United States: The Northern District Of California Denies Fitbit Its Attorneys' Fees Despite Fitbug's Baseless Disgorgement Theory

On June 5, 2015, the Northern District of California denied Fitbit, Inc.'s motion for attorneys' fees and costs against plaintiff Fitbug Ltd. Both parties make and sell portable electronic fitness tracking devices, and Fitbug had alleged that Fitbit's marketing and sale of similar devices under a similar name and logo infringed Fitbug's trademarks. However, this past January, the court granted Fitbit's motion for summary judgment, finding that Fitbug's trademark infringement claims were barred by laches. Fitbit subsequently moved for its attorneys' fees under 15 U.S.C.§ 1117(a), which authorizes fee-shifting in "exceptional cases."

The court recognized the applicability to Section 1117(a) of the Supreme Court's decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc., which outlines the standard for finding a case "exceptional" in patent cases. Under that standard, if a case stands out from others with respect to either (1) "the substantive strength of a party's litigating position," or (2) "the unreasonable manner in which the case was litigated," a prevailing party's attorneys' fees may be awarded. Fitbit asserted that this case was exceptional under both prongs. First, Fitbit argued that Fitbug's litigating position was weak because it knew or should have known that laches barred its claims prior to filing suit, and Fitbug had no factual or legal basis to argue against Fitbit's laches defense. Second, Fitbit argued that Fitbug pursued its claims unreasonably by seeking legally and factually unsupported damages theories. Reviewing the totality of the circumstances, the court disagreed that the case was exceptional.

To determine whether the delay was unreasonable, the court looked to the statute of limitations for the most analogous state law cause of action and noted that the Ninth Circuit and California district courts have almost uniformly assumed that four years is the relevant period. Therefore, as long as it delayed no more than four years, Fitbug reasonably could have believed its claims would be timely. According to the court, Fitbug could have reasonably have concluded its delay was less than four years when it filed suit. In its summary judgment ruling, the court concluded that the laches period began in September 2008 when Fitbit first announced its products, but concluded that Fitbug's argument that the laches period should not have begun until September 2009 when Fitbit first shipped its allegedly infringing goods was at least legally colorable. Accordingly, Fitbug's decision to bring suit in March 2013 (within that four-year period) was neither legally, nor factually unreasonable.

On the second prong—the unreasonable manner of litigation—Fitbug's damages claims included a demand both for disgorgement of Fitbit's profits and for lost royalties. The court first noted that a disgorgement theory requires a showing of an intent to "exploit the advantage of an established mark" and "gain the value of an established name of another." Fitbug offered no evidence to support same. The court might not have been troubled by this had Fitbug asserted its theory at the start of litigation—i.e., without the benefit of discovery. However, when Fitbug finally asserted this theory, the action had been pending for over a year and fact discovery was almost closed. Moreover, Fitbug did not drop its factually unsupported theory until twenty days prior to trial. The court therefore concluded that Fitbug's decision to seek disgorgement of Fitbit's profits lacked an objectively reasonable basis.

Regarding Fitbug's lost royalties theory, the court noted that reasonable royalties are most often granted in trademark infringement cases where the parties had a prior licensing arrangement or where the plaintiff had a history of licensing its mark to third parties. Though neither of these circumstances were present here, Fitbug identified at least one case that allowed a reasonable royalty theory to proceed despite the absence of these circumstances. Thus, even if it was unlikely to succeed, the court concluded that Fitbug's lost royalties theory was not groundless or pursued in bad faith. Accordingly, considering the totality of the circumstances, the court held that Fitbug's baseless disgorgement theory alone was not sufficient to render the case "exceptional."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions