Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_01-cv-06619/USCOURTS-caed-1_01-cv-06619-1/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:78m(a) Securities Exchange Act

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IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF CALIFORNIA

B & H MANUFACTURING )

COMPANY, INC., )

)

Plaintiff, )

)

v. )

)

LYN E. BRIGHT, ByH DE LAS )

AMERICAS, S.A. de C.V., and DOES )

1 THROUGH 10, inclusive, )

)

Defendants. )

____________________________________)

CV F 01 6619 AWI SMS

MEMORANDUM OPINION AND

ORDER DENYING RENEWED

MOTION FOR JUDGMENT AS A

MATTER OF LAW

(Document # 591)

In the third amended complaint, filed on February 19, 2004, Plaintiff raised four causes of

action: (1) False Designations of Origin and False Descriptions in violation of 15 U.S.C. §

1125(a); (2) Dilution in violation of 15 U.S.C. § 1125(c); (3) Infringement of Registered

Trademarks in violation of 15 U.S.C. § 1114; and (4) Breach of Fiduciary Duty. After a jury

trial, on October 8, 2004, the jury returned a verdict for Plaintiff. Pursuant to the verdict form,

the jury awarded Plaintiff $145,000 for Defendant Bright’s breach of fiduciary duty, $501,500 for

Defendants’ trademark infringement, $105,000 for dilution, and $100,000 for Defendants’ trade

dress infringement. Pending before the court is Defendants’ renewed motion for judgment as a

matter of law on Plaintiff’s claims for trade dress infringement and trademark dilution. 

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LEGAL STANDARD

The court may enter a judgment as a matter of law if there is no legally sufficient

evidentiary basis for a reasonable jury to find for a party on an issue. Fed.R.Civ.P. 50(a). 

Federal Rule of Civil Procedure 50(b) provides:

If, for any reason, the court does not grant a motion for judgment as a matter of

law made at the close of all the evidence, the court is considered to have

submitted the action to the jury subject to the court’s later deciding the legal

questions raised by the motion. The movant may renew its request for judgment

as a matter of law by filing a motion no later than 10 days after entry of judgment

- and may alternatively request a new trial or join a motion for a new trial under

Rule 59. In ruling on a renewed motion, the court may:

(1) if a verdict was returned:

 (A) allow the judgment to stand,

 (B) order a new trial, or

 (C) direct entry of judgment as a matter of law; or

(2) if no verdict was returned;

 (A) order a new trial, or

 (B) direct entry of judgment as a matter of law. 

In the Ninth Circuit, judgment as a matter of law is appropriate when “the evidence, construed in

the light most favorable to the nonmoving party, permits only one reasonable conclusion, and

that conclusion is contrary to that of the jury.” White v. Ford Motor Co., 312 F.3d 998, 1010 (9th

Cir. 2002); Omega Envt'l, Inc. v. Gilbarco, Inc., 127 F.3d 1157, 1161 (9th Cir.1997). In other

words, judgment as a matter of law may be granted “[i]f during a trial by jury a party has been

fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to

find for that party on that issue. . . .” Fed.R.Civ.P. 50(a)(1); Juhnke v. EIG Corp., 444 F.2d 1323,

1325 (9th Cir.1971) (noting that directed verdict and motion for judgment notwithstanding 

verdict “are measured by the same standard as the latter is merely a renewal of the former”).

In considering a motion under Rule 50(b), “the court is not to make credibility

determinations or weigh the evidence and should view all inferences in the light most favorable

to the nonmoving party.” Winarto v. Toshiba America Electronics Components, Inc., 274 F.3d

1276, 1283 (9th Cir. 2001); Mosesian v. Peat, Marwick, Mitchell & Co., 727 F.2d 873, 877 (9th

Cir.1984). The court is bound to view the evidence in the light most favorable to the prevailing

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party and to give that party the benefit of all inferences which the evidence fairly supports, even

though contrary inferences might reasonably be drawn. Continental Ore Co. v. Union Carbide &

Carbon Corp., 370 U.S. 690, 696 (1962); Cockrum, 479 F.2d at 86. “The court must accept the

jury's credibility findings consistent with the verdict.” Winarto v. Toshiba America Electronics

Components, Inc., 274 F.3d 1276, 1283 (9th Cir. 2001) (quoting Bilbrey by Bilbrey v. Brown, 738

F.2d 1462, 1468 n. 8 (9th Cir.1984)). When two sets of inferences find support in the record, the

inferences that support the jury's verdict win the day on the appeal of a grant of a motion for

judgment as a matter of law. See Winarto, 274 F.3d at 1287 (“When two sets of inferences find

support in the record, the inferences that support the jury's verdict of course win the day.”) . 

