CHARLOTTE, NC –– The United States District Court for the Eastern District of North Carolina has ordered Walmart to pay Variety Stores, Inc. $1.69 million in attorney’s fees and costs incurred by Variety in a trademark infringement action arising out of Walmart’s infringement of Variety’s BACKYARD trademark. Finding the case “exceptional” under the federal Lanham Act, the district court applied the Supreme Court’s analysis in the recent Octane Fitness case.

In the Order, the district court determined that there has been an unusual discrepancy in the positions taken by the parties. The district court cited to the fact that Walmart was “twice warned by its own attorneys not to” use Variety’s trademark but did so anyway. The district court also cited to Walmart’s “remarkable contentions throughout this litigation [including] the argument that the [trademark] was worth ‘zero’[.]”

This Order comes on the heels of the district court’s November 2016 profit disgorgement order which ordered Walmart to disgorge in excess of $32 Million in profits and the district court’s December 2015 summary judgment order which held Walmart liable for willful trademark infringement as well as violations of North Carolina’s Unfair and Deceptive Trade Practices Act. The legal publication IPLAW360 dubbed the disgorgement order a “Top 10 Trademark Ruling of 2016.” https://www.law360.com/articles/872893. Both the disgorgement order and the summary judgment order are currently under appeal to the Fourth Circuit.

Throughout this trademark infringement litigation Variety has been represented by W. Thad Adams, III, Samuel A. Long, and Christina Davidson Trimmer of Shumaker Loop & Kendrick LLP. The case is Variety Stores, Inc. v. Wal-Mart Stores, Inc., case number 5:14-cv-00217, in the U.S. District Court for the Eastern District of North Carolina.

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