came to the conclusion here taking plaintiffs arguments in late i understand them they seem to be saying that there are two pathways for them to get to this quarterman of profits under the lanham act in the first is section one one seven subsection one which is which is actually states profits in the second is the actual damages and under section one one seven subsection two and the district court hero awarded actual damages except under section two despite the liddy panned out the court actually stated let me penned that you can use profits as a proxy for damages but only if it's difficult to prove what your actual damages are and it makes sense from a policy perspective that if you're a direct competitor with another with another person some of the products and that person made a profit off of the selling of that product those damages would be you know roughly approximate to what the what the losses were for the other side of this it case is different because profit here according to the affidavit submitted by the former president on tran over the course of selling this coffee product actually lost thirty seven million dollars looking at the infringing period gem java lost over a million dollars during the trademark infringement period fifty six zero pros claiming that they can be compensated for and so that there were no profits getting to profits the way that the court got to them is is through this you know multiple st you didn't prove your offsets on profits enough so we're going to just assume using this fiction that your profit for the entirety of your revenue which is two point four million dollars and that might be appropriate in a case where there is a direct competitor relationship stated here where there is no direct competitor relationship and the parties have already entered into a contract to license the trademark it's easy to see what the plaintiffs damages would be and that's their actual damages would go to the royalty rate which was set in the contract not to three percent or three percent of two point four million dollars so the ruling here in essence did so to end pack the ruling here  only work that they had that the company was doing at the time of the infringing use as it turns out that was a misstatement to some degree that marley coffee wasn't the only product they were making once the litigation started actually started looking toward creating a jam in java coffee employee time hours to create a new brand that just that because we weren't able to separate that brand from the rest of the work on that marley coffee the district court said we couldn't prove what our profits were and entered the word saying tend to do that the cases cited by the plaintiffs those are all cases where there's a direct competitor relationship and that and that matters because those cases you can have an actual argument for why it might be difficult to prove your actual damages how much money did that did your competitors and therefore how much money did you lose but but here the party used at arm's length negotiation with counsel entered into licensing agreements where they agreed that the actual damages would would be three percent of all calmed down just what that was what the revenues going to be indicated that you thought that profits were were what was left over at the summary judgment decision here and that he did state that in a status conference but i think that he was referring to subsection one of the lanham act here which is where actually says profits in the statute in order for them to get to that they need to show willfulness so it wasn't a concession that they're entitled to a money award it was a concession that this is the next step in the litigation process we're going to go look at what the damages  a requirement for willfulness under section moments of n one but alternatively whenever you once you can get actual damages or get profits through actual damages without showing up with us and that to me that's an absurd result of the statute h made to support this was the jama java was the only work they were doing if that's they even had been truthful there would have been no need to show specific offsets about profit because there were there were there was no profit the s e c filings that it's it was difficult to prove fifty six hope roads damages and so we need to i'm up with a proxy for those damages and for that proxy we're going to look at the actual look to profit is it made then it is not damag seems to me that they took a risk a tactical decision to go for the big win which is this two point four million dollar win without arguing mentally that they should least be entitled to a smaller percentage percent of the royalty contract in making that title decision to  correlation between the revenue and their actual damages because we have to start with statutory language statutory language subsection two says actual damages and the case law requires that there be a some some level fit between the actual case starting with lady penn which you know i will acknowledge that those cases allow for you to calculate profits in cases where you're a direct competitor but there's no direct competition here and because of  that they need to show that there was some connection to those two the revenues that correlated to plaintiffs injury and they didn't show that time and i would i would like to point out one thing too that they pointed out in their brief just for the course attention that we page twenty five of our brief i cited to mccarthy trademarks for the proposition the courts allow trial court merely openly asked both parties what do you think the measure of damages ought to be and mr francisco very clearly stated to the court that the measure of damages he said the right damages number and i quote at the record at page eighty three the right number the right damages number which under the law is essentially profits and so it's just a matter of the parties working through the documents to get what the right number is in terms of the profit attributable to the use of the mark in addition even when mr hall good was involved the court again i trust the issue of were propre a measure of damages and in that case essentially mr hoggart also admitted that wilfulness was not a requirement when you're looking at profits and so and that is at the how then is it to be assessed and mr hall good replied well the case law is murky your honor on this issue but in essence it appears that in the sound discretion of the trial court's judgment the reason that this is important is that the court then time three months to go and do discovery on what damages should be and all of our energies all of them were focused on profits now if there had been an issue of whether there's a question of willfulness we could have done discovery on willfulness but we didn't because everybody had agreed on the court says repeatedly everyone here agrees that that pro is the correct measure of damages and in fact and in fact my favorite brand agrees to a wrong statement of law i don't think it is wrong statement of why so i mean usually  before it terminated the contract now the jama java was not making coffee it was not distributing coffee they were simply a middleman they were sublicense ing to various compan and once we terminated the contract and that was when the the measure of damages took place our measure our appropriate measure of damages is essentially their profits because we could step into their shoes which is exactly what we did eventually but during that time period we couldn't see because they were making selling copy exactly they were just sub licensors you could of which we could have done and which we have now done we have stepped into their shoes and so our measure of damages was is essentially what they made the fact that they were bankrupt during this time well there's a question about whether they were bankrupt ok and the other thing really like the court to understand is that what they owed us previously were actually royalties and it wasn't guaranteed minimum and so they had been collecting this money as  f the prior to terminations that actually belongs to us whatever that percentage wise and they spent our money essentially without telling us but after that period of time what they owed us was money that was attributable to the profits of marley coffee the other point i'd like to make your honor is that mr hogg and statement that it was only after the litigation ensued that that they started selling and developing jama java coffee is not true if you look at the record it shows that they began right in saying and distributing and marketing jammin java coffee the competitive coffee way back in november of two twenty fourteen so what we discovered along the lines along this period of time is that mr trans statement that the only thing they did was marley coffee was simply  and he was there during that time he was actively involved from november twenty fourth team all the way through this trial as always through this litigation proceeding so he should have known and he was in essence misleading us and misleading the court and we submitted that happens to the court now when you're talking about profits our job our burden was only to show what the revenue is worth and frankly we simply took jam revenues we did an audit we didn't argue we said ok here are the revenues now the burden shifts to can you show that there's expenses and offset and they didn't even try they had that one decoration from mr tran who basically said well everything everything is merely coffee which we just proved so they didn't they simply didn't meet their burden and the court really could do nothing but rely on that the court once he found that mr tranced declaration was untruthful the court didn't have the power to then figure out what the expenses could have been because there is no evidence in front of the court was no evidence presented to us they could have we spent three months going through that through these documents and you know we did raise with mr francisco well you know which of these expenses were attributable just to marley coffee and not to other aspects and we never come the answer to that and there's not much that we can do or the court could have done in that case so  on the issue of the long winded pen and andrei and a whole host of cases which which continue from those cases so that there are really two ways to prove to obtain the measure of damages profits one is if there is willfulness but separate and apart from that there's this whole could have simply taken over those licenses or issued new licenses which in fact we have done since that time so whatever their profits were was a perfect measure of profits for us and it's not our fault i'm sorry burden to prove their expenses because we had no way of doing that unless your honour's have additional questions i had nothing for them thank you thank you can more is is that you it's difficult to prove damages for the plaintiff and so in certain circumstances where there is direct competitor we will use we will use the profits as a proxy and you know this breathing correctly the there really was no justification ever for why the lindy pen line of cases applied to the plaintiffs that they just sort of took that case linus and said we can use it but there are policy reasons behind the case law to justify getting around