The court “may not substitute its view of the evidence for that of the jury.” Johnson v. Paradise

Valley Unified Sch. Dist., 251 F.3d 1222, 1227 (9th Cir. 2001). 

“A jury's verdict must be upheld if it is supported by substantial evidence.” Johnson v.

Paradise Valley Unified Sch. Dist., 251 F.3d 1222, 1227 (9th Cir.2001). Substantial evidence is

evidence that is adequate to support the jury's conclusion, even if it is possible to draw a contrary

conclusion from the same evidence. Id. 

DISCUSSION

Defendants contend that they are entitled to judgment as a matter of law on Plaintiff’s

claims for trade dress infringement and dilution. Plaintiff contends there is no basis for

disturbing the jury’s findings on trade dress infringement and dilution.

A. Trade Dress

Defendants contend that they are entitled to judgment as a matter of law on Plaintiff’s

trade dress infringement claim because Plaintiff did not establish that Plaintiff’s product

configuration was functional, Plaintiff failed to present evidence of a secondary meaning

associated with any non-functional trade dress, and Plaintiff failed to present evidence of

damages caused by infringement of a non-functional trade dress.

In the Ninth Circuit, trade dress “refers to the ‘total image of a product’ and may include

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features such as size, shape, color, color combinations, texture or graphics.” International

Jensen, Inc. v. Metrosound U.S.A., Inc., 4 F.3d 819, 822 (9th Cir. 1993); Vision Sports, Inc. v.

Melville Corp., 888 F.2d 609, 613 (9th Cir.1989). To establish trade dress infringement, a

plaintiff must show (1) that its product design is non-functional, (2) that the design is inherently

distinctive or has acquired a secondary meaning, and (3) that there is a likelihood of confusion. 

Disc Golf Ass'n, Inc. v. Champion Discs, Inc., 158 F.3d 1002, 1005 (9th Cir.1998);

Kendall-Jackson Winery, Ltd. v. E. & J. Gallo Winery, 150 F.3d 1042, 1046-47 (9th Cir.1998);

International Jensen, Inc. v. Metrosound U.S.A., Inc., 4 F.3d 819, 823 (9th Cir. 1993). Because

affording trade dress protection to product designs may hinder legitimate competition, the Ninth

Circuit has advised district courts to evaluate such claims with greater scrutiny than claims

involving other forms of trade dress. Leatherman Tool Group, Inc. v. Cooper Indus., Inc., 199

F.3d 1009, 1012-13 (9th Cir. 1999).

1. Non-Functional

The requirement of non-functionality is based “on the judicial theory that there exists a

fundamental right to compete through imitation of a competitor's product, which right can only

be temporarily denied by the patent or copyright laws.” Leatherman Tool Group, 199 F.3d at

1011-12. Product features are functional if they are “essential to the use or purpose of the

article or if it affects the cost or quality of the article, that is, if exclusive use of the feature would

put competitors at a significant non-reputation-related disadvantage.” Qualitex Co. v. Jacobson

Prods. Co., 514 U.S. 159, 165 (1995). A design feature of a particular article is “essential” only

if the feature is dictated by the functions to be performed; a feature that merely accommodates a

useful function is not enough. E.g., In re Morton-Norwich Products, Inc., 671 F.2d 1332, 1342

(Cust. & Pat.App. 1982) (shape of plastic container for spray products not essential to its purpose

as a sprayer). A design feature “affecting the cost or quality of an article” is one which permits

the article to be manufactured at a lower cost, e.g., Kellogg Co. v. National Biscuit Co., 305 U.S.

111, 122 (1938) (pillow shape of shredded wheat biscuit functional as cost would be increased

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and quality lessened by other form), or one which constitutes an improvement in the operation of

the goods, e.g., Fisher Stoves, Inc. v. All Nighter Stove Works, Inc., 626 F.2d 193, 195 (1st Cir.

1980) (two-tier design of woodstove functional because improving the operation of the stove in

three respects). The Ninth Circuit considers four factors when determining whether features of a

product are functional: “(1) whether the design yields a utilitarian advantage, (2) whether

alternative designs are available, (3) whether advertising touts the utilitarian advantages of the

design, and (4) whether the particular design results from a comparatively simple or inexpensive

method of manufacture.” Disc Golf Ass'n, Inc. v. Champion Discs, Inc., 158 F.3d 1002, 1006

(9th Cir. 1998).

Separable functional features may be protectable when used in combination as nonfunctional trade dress. Fuddruckers, Inc. v. Doc's B.R. Others, Inc., 826 F.2d 837, 842 (9th Cir.

1987). A trade dress must be examined “as a whole, not by its individual constituent parts.”

Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1259 (9th Cir. 2001). The leading case

on finding an overall product functional is Leatherman Tool Group, Inc. v. Cooper Indus., Inc.,

199 F.3d 1009 (9th Cir. 1999). In Leatherman, there was no evidence that anything about the

plaintiff's pocket tool, other than the Leatherman name, existed for any non-functional purpose. 

Rather, every physical part of the Leatherman had its particular shape because that shape works

better. Leatherman, 199 F.3d at 1012-13. The Ninth Circuit concluded that because the trade

dress was “nothing more than the assemblage of functional parts, and [that the] arrangement and

combination of the parts is designed to result in superior performance,” it would be “semantic

trickery to say that there is still some sort of separate but 'overall appearance' which is

nonfunctional.” Id. 

In their brief, Defendants identify several components of the B&H2000 machine and

contend that each was functional. Because all of the B&H2000 machine’s identified parts served

a functional purpose, Defendants contend Plaintiff’s trade dress claim fails as a matter of law. 

The Ninth Circuit authority cited above requires the court to reject this “divide and conquer”

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1

 Mr. Dadisho testified the dial indicator and vacuum adjustment valve needed to be

placed together.

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approach. Rather, the court must consider the trade dress as a whole. A combination of

functional elements may be protectable as long as the combination or arrangement is not itself

functional. Clicks, 251 F.3d at 1259; Fuddruckers, 826 F.2d at 842. Thus, the jury could find a

trade dress infringement even if the evidence revealed that all parts were functional.

Defendants next contend that Plaintiffs did not offer sufficient evidence to show the

overall layout of the B&H2000 machine was non-functional. In this case, the court finds that the

evidence submitted to the jury does not only permit the conclusion that the overall layout of the

Plaintiff’s machine was functional. Ed Dadisho testified that the linear machine, look of the

machine, and “the position of certain components to the product” identified Plaintiff’s B&H2000

machine. Mr. Dadisho identified several components on the B&H2000 machine that Defendants

had placed in identical locations on their machine that did not have to be placed in identical

locations. For example, Mr. Dadisho stated that the location of the vacuum adjustment valve

and dial indicator could have been placed in other locations.1 Mr. Dadisho testified these items

could have been placed in different locations without affecting the ease of operation. While Mr.

Dadisho agreed that moving the vacuum adjustment valve to some locations would require

additional hoses, Mr. Dadisho never conceded that all possible locations for the vacuum

adjustment valve and related parts would have been more expensive. Mr. Dadisho also testified

that while vacuum drums are used by all manufactures of labeling machines, different machines

use different designs. Mr. Dadisho agreed with Defendants that all labeling machines needed

vacuums. However, Mr. Dadisho’s testimony provides support for Plaintiff’s position that to be

functional and cost efficient the exact same vacuum drum and parts did not need to located in the

same place as the B&H2000 and did not have to be located in the exact same locations. 

Similarly, Mr. Dadisho identified other parts that were alike on the two machines. Mr.

Dadisho testified that the control switches only needed to be accessible to the operator, but could

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have been placed just about anywhere. While Mr. Dadisho conceded that the switches were

functional and their placement was dictated by the location of other parts, there was evidence to

support a finding that it was not necessary to have the control switches in the exact same location

as the B&H2000. Mr. Dadisho testified that Defendants placed the electric control box and

fault light in the same position as the B&H machine. These two items needed to be placed

together. While the evidence showed placing the control box near operator controls would

reduce the cost of manufacture, there was evidence to support a finding that it was not necessary

to place the box in the precise location found on the B&H2000 machine. There was evidence

from which the jury could find the main frame legs were similarly exposed in both machines. 

While having a machine supported by four legs is functional, exposing legs which look in

appearance to be very similar was not necessary. Defendants also put parts such as the sensor

mounting post and glue mounting post in the same position as on the B&H2000. Finally, the jury

was allowed to view pictures of Plaintiff’s and Defendants’ machines, and could note for

themselves the similarity in the entire layout and look of the two machines. Thus, construing the

evidence in the light most favorable to Plaintiff, the jury could reasonably conclude that the

overall look of Plaintiff’s machine was non-functional.

The evidence does show that in several areas the choices available to a manufacturer are

minimal. For example, machines can only be set up for left to right or right to left operation. 

Label discs can only be placed horizontally or vertically. Given these limited choices, the fact

Defendants’ machine also happened to be set up like Plaintiff’s machine, with left to right

operation and a horizontal label disc, taken alone has little significance. However, in light of

the fact Defendants choose to place so many parts in exactly the same place as Defendants’

machine, the fact Defendants also created a machine that operated left to right and had a

horizontal label disc creates a different circumstantial inference. There was evidence from which

the jury could have found Defendants made these decisions based on a desire to copy Plaintiff’s

machine rather than coincidence. Thus, there was evidence to support the jury’s finding that the

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labeling machines did not have to be identical and the B&H2000 machine did not have to be laid

out as it was to be utilitarian. Making all inferences to support the jury’s verdict, the first factor

favors a finding of non-functionality.

The second factor also favors the jury’s verdict. Defendant had alternative trade dresses

available to it. Plaintiff provided evidence that the particular positing of components found on

Plaintiff’s machine and Defendants’ machine is not found on any other linear roll-fed labeling

machine. Mr. Dadisho testified that none of the other linear roll-fed machines on the market that

compete with Plaintiff’s machine have the same look and feel as the B&H machine. The jury

was shown a picture of the Trine 4500 roll-fed label machine. Mr. Dadisho testified that the

differences in the layout, placement of parts, and dimensions of the Trine machine distinguished

the look of the Trine machine. The jury was also given the opportunity to view the Polyclad

machine. The jury was given evidence that at least two other competing manufacturers of rollfed labeling machines designed their linear machines in a manner that was not identical to

Plaintiff’s machine. Thus, making all inferences in support of the jury’s verdict, a finding of

non-functionality is supported by the fact there were other designs available.

The third factor does not require a different result. “If a seller advertises the utilitarian

advantages of a particular feature, this constitutes strong evidence of functionality.” Disc Golf,

158 F.3d at 1009. Here, there was no evidence that the overall look and feel of the B&H2000

machine was ever advertised as functional. 

Finally, the court does not find the jury’s verdict contrary to the fourth factor, which looks

to whether the design was a result of a simple or inexpensive method of manufacture. A trade

dress may be functional where it “achieves economies in manufacture or use.” Disc Golf, 158

F.3d at 1009. There was evidence to show that the parts on the B&H machine were not all

arranged to provide “economies in manufacture or use.” As discussed above, evidence was

presented at trial that all roll-fed labeling machines require similar parts. However, evidence was

presented from which the jury could have concluded that all of the B&H2000's parts did not have

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to look similar and be placed in nearly identical locations on Defendants’ machine. Thus, the

court does not find that the only reasonable conclusion from the evidence was that the entire look

of the B&H2000 was functional. 

2. Secondary Meaning

 Defendants next contend that Plaintiff presented no evidence to establish that its machine

had a secondary meaning. Trade dress must be distinctive to be protectable. A dress is

“distinctive and capable of being protected if it either (1) is inherently distinctive or (2) has

acquired distinctiveness through secondary meaning.” Two Pesos, Inc. v. Taco Cabana, Inc.,

505 U.S. 763, 769 (1992). If a trade dress claim involves the design of a product rather than its

packaging, the party asserting its rights must establish that the trade dress has acquired secondary

meaning. Wal-Mart Stores, Inc. v. Samara Bros., Inc, 529 U.S. 205, 215 (2000). As such, in

this case, it is unnecessary to determine whether Plaintiff proved its trade dress was inherently

distinctive.

Trade dress acquires secondary meaning when “in the minds of the public, the primary

significance of a product feature . . . is to identify the source of the product rather than the

product itself.” Qualitex, 514 U.S. at 163 (quoting Inwood Labs., Inc. v. Ives Labs., Inc., 456

U.S. 844, 851 n. 11 (1982)). Factors courts consider in determining secondary meaning include:

(1) whether actual purchasers associate the dress with the source, (2) the degree and manner of

advertising by the party seeking protection, (3) the length and manner of use of the dress, and (4)

whether the use by the party seeking protection has been exclusive. Clamp Mfg. Co. v. Enco

Mfg. Co., 870 F.2d 512, 517 (9th Cir.1989).

