Court Watch

As trademark infringement actions can involve hundreds of thousands of dollars in attorneys' fees for each party, a critical consideration for potential infringement plaintiffs may be whether they are likely to be awarded their fees. In certain “exceptional cases,” federal law allows parties claiming trademark infringement to be awarded their attorneys' fees. The recent decision of the federal District Court for the District of Minnesota in Zerorez Franchising System, Inc. v. Distinctive Cleaning, Inc., No. 13-2326 (D. Minn. May 5, 2015), demonstrates that patience and restraint could increase a franchisor's odds of recovering its fees in trademark litigation with a competitor.

Zerorez Franchising System, Inc. (ZFSI) is a franchisor of a carpet and surface cleaning business with franchisees throughout the United States. ZFSI has registered “Zerorez” as a trademark. One of ZFSI's franchisees operates in Richfield, MN, doing business under the name ZEROREZ (for convenience, ZFSI and the franchisee are sometimes collectively referred to as ZFSI). In April 2012, the franchisee discovered online advertisements stating “Zero Rez Carpet Cleaning.” The franchisee learned that this advertisement appeared in response to various Google searches, including “Zerorez,” “twin cities carpet cleaning,” and similar phrases. The advertisements linked to the website of a competitor, Distinctive Cleaning, Inc., which offered various cleaning services, including carpet cleaning, in the same market area. Shortly thereafter, ZFSI sent Distinctive a cease and desist letter, advising Distinctive that Zerorez is a protected mark and asserting that Distinctive's advertisements were deceptive and constituted trademark infringement.