next case that we have this morning which is hard candy versus anastasia beverly hills in this case i understand the eleventh circuit is very judicious with it and we believe that this case presents very important issues on the on the policy side and that there are imperatives here to reverse the district court's finding both on the policy issue of access to a jury trial for plaintiffs in trademark cases and also if this case is allowed to stand as it was ruled on in the district court we think it's going to potentially open floodgates for trademark infringements that as you know from reading the record this case involves our client hard candies well known brand in the cosmetics feel they've been around for decades the five years prior to the trial they've done two hundred million dollars in business under it and the competitor  honesty asia that's finnan here used our clients hard candy mark the identical mark on a competing product the cosmetic product the dish a court found on s y judgment that there were that our mark was strong that it was used in the same exact trade channels on very similar or identical products and yet the district court found that confusion was unlikely so because of really the exceptional nature of it we do think that there are serious policy implications let's start with the seventh amendment claim yes  out for damages they that the defendant then moved to strike the jury and the district court agreed striking the jury well we we would urge the eleventh circuit overturn that and to adopt a an approach that has been adopted by several just your course that we we have cited to our papers it has what is it that you were doing when you went into that stipulation when i looked at the you correct you said you were entitled to all of that specifically with respect to the equitable things you sought you certainly sought injunctive relief and you s an accounting then you enter into a stipulation during the course of the summary judgment debate where you say and i quote plaintiff hard cand stipulates it is not seeking actual damages or loss profits instead plaintive seeks to recover defendant anastasia's profits from its sales of a cosmetic product what did you mean when you said you were in seeking actual damages or lost profits what were you giving up under the law not you can pursue actual damages i understand what the lanham act says what did you specifically believe you were giving up by doing that we were giving up pursuing actual damages to our client actual damages might be measured in this lanham act way in the form of say lost sales by you lost profits a los like you perhaps harm to your market reputation something like that correct you're and you were giving all of that up to it we were giving up only the individual claims the specific things that i'm asking guess you were giving up any claim that you had lost profits lost sales diminished sales market reputation harm the fact that you had to drop your price because of what they did you gave all of that up didn't you know i don't think so your honor what we gave up was a very specific claim one of the lanham act for actual damages or what an actual damages on the lanham act include among other things loss from sales or all of the revenue lost on account of the actor's misconduct that would be included wouldn't that could be included but what's unique about the your honor is that it allows more than one way for a plaintiff to prove it so you can prove it by getting an expert who says you lost sales you lost license fees but it is recognized in the lanham act and by case law that's developed around this it is extremely difficult in a trademark and there is no question that you have the remedy of seeking disgorgement seeking an accounting correct all i'm asking about is whether that is different in kind even if it serves as a proxy for actual damages whether it is different in kind from actual damages which you stipulated away i believe so it is different in kind because it is a it is a different remedy under the law and that and i do not believe that counsel at the court level was surrendering that right and in the record it's very clear regardless of what we were stipulating away yes but then but that doesn't answer the question that's i'm sorry i doesn't answer the question of whether an accounting and a disgorgement amounts to an equitable form of remedy or a legal form and i and i don't know that it's enough to just say well it's easier to prove the one than the other therefore we gave up  other and we're still entitle to a jury i don't i i don't think that that's the way the these cases read here are there is a special exemption because of the difficulty in a lot of acts so when you elect as a proxy theory to pursue the disk or judgement of profits as a proxy for damages there are several courts around the united states that we've cited say that then read that as a legal claim not an equitable remedy and the first circuit has even said that that  is absolutely the best way to read it particularly in the context of what the end result is or if if the if plaintiffs in trademark cases and that's why this is important policy for policy implications if plaintiffs are to take advantage of this remedy the special remedy that's granted by law to mack to ease the burden on the innocent party that has been infringed the what do you understand in accounting to be in accounting of profits it can be we are asking for an accounting from the defendant correct what were you asking them to do it well there are different forms of accounting under the land in africa so we could be accounting for their profits that and that is essentially what has gone on here