Chocolate Moonshine Fudge Maker Must Pay Attorney’s Fees for its Trademark Claims in Pennsylvania District Court

This case is exciting on many levels. 𝑊𝑎𝑟𝑚𝑎𝑛 𝑒𝑡 𝑎𝑙. 𝑣. 𝐿𝑜𝑐𝑎𝑙 𝑌𝑜𝑘𝑒𝑙𝑠 𝐹𝑢𝑑𝑔𝑒 𝐿𝐿𝐶 𝑒𝑡 𝑎𝑙., case number 2:19-cv-01224. First, it involves all types of intellectual property (IP), except patents: trade secrets, trademarks and copyrights. As such, this case could be perfect for a law school basic (or even advanced) course on IP.

Second, this case brings together different areas of law: IP and family law, general corporate law (LLC), and make them interplay. What’s more, this case is fought in different tribunals. Other than the state court where the divorce proceedings occurred and the US District Court for the Western District of Pennsylvania where the main battle has been fought over the IP infringement claims, the parties also are engaged in administrative proceedings before the Trademark Trial and Appeal Board (TTAB) of the US Patent and Trademark Office (USPTO). The TTAB cancellation proceedings No. 92080445 challenging Defendant CM Chocolatier LLC’s Trademark Registration No. 6821135 for CHOCOLATE MOONSHINE are currently suspended.

Finally, this case shows the importance of a trademark attorney as parties’ indispensable counsel throughout the entire process: from the inception of the trademark and its filing with the USPTO and through to enforcement (sending a cease-and-desist letter and preparing and filing a complaint and litigating the case). A major takeaway: a trademark and copyright specialist must be a part of a litigation team in district court.

Here is what happened in this case. In 2019, Mr. Christopher M. Warman sued his ex-wife, Christine Falvo, and her business partners claiming they were stealing the secret recipe he had developed for fudge that would stay shelf-stable for longer than other recipes and was therefore more suitable for mass production and distribution across the country. So, the trade secret is at the heart of this case. (Attention law school professors: you can use the recipe for a chocolate fudge rather than a hackneyed example of Coca-Cola recipe locked in a safe in the company’s headquarters in Atlanta.)

Fast-forward this case to December 2023, Mr. Warman won his trade secret claims in a jury trial. The jury also awarded Mr. Warman about $238,000 in damages.

Mr. Warman also claimed that Defendants were infringing his CHOCOLATE MOONSHINE trademark, and that Defendant Griffin had “misappropriated” copyrighted photos of his fudge. Prior to the trade secret trial, over halfway through the case, in 2022 Defendants moved for summary judgment against Warman’s trademark and copyright claims and prevailed. 𝑊𝑎𝑟𝑚𝑎𝑛 𝑒𝑡 𝑎𝑙. 𝑣. 𝐿𝑜𝑐𝑎𝑙 𝑌𝑜𝑘𝑒𝑙𝑠 𝐹𝑢𝑑𝑔𝑒 𝐿𝐿𝐶 𝑒𝑡 𝑎𝑙., 2022 U.S. Dist. LEXIS 233312; 2022 WL 17960722.

In December 2024, Defendants moved to recover their attorneys’ fees from Plaintiffs claiming that Plaintiffs brought their trademark and copyright claims inappropriately. On April 16, 2025, Magistrate Judge Patricia L. Dodge granted Defendants’ motion. Defendants were awarded more than $174,000 in attorney’s fees and costs. Warman v. Loc. Yokels Fudge, LLC, 2025 U.S. Dist. LEXIS 72083. So, the parties nearly ended up even-steven.

The focus of this posting is solely on the trademark claims and the award of attorney’s fees. Generally, the recovery of reasonable attorneys’ fees is only permitted under the Lanham Act “in exceptional cases.” 𝐹𝑎𝑖𝑟 𝑊𝑖𝑛𝑑

𝑆𝑎𝑖𝑙𝑖𝑛𝑔, 𝐼𝑛𝑐. 𝑣. 𝐷𝑒𝑚𝑝𝑠𝑡𝑒𝑟, 764 F.3d 303, 314 (3d Cir. 2014). Supreme Court precedent dictates that an exceptional case is “one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated. District courts may determine whether a case is ‘exceptional’ in the case-by-case exercise of their discretion, considering the totality of the circumstances.” 𝑂𝑐𝑡𝑎𝑛𝑒 𝐹𝑖𝑡𝑛𝑒𝑠𝑠, 𝐿𝐿𝐶 𝑣. 𝐼𝐶𝑂𝑁 𝐻𝑒𝑎𝑙𝑡ℎ & 𝐹𝑖𝑡𝑛𝑒𝑠𝑠, 𝐼𝑛𝑐., 572 U.S. 545, 554 (2014). “[A] district court may find a case ‘exceptional,’ and therefore award fees to the prevailing party, when (a) there is an unusual discrepancy in the merits of the positions taken by the parties or (b) the losing party has litigated the case in an ‘unreasonable manner.’” 𝐹𝑎𝑖𝑟 𝑊𝑖𝑛𝑑 𝑆𝑎𝑖𝑙𝑖𝑛𝑔, 764 F.3d at 315 (quoting 𝑂𝑐𝑡𝑎𝑛𝑒 𝐹𝑖𝑡𝑛𝑒𝑠𝑠, 572 U.S. at 554).

