Appeals court decision gives XYZ another chance to be awarded legal fees.
It’s been over three years since Verisign (NYSE: VRSN) sued XYZ, the seller of .xyz domain names, for false advertising.
The District Court granted summary judgment in favor of XYZ in November 2015 but that wasn’t the end of it. XYZ asked the court to award attorney’s fees, at which point Verisign appealed the summary judgment decision to the Court of Appeals.
XYZ prevailed again in the appeal, which meant that the lower court could then consider XYZ’s request for attorney’s fees. The lower court found that the case did not qualify as exceptional and denied XYZ’s request for Verisign to pay its growing legal bills.
Then it was XYZ’s turn to appeal. It argued that the District Court applied the wrong standard–“clear and convincing evidence” instead of “a preponderance of evidence”– when considering the legal fees.
The Court of Appeal just found (pdf) in XYZ’s favor. It has remanded the case to District Court, agreeing that the lower court applied the wrong standard in its decision. It also clarified that XYZ does not need to show that Verisign acted in bad faith to prove an exceptional case worthy of legal reimbursement.
As with the original lawsuit, the stakes are higher for XYZ and Verisign. The millions in legal fees XYZ has accrued are a big deal to it and just a rounding error to Verisign.