right whatever their just for deterrence sake but and two of those three courts have considered them to be equitable remedies but if what you have is what you have here that is directly competing products we would say that it's much akin to the black and decker case that we've cited sue and in those instances the courts will see this as a legal not an equitable remedy it's a substitute for pursuing a damage claim based on the harm to to the plaintiff does that answer your question you're on i understand your position yes ok so what i'd like to do is just very briefly because i only have a minute left there the underlying holding here was also erroneous we believe on the on the issue of both likely confusion because again we had identical goods and identical identical use of the marks and the the court nevertheless f use of the of this hard candy designation as a shade name but there was no there was no evidence to support fair use because in order to have fair use you have to look at consumer perception the court never looked at that issue at all there's nothing in the record about consumer perception it was all about whether or not the the explanation was credible that the that the defendant offered namely that this hard candy was supposed to describe the sheen or the shade of of the makeup at issue i see that i'm out of time now where you go right ahead ok so the the next issue is on the likelihood of confusion and there again there's the seven factors and the eleventh circuit four of them with our client prevailed on and on at summary judgment so we were found to have a strong mark then the goods were proximate the advertising was proximate and then when you get to the three that were decided against the clients it was it was lack a lack of evidence of actual confusion but that the key on that is the court relied on it and said that it was very important evidence that we had failed to come forward with at all me why the district court clearly erred in her findings as the ones that cut against you specifically where is the clear error in the district court's determination and weighing of the intent and actual confusion fact it was not enough for me to say if i were the trial judge i might have agreed with you got to show she went beyond the goalposts she was really wrong she was she was easy facts i was home close test becomes neutral but the judge said here quote i must give substantial weight substantial weight to the fact the plan of could not prove actual confusion that's at the transcript the twenty three nineteen to twenty three twenty two that  sorry because what i was saying earlier is their failure to come forward with it as a plaintiff the failure to come forward the actual confusion is recognized for in every circuit that that failure is only rendered neutral particularly in the circumstances  only have eight months to sales us is like a flash sale so the only time that i've ever seen a court say that lack of actual confusion is a factor to be counted against against a plaintiff is if you have long term years and years of coexistence in the marketplace without confusion that in some circumstances the court will weigh the factor but here after eight months that that's clear in my in my view that's clear reversible legal are she she much  overvalued the lack of evidence do you think that she was not even permitted to consider that factor or do you think that she overweight that factor no it's clearly one of the seven factor she must consider it but once she has ruled that there is a lack of it not only consider it it is among the most important of the factors to be considered isn't that right it's a church that is a very tricky point your honor it is one it is absolutely the most important evidence if a pla the evidence however is never given any weight in less like i said it's a much longer term so that they are saying never given any way that's different than she ever weighed it are you saying that she wasn't allowed to consider that at all or that she waited to have really she couldn't consider it to our detriment your honor that that's that's i mean she couldn't consider it at all no because she has to consider it as you said your honor if if she has to i don't know what it means than to say she couldn't consider it to our detriment because she has to consider it she has to inquire about whether there is actual confusion once the conclusion is that there is no actual confusion that she is not allowed to weigh that against us if she had found actual confusion she would be allowed to weigh that in our favor that's the clarity of the case law on it it's only to be weighed in favor of a plaintiff difficult do you have a case that says it is only to be weighed in favor of plates ever is that just what you draw from the cases i don't know that i have that specific case i can't find one certainly not normal and if you can find one for me or a statement i'd be much more we should have zero zero absolutely we i we can submit a letter brief on that no no no is there any case you can but that is clearly the weight of the case law it's when you're reading that language that says it's one of the most important factors that is true if you do seven ends of actual confusion but only in that and only in that instance i'm cognizant of my of beverly hills the district court committed no air we had a full trial just a court heard all of the evidence from both sides she way that evidence completely within a broad discretion as the fact finder what's happening now is the appellant wants a do over either literally by trying the whole case over again to a jury even though they don't have a right to it or by asking you to essentially retry