I have discussed the Nike and Penn State/Sportswear cases previously. The award of attorney’s fees in those cases was not surprising, even if not predetermined. However, this case seems to stand out, and not in a way to support the award of attorney’s fees to prevailing party. After all, an award of attorney’s fees to a prevailing party in trademark cases is considered an extraordinary remedy. Courts have been reluctant to grant it.

A brief factual background is in order. On July 23, 2014, years before the commencement of this case, Christopher Warman Jr., son of Plaintiff Warman, filed for and subsequently obtained a federal trademark registration for CHOCOLATE MOONSHINE CO., Registration No. 4734457. An applicant usually declares, under the oath of perjury, that he or she is the owner of the mark filed-for. However, as it later turned out, the owner of the CHOCOLATE MOONSHINE CO. trademark was properly Mr. Warman himself (Plaintiff), who gave his son permission to use the trademark. Apparently, the father and son thought filing for trademark in son’s name would exclude the trademark, once registered, from the marital assets and from the reach of Mr. Warman’s soon to be ex-wife, Ms. Falvo. Of course, that did not work out well for them and specifically for Mr. Warman.

Later, when Defendants moved to recover their attorney’s fees for the trademark claims, Plaintiffs claimed that they made an honest mistake. Also, as Plaintiffs argued in their opposition to the motion, Mr. Warman and his son were not represented by an attorney at the time of filing the trademark application. (This is another highlight of this case why it should be taught in law school or at least be presented in a CLE class on ethics.)

In their 2022 summary judgment motion, Defendants attacked the viability of Plaintiffs’ trademark claims arguing that the underlying CHOCOLATE MOONSHINE CO. registration was 𝑣𝑜𝑖𝑑 𝑎𝑏 𝑖𝑛𝑖𝑡𝑖𝑜 (because the application was filed by the wrong party) or should be cancelled as fraudulently obtained. Curiously, the owner of the registered trademark, Mr. Warman, Jr., did not file a declaration of use under Section 8, and the USPTO found the registration abandoned. Nevertheless, the gesture of voluntarily abandoning his “ill-conceived” trademark registration did not stop the district court in finding fraud in Mr. Warman, Jr.’s action in procuring the trademark application: “Since Warman Jr. procured the trademark by fraud, the Court would have cancelled his registered trademark if it had not already been abandoned.” The court’s fraud holding is all the more surprising, especially on a summary judgment motion, given that the standard for finding fraud has been elevated by influential Federal Circuit in seminal 𝐼𝑛 𝑟𝑒 𝐵𝑜𝑠𝑒 𝐶𝑜𝑟𝑝., 580 F.3d 1240, 1245 (Fed. Cir. 2009). Few courts have found trademark procurement fraud since 2009.

Plaintiffs made another fatal mistake by basing their trademark claims solely on the registered trademark and seeking relief only under the 𝑓𝑒𝑑𝑒𝑟𝑎𝑙 Lanham Act, 15 U.S.C. § 1125. Usually, trademark plaintiffs also allege infringement of their 𝑐𝑜𝑚𝑚𝑜𝑛 𝑙𝑎𝑤 rights under 𝑠𝑡𝑎𝑡𝑒 𝑙𝑎𝑤. Plaintiffs failed to do so. Because their trademark registration was no good, Plaintiffs lost on the trademark claims in December 2022.

In their 2024 motion to recover their attorney fees, Defendants simply repackaged their fraud allegations, and the Magistrate Judge, surprisingly, found them sufficient. Defendants did not claim that Plaintiffs litigated this case in an unreasonable manner in any other respect. (Unreasonable litigation tactics is one of the two elements for finding an exceptional case warranting the award of attorney’s fees.) Perhaps the Magistrate Judge was ticked off by Plaintiffs’ finger-pointing arguments that one of Plaintiffs’ attorneys, Michael Betts, was not a trademark specialist (even though he skillfully led Plaintiffs to the victory on the trade secrets claims).

Be that as it may, the Magistrate Judge’s decision seems a little too harsh on Plaintiffs. It is possible that in my cursory review of the Court’s 2022 summary judgment decision, the parties’ briefs on the attorney’s fees motion and Magistrate Judge’s opinion, I may have overlooked some important aspects of this case that could make it “exceptional” to justify the award of attorney’s fees on the trademark claims. Nevertheless, the substantive strength of Plaintiffs’ litigation position did not seem that weak. (The obvious weakness of the losing party’s substantive position is another element.) After all, two competing parties have been using the same mark on the same product (and, therefore, consumer confusion is likely), and Plaintiffs appear to have prior trademark rights. Is it possible that Plaintiffs may have been punished twice and too harshly for their undoubtedly gross but nevertheless apparently honest mistake (in filing the trademark application in the wrong name) and for an oversight that may have been committed by their lawyers (by failing to prosecute common law trademark infringement claims)?