—that hotel name rights always run with the building—was supported by at least a colorable, though poor and unsuccessful, reading of the cited case and lease. That was enough to avoid finding the case exceptional for purposes of fees.
The court also clarified the earlier judgment’s basis. It had ruled that Surrey did not acquire intellectual property merely by purchasing the hotel’s former physical premises. It had not held that Denihan owns the THE SURREY mark.
Disposition
The court denied Denihan’s motion for attorney fees and costs. No fees or costs were awarded to Denihan in this order.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.