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By Yin Wilczek
Mrs. Fields Brands Inc. and Interbake Foods LLC can’t claim attorneys’ fees in their courtroom battle over the marketing of the chain’s specialty cookies.
The litigation culminated in a ruling in June 2017 in which the Delaware Chancery Court said Interbake couldn’t pull out of a licensing agreement to sell Mrs. Fields products at grocery and convenience stores. Interbake, based in Richmond, Va., makes Girl Scout cookies and store-brand treats for Wal-Mart Stores Inc. and other retailers.
In the latest development, the chancery court Jan. 5 said Mrs. Fields and Interbake can’t recover $5.4 million and $2.7 million, respectively, from each other to pay the attorneys’ fees and expenses incurred during the litigation. Neither side had “predominated”—won regarding the case’s chief issue, wrote Chancellor Andre G. Bouchard. Under their licensing agreement, only the “prevailing” party can claim attorneys’ fees, the judge said.
The ruling clarifies how Delaware courts award attorneys’ fees, especially in close fights with no clear winners.
In its Jan. 5 ruling, the chancery court said that although Mrs. Fields prevailed on the issue of whether Interbake prematurely terminated the licensing agreement, it lost on its demand for more than $28 million in damages. The court concluded in June that damages weren’t provided for under the parties’ agreement.
Accordingly, because “the parties split on two equally core issues, neither can be said to have `prevailed’ so as to trigger the contractual entitlement to fee-shifting in the License Agreement,” Bouchard said.
Mrs. Fields was represented by Smith, Katzenstein & Jenkins LLP, according to the court docket. Interbake was represented by Barnes & Thornburg LLP.
The case is The Mrs. Fields Brand Inc. v. Interbake Foods LLC , 2018 BL 3511, Del. Ch., No. 12201-CB, 1/5/18 .
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