the case on appeal by just substituting your judgment for the fact finders either way it's a second bite at the welly saying more than that he's saying that the district court committed errors of law in so far as she considered the facts presented and among the cites is in error about how she looked at this question of actual confusion he says the record was neutral it was no evidence one way or the other and therefore she could not count that against his client you don't say that your honor and he says that's an issue of law and that's a fatal mistake in the in our at least on the wrong of the actual confusion that's his claim correct he says that he does concede that this is clearly a review i don't think he's seeking to know over a view on that point but to the substance of your question and judge grant yours as well that is not the law this court weighs actual confusion lack of actual confusion in the defendant's favor all the time the f i you case from two years ago lack of actual confusion weighed in the defendant's favor a more recent case than that which is not in our brief but i'll mention it superior consulting versus sha at seven ten federal appendix eight fifty not only did this this was affirming the denial of a preliminary injunction not only did this court give weight to the lack of actual confusion in the defendant's favor it actually gave that factor the greatest weight published case from this court yellowfin yachts versus barker but works this case came out as we were filing our brief eight nine eight f third twelve seventy nine again that the court talked about the lack of actual confusion it was about a two year period and weighed that in the defendant's favor and you can find plenty of other cases from from this court and other courts doing that if you're interested in some cases is there any case law out there suggesting the opposite the obvious proposition that is th you can't consider it if it's if the record is boring i'm not aware of any i'm not aware of any particular case to that no your honor you hear sometimes plaintiffs argue that and i think it's wrong under the law because cases do courts do it all the time  also provided the court he mentioned the time period a case involving walt disney seven three six f subsecond six eight nine the product was out for eight months the southern district of new york gave that a lot of weight that there was no actual confusion even though it was only eight months so there's plenty of precedent for doing it there's even precedent for doing it on a time period comparable to this one where the court prefer me to continue on the merits issues or would you like to take it anywhere you want yes your honor then the jury demand first so we lay out in our brief there's a lot of different ways you can affirm on this issue and i think it really just depends on how narrow or how broad you want your opinion to be and whether you want to reach this unnecessary se question the easiest way to affirm on the jury demand is just to look at the record they have done a complete one eighty on the issue of damages between the trial court and now when we're in the trial court they emphasized that every possible turn that this case was not about damages or harm to them for one judge marcus as you alluded to the stipulation where they waive their entire damages claim and it's not just that they waive their entire damages claim and you listed some of the theories that would be subsumed in that there also others things like corrective advertising that's a damages theory that they would have waived there but it's not just that they waived to claim it's the context in which they waived it as counsel said they waived it to avoid responding to our summary judgment motion on damages they didn't think they were waving it they didn't think they were waving at your honor they still said they wanted a jury trial they said given what they were asking for that is to say disgorgement they they believe that to be a legal remedy not an equitable one i'm sorry when i said they waived it i'm referring to the damages claim which they explicitly waived or they waived actual damages there's no question about that direct but they didn't waive the theory that they were entitled to a jury on disgorgement they claim that in this context that was legal not equitable and therefore they were entitled to a jury if you claim that yes so where's the waiver well this is the most narrow way we could dispose of this and  answering whether the seventh amendment applies or not here is to simply say they didn't preserve that issue well that's right that's right your honor because this nats why i'm asking what is it that they did say that lead you to the conclusion they didn't preserve it other than entering the stipulation so it's everything they did for the rest of the case after the stipulation they spent the rest of the case repeatedly and affirmatively confirming to the district court that they were not arguing harm which is what they're telling you they're arguing now they a motion in limine day and which they said damages are relevant well you know it's all how you phrase it what they say is we want to use the proxy proxy is this court's mint and we think we're entitled to do a jury on that well that's what they're saying let me refer you to other things that disprove that then two other things in the record just talking about whether you can dodge the question on the theory that they didn't come close enough to raising the argument i think that it was really can your honor i think you can absolutely to use your words dodge the question let me point you to other things in the record that would support that the proposed findings of fact and conclusions of law they filed this is in your supplemental appendix document one twelve and the key paragraph is paragraph eighty this is where they told the district court why they should get discouragement of our profits it's a two sentence paragraph and the first time it says it is well settled that a plaintiff need not demonstrate actual damage to get profits so there they are emphasizing again it's not about harm then the second sentence and this is maybe even more important the second sentence of that paragraph is where they gave the district court there are three grounds for getting our profits the three grounds they gave were willful infringement unjust enrichment and deterrence that's it nothing about damages nothing about the theory you just referred to judge marcus they gave her three grounds in the proposed findings they filed two months before to make about the question slightly differently we've said that there are precedents clear that a new claim or issue may not be raised on appeal however a new argument relating to a preserved claim may be reviewed so that helped us any i don't think it does your honor and there's two reasons for that well i should say does that help help us it doesn't help them i would help the court in resolving the question is what i meant ok sorry then i misunderstood no i mean yes you can use that as another it's i think it's an independent basis to not reach the issue because they did not raise this argument below what they briefed to the district court is fundamentally inconsistent with what they're arguing to you they told the district court that discouragement is an echo of legal remedy always not sometimes not it depends they said is that's in their brief to the district court and they said it is a legal remedy because of the text in structure of the land and that that's a direct quote from their district court briefs what they're telling you now of course is it depends but based on what they said below it can't depend if  a legal remedy under the text and structure of the lanham act which it's not by the way but that's what they argued and it can't depend so there are inconsistent legal theories and because of that as you know they stay completely away from their district court brief and they focus on the hearing and they made these few passing remarks at the hearing to this theory but please keep in mind the district court came in that hearing having read their brief she actually said if the hearing i've read your brief several times i want to talk about the jury demand you know i understand it why don't you go  remedy or a legal one yes your honor the legal question which again we don't think you need to reach but moving on to that question if you if you do reach it we still win no circuit has ever adopted their position barely in the district courts have adopted their position and in contrast many circuits have said discouragement is equitable so they won't say it but they're asking you to create a circuit split on this issue and that's i think a very tough sell to begin with just in general but they're not even giving you a good reason to do that this minority legal position they offer is based on a misreading of the supreme court's dairy queen case and it's not just me saying it's a misreading what i think is not all that important this court has said it's a misreading and that was in phillips v capitalists and we briefed philips we brief that below and they have never substantively responded to it is the governing authority from this court on how to read the dairy queen decision there's another problem on the legal side of the argument judge marcus i believe you alluded to this in the  their argument does is it collapses the distinction between what are supposed to be two separate remedies damages and discouragement are not the same thing they're listed separately in the land and that they develop separately historically in two different english court systems of course damages in the courts of law and disorder in the courts of equity their position basically treats them as the same because if they're right every plaintiff can just say you know what i waive my whole damn just claim but your profits are my damages and there's no distinct to circuit cases you're referring well i think i think what i just said is one of the reasons are persuasive because the any other conclusion or at least the position they offer collapses the distinction between the remedies discouragement damages are not the same and this decision from the sixth and the ninth respect that because in those cases the plaintiffs did not have a damages claim and the court didn't sort of treat discouragement as a damages claim it recognized that there are two different entities that have developed separately historically also i just think the sheer fact that the it's not just those two cases i mean those are the is always equitable the circumstances that they're alluding to is when the plane and interesting there's an observation coming out of the seven circuit in the drama next where the courts has a chemical deemed inherently equitable in cases between partners and all those in particular relationships but in most other cases an accounting was equitable only if the holder was too complex for a jury to understand i'm not sure how true that that's right and i'm not sure that it comes close to answering your question but i do throw it out to you you know i don't think that's a i don't know that that's a correct statement of the supreme court law in this issue i also don't think it's a correct statement of what this court has alluded to in its decisions the supreme court has said many times and you've never answered this question levi strauss case that discouragement is equitable right it was not a jury demand case so i admit it's not the same posture but this court said that and then you go to all the other circuits they've all said it to and then you go to the supreme court and they've said it to look it's an older case  act but i don't know that that matters look at the hamilton brown shoe case from the supreme court they said discouragement is an equitable remedy it was very clear you don't i mean i want to make one of their point going back to the record because i think this is absolutely crucial their trial objections every time we try to examine a witness at trial about their lack of harm they objected and said that's a relevant we're not arguing harm this happened over and over at the trial and we cite several examples in our brief there on page twenty two the most telling one in the one i want to really emphasize came on the third day of trial it's an document one thirty seven page twelve this is when our financial expert was testifying and he said he'd seen quote no evidence of financial or economic harm to the plaintiff and as soon as he said that their trial counsel stood up and i'll quote him directly he said objection relevance harm to the plaintiff is not an element of this case i don't know how you get any more clear than that your honors not only did they repeatedly tell the district court this  about harm they actually use that as a sword against us to try and prevent us from building even more of a record about their lack of harm but now they're telling you of course we were harmed they can't do that they can't have it both ways and there's also just the basic evidentiary problem for them on this issue there's no evidence they were harmed in the record at all there's no evidence my client's conduct caused them any harm there's no evidence that my client's profits on this product about three point one million dollars could in any way realistically serve as a proxy for damages and you contrast all of that i just told you to their case black and decker from illinois it basically constitutes their entire argument on this issue or at least most of it black and decker it's not the law first of all but it wouldn't help them even if it were the lots completely different first of all i don't want to get too in the weeds of black and decker but i will mention the plaintiff there had a damages claim all the way through trial the court in black and decker mentioned that in the jury demand opinion and if you have to go look at the docket for some of this stuff but i'll give you the docket numbers the defend their move for summary judgment on damages like we did what the plaintiff there did was the opposite instead of waiving the claim they came forward with damages evidence opposed the summary judgment motion and won so they kept their damages claim in the case of black and decker it's documentary ninety three a black and decker if you like to go look at that complete opposite of what this appellant did and also because the plaintiff there successfully oppose that summary judgment motion the pretrial order had a damages claim that's documentary one ninety six and black and decker so again totally different from this case and those are just the procedural differences there's also the evidence or the difference you and i see that i'm out of time so i don't want to run over the clock so thanks very much if you  the absence of evidence of actual confusion could be said to indicate is that the record does not contain any evidence of actual confusion on of the parties so i thought i think whether the court weighed it or waited to have only it's clear from the quote that the court used that there was this was a play to havea role in her decision and then in terms of the jury decision you know they've argued that we waived it but i read you this this quote from the district court hearing on it this is our counsel the law recognizes that in these situations it is very hard if not impossible to establish actual losses by the plaintiff so you l the defendant's profits with the presumption that those would have been sales the plaintiff would have made otherwise and those profits in essence become a substitute measure for the plaintiffs damages that is why in my view is a hybrid situation so at the hearing it's very clear to me that this was put squarely before the district court there was no waiver in the stipulation there was no waiver at the hearing and as far as what went on in terms of conduct at the trial i think at the trial it becomes irrelevant particularly in light of the fact that it when you're using this type of proxy theory like the daisy group case very newport news there there was no evidence that the defendant had lost sales i'm certain of the plan to have her do you have a requirement to show any harm at all i understand there's a it's very hard to get specific on the damages but do you did you need to show any harm at all to preserve this argument no i think i what i think we had to show if you read that if you read the cases and how these get decided for example in that first circuit case where they said they thought that this is the best this is the best interpretation of the seventh circuit but they elected not to use it because it involves reverse confusion so what you needed to show was what we did show on summary judgment that is that you've got products in the marketplace that are competing like in the black and decker case they don't have to be on the same shelves if they're competing and they're and they're in direct direct competition with each other then you have a theory for it for the