Hard Rock Should Not Have to Pay Startup Attorney Fees

Hard Rock Cafe Inc. does not think it’s fair to pay the attorney fees of a startup after suing the young company for trademark infringement. Hard Rock Cafe is a chain of theme restaurants founded in 1971 that has expanded to include casinos, hotels, a park, and sports stadium.

RockStar Hotels launched in January 2017, but includes a healthy portfolio of properties. The meaning behind the RockStar name is not to convey a party atmosphere, but that the guests will be treated like celebrities. This distinct difference in meaning resonated with the United States District Court for the Southern District of Florida and Hard Rock’s motion for a preliminary injunction was denied. Now, RockStar Hotels is asking the Court to order Hard Rock Cafe to pay $462,000 to reimbursement the startup for its attorney fees.

Under the Trademark Act, attorney fees are recoverable by a party when the case is exceptional. Whether a case is exceptional depends on the totality of the circumstances, which considers the respective merits of the parties’ case and the manner in which a case is litigated. Because the Trademark Act does not allow the prevailing party to recover its attorney fees, an exceptional case finding is the only way a party that is being bullied by a trademark owner can recover the costs to defend itself.

In response to RockStar Hotel’s attorney fees petition, Hard Rock argued that it did the right thing and dropped its lawsuit after the court denied its request for a preliminary injunction. We are guessing it was hard for Hard Rock’s attorneys to say that with a straight face. However, without knowing all the details, it is hard to say Hard Rock’s lawsuit was completely without merit. The Hard Rock mark is used on hotels and on restaurants, which are related to hotel services.

The better question that Hard Rock should have asked itself is whether RockStar Hotels will either take business away from them or will harm its reputation such that it loses business from the negative association. Obviously, the answer to these two questions was no otherwise it would not have dropped the lawsuit. Losing at the preliminary judgment stage does not mean you are prevented from ultimately winning at trial.

Just because a lawsuit is unwise does not mean the plaintiff is a bully just because it is bigger than the defendant. What is more suspect is startup RockStar Hotel’s attorney fees petition for $462,000 when the case is only at the preliminary judgment stage. By the time a preliminary judgment motion is filed, not much has happened in the case, and responding to a preliminary motion is not a hundreds of thousands of dollars event.

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