Photo by Polymath38, via Wikimedia Commons.

The Delaware Court of Chancery on Friday denied multimillion-dollar requests for attorney fees from Mrs. Fields Brand Inc. and Interbake Foods, ruling that neither party had prevailed in a dispute over a contract to sell Mrs. Fields cookies in grocery and convenience stores.

Chancellor Andre G. Bouchard said the baked-goods companies had fought to a draw on the two main issues of a 2016 trial, where Interbake argued that it could exit a five-year licensing agreement to sell Mrs. Fields' products.

In June, Bouchard ruled in favor of Mrs. Fields, saying that Interbake could not rely on its “material adverse change” argument to escape the deal. But he also rejected Mrs. Fields' “astounding” claim for $28.7 million in damages in the case.

Both sides later moved for attorney fees under a provision of the contract that required the “prevailing” party to be reimbursed for costs and expenses of litigation stemming from the licensing agreement. Interbake asked for $2.6 million, and Mrs. Fields requested $5.3 million for its efforts.

In an 11-page letter opinion, Bouchard said Interbake's attempts to validate its exit from the agreement spawned a slew of related legal questions, which accounted for the bulk of his 108-page ruling in June. But he also noted that Mrs. Fields made its losing push for money damages a “central focus” of its litigation strategy, despite a standstill agreement that ensured the licensing agreement would remain in place throughout the case.

“In sum, because each side both won and lost on one of the two equally core issues in this case, I hold that neither Mrs. Fields nor Interbake predominated in the litigation and thus neither is entitled to an award of attorneys' fees or expenses as the 'prevailing party' under [the licensing agreement],” the chancellor wrote.

Attorneys from both sides were not immediately available to comment on Bouchard's ruling.

The companies agreed to the licensing agreement in 2012, at a time when Mrs. Fields was trying to restore its reputation by bringing the quality of its cookies back in line with brand expectations.

Under the terms of the agreement, Interbake, which makes Girl Scout Cookies and other foods for retailers like Wal-Mart Stores Inc., was given the exclusive right to use Mrs. Fields' intellectual property to make a sell of the cookies. In turn, it was required to pay a minimum royalty of $2 million for each of the last four years of the contract.

But after a failed bid to buy the Colorado-based Mrs. Fields, Interbake accelerated its attempts to escape the agreement, arguing in court documents that Mrs. Fields knew when it entered the contract that the quality of its cookies had declined to the point that Interbake would not be able to meet its sales targets.

Interbake argued during a six-day trial that the escape hatch was available to both parties because the contract did not explicitly state which side had the right to walk away.

Bouchard, however, ruled that the structure and “commercial logic” of the contract meant that only Mrs. Fields could exit the deal due to disappointing performance. Interbake, he said, was given plenty of financial data before signing the agreement and should have been aware of Mrs. Fields' struggles before entering the licensing agreement.

“Awful taste does not qualify as a material adverse fact or event within the meaning of [the contract] because the retail branded cookies were openly available on store shelves. Interbake thus had ample opportunity to test the quality of the Mrs. Fields cookies (and it is hard to imagine it did not) before deciding to enter into the license agreement,” Bouchard wrote in June.

Mrs. Fields was represented by David A. Jenkins and Robert K. Beste of Smith, Katzenstein & Jenkins and Bijan Amini and Avery Samet of Storch Amini.

Interbake was represented by Chad S.C. Stover, Kevin G. Collins, Damon R. Leichty and Alice J. Springer of Barnes & Thornburg.

The case is captioned Mrs. Fields Brand v. Interbake Foods.