proxy theory of taking away the profits as damage and that and that's how these cases read your honor so do you have to prove actual harm no because then it would be it would be circular it's so difficult so the presumption is in that in that case a jury or a fact finder would weigh did did the client lose sales as a result of the fact that the infringement occurred in the same trade channels and  hamilton hsu and i want to reference it to you to seek your thoughts about it we're talking about trademark case there you're familiar with the case yes your honor and it's very interesting what the it says and i quote the right to use a trademark is recognized as a kind of property of which the owner is entitle to the exclusive enjoyment to the extent that it has actually been exclusive actually been used the infringer is required in equity to account for and yield up his gains to the true owner upon a principle analogous to that which charges a trustee with the profits acquired by wrongful use of the property of the of the trust court says with great clarity that the accounting which is understood and historically there is no question if you go back early in time to equity accounting is generally understood to include an accounting of his profits and the disgorgement of them the supreme court the infringer is required in equity to account for and yield up as gains to the true owner to yield up the gains to disgorge that's what we're talking about there suggests  answer it's before we have codification it's an early case but it explains the theoretical foundation behind suggesting that disgorgement and accounting are equitable in nature they could be legal depending on the context but in this context the suggestion is it's more than a suggestion the statement is it is equitable in nature what am i to do with that i think honestly you can i don't wear that case because it it certainly does and what specifically the supreme court's tells us when we look at the seventh amendment to determine whether there is a right to a jury we are required to go back in time go back to the common law and see whether originally this kind of claim was understood to be the kind of claim that gave you a right to a jury i think that's part of the analysis but then you have to look to the statute and the statute here specifically creates an easing of the burden on the plaintiff and you would concede would you not that hamilton shoo shoo certainly says i counting and giving up the wrongful property is equitable in nature that's indisput dairy queen stands for but i would stand by the first circuits visible systems corporation system decision where they say in our view this proxy rationale well may well present the strongest argument under the seventh and you don't think that in dairy queen the supreme court was looking at a legal claim for damages arising out of a breach of contract your honor i've read that case probably twenty times and i have no doubt and i i i'm sure that my view is colored by what i represent here but i i believe that the way that that case should be read is the supreme court ended up granting a jury to to the to the complaining park and the reason is what we're asking that i did they granted lottery i understand and my read of it is that it should it should be interpreted as the first circuit has interpreted as several states or courts have interpreted it i am surprised that there is as much case law out there saying that dairy queen doesn't grant a jury right i believe it's a legal remedy and i would say under dairy queen my reading of it is it's a it's a legal remedy for ever and always and it's not just with what don't they say the following the most natural construction of the respondents claim was for a money judgment that is that they are entitled to recover what ever was owed them under the contract lost them it is for infringement of the trademark right plus damages for infringement so that's not that that is not equitable it's legal right what about the first part that's what what about the first part of the statement that i read to you that they are entitled to recover whatever was owed them under so it was it was these two theories going toward granting a jury and what's important to me is the overall function the denial of the jury are supposed to read at every every every remedy against that it's a fundamental right under the seventh amendment what harm is there i think your honor raised that well the jury is competent to decide discords men i have no doubt about that absolutely and i and i think the first circuit really is the one that spoke on this and those cases in the ninth and the six circuit that you alluded to neither one of those rejected this proxy theory the sixth circuit and it's a very strange case because it came out of the district court and the and the remedies were equitable there they were limited by the by the bankruptcy courts lifting of the stay and in the ninth circuit again it the the theory was just not in front of them and i don't think it should have been because as we were talking about i think we understand your point if you could bring your remarks to a conclusion we'd to be straw on identical goods in identical trade channels and a jury should have heard this and it should have come out the other way around or there were there are legal errors on the lack of  granting of a jury on over weighing the lack of evidence of actual confusion over weighing intense and the ferry their fair use just got very scrambled your honor and and we really do believe this should be either reversed completely or remanded for a jury trial thank you very much thank you both thank you very much this court will be