U.S. District Chief Judge Lawrence Stengel of the Eastern District of Pennsylvania

While the lawyer representing a bakery sued for trademark infringement over a pretzel sandwich thought the lawsuit was half-baked, a federal judge ruled that it did not rise to the level of a fee sanction.

U.S. District Chief Judge Lawrence F. Stengel of the Eastern District of Pennsylvania denied a motion for $450,000 in attorney fees from Barry L. Cohen of Royer Cooper Cohen Braunfeld in Conshohocken, who represents defendant Better Bakery.

According to Stengel's opinion, the case resolved in Better Bakery's favor, but an award for attorney fees to be paid by the plaintiff, Sweet Street Desserts, would be appropriate only if the litigation was extraordinarily vexatious and pointless.

“Here, Sweet Street's claims were well-reasoned, supported by case law, and based in the factual record of the case, which included written discovery, exhibits, and deposition testimony,” Stengel said. “There is nothing in the record that shows Sweet Street's attorney acted in an egregious nature that would warrant sanctions under Section 1927. Here, awarding attorney's fees would venture too closely to post hoc reasoning that simply because Sweet Street did not ultimately prevail, its action must have been unreasonable.”

Sweet Street sued Better Bakery, alleging that after a failed attempt at collaboration between the two companies to produce a new pretzel sandwich, Better Bakery went incommunicado and eventually started selling the pretzel sandwich on its own to large-scale retailers like Wal-Mart and Sam's Club.

Sweet Street claimed Better Bakery violated a nondisclosure agreement and an oral accord and argued it had protectable intellectual property in the case, according to Stengel. However, two counts of Sweet Street's complaint were tossed initially, and the rest of the case was later dismissed in its entirety.

Cohen did not immediately respond to a request for comment. Neither did Sweet Street's attorney, Joseph E. Wolfson of Stevens & Lee in Philadelphia.

Better Bakery argued that the case was exceptional in the way the plaintiffs litigated it and, therefore, warranted attorney fees. Stengel disagreed.

“This is not an exceptional case,” Stengel said. “There is no evidence in the record that Sweet Street acted in bad faith, fraud, or with malice. To the contrary, the record shows evidence that Sweet Street initiated this lawsuit in good faith. The parties had a collaborative and cooperative relationship centered on creating a new and exciting product that would benefit both parties.”

He continued, “Sweet Street believed, though incorrectly, that because of the [nondisclosure agreement] and the presumed oral exclusive contract that it had protectable intellectual property rights in the pretzel product that was being produced. Based on this good faith belief and Better Bakery's choice to market and sell its own similar pretzel sandwich, Sweet Street initiated this action.”

Stengel also denied the attorney fee request made under the Pennsylvania Uniform Trade Secrets Act, and a request that the court use its disciplinary powers to sanction Sweet Street's counsel.