A plaintiff may establish secondary meaning through direct and circumstantial evidence. 

See 2 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 15:30 (4th ed.

2005) ("McCarthy"). Direct evidence, such as consumer surveys and direct consumer testimony,

often provides the strongest evidence of secondary meaning. Levi Strauss & Co., 778 F.2d at

1358. A plaintiff may also establish secondary meaning through circumstantial evidence, such as:

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exclusivity, manner, and length of use, amount and manner of advertising, amount of sales and

the number of customers, and plaintiff's established place in the market. Filipino Yellow Pages

v. Asian Journal Publications, 198 F.3d 1143, 1151 (9th Cir.1999); Clamp Mfg. Co., Inc. v. Enco

Mfg. Co., Inc., 870 F.2d 512, 517 (9th Cir. 1989); McCarthy at § 15:30. Evidence of deliberate

copying may, in appropriate cases, support an inference of secondary meaning. Fuddruckers, Inc.

v. Doc's B.R. Others, Inc., 826 F.2d 837, 844-45 (9th Cir.1987).

Viewing all evidence in the light most favorable to Plaintiff, the court finds a reasonable

jury could have found the B&H2000 machine’s trade dress had obtained a secondary meaning. 

Plaintiff provided minimal, but some, evidence that purchasers associated Plaintiff’s trade dress

with Plaintiff. Ed Dadisho testified that customers had told him they could identify a B&H

machine from the look of it. Plaintiff also provided evidence from several witnesses that the

BH2000 machine was a good selling and popular machine, indicating it was well known in the

relevant marketplace. The length of time B&H used the trade dress of the B&H2000 also

supports the jury’s finding of secondary meaning. B&H used its dress in the shape and look of

the B&H2000 since the early 1980's. This length of exclusive use of the B&H2000 is evidence

of secondary meaning. See 15 U.S.C. 1052(f). Plaintiff itself and through ByH Mexico, when it

was Plaintiff’s distributor, achieved a measure of success in the roll-fed labeling machine

business in Mexico. Defendant Bright testified that the BH2000 machine was proven and

enjoyed high confidence from customers. Making all inferences for Plaintiff, this evidence was

sufficient for the jury to find Plaintiff’s trade dress had secondary meaning. “Evidence of use

and advertising over a substantial period of time is enough to establish secondary meaning,” 

Clamp Mfg. Co. v. Enco Mfg. Co., 870 F.2d 512, 517 (9th Cir. 1989). 

As further evidence of secondary meaning, Plaintiff presented evidence of intentional

copying. Evidence of deliberate copying may, in appropriate cases, support an inference of

secondary meaning. Fuddruckers, 826 F.2d at 844-45. Miguel Garcia Sanchez testified that he

witnessed employees of ByH Mexico disassemble a BH2000 machine and take measurements for

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the purpose of building a new machine. Mr. Garcia Sanchez was instructed to take Plaintiff’s

BH2000 manual and identify new part numbers for the assembly of the new machine. The new

part numbers were to be placed in the manual that was being made for Defendants’ machine. 

David Bojorquez, Defendants’ General Manager, testified that the BT2000X was not designed

from scratch, but was designed from a BH2000, with minor modifications to certain components. 

With some minimal exceptions, even Defendant Bright admitted that the BT2000X is

“essentially” a BH2000 with modifications. 

The evidence supporting a finding of secondary meaning was minimal. However, the

court cannot find it was so lacking that there was no legally sufficient evidentiary basis for a

reasonable jury to find Plaintiff’s trade dress had a secondary meaning. 

3. Damages

Defendants contend that Plaintiff failed to establish causation between Defendants’

machine sales and Defendants’ trade dress infringement. Where a plaintiff establishes trademark

infringement, the plaintiff is entitled to an award, “subject to equitable principles, of ‘any

damages sustained by the plaintiff.’” Lindy Pen Co. v. Bic Pen Corp., 982 F.2d 1400, 1407 (9th

Cir.1993) (quoting 17 U.S.C. § 1117(a)). “Damages are typically measured by any direct injury

which a plaintiff can prove, as well as any lost profits which the plaintiff would have earned but

for the infringement.” Id.; McCarthy §§ 30:72--30.74. Although damages in trademark

infringement actions need not be calculated with “absolute exactness,” there must be a

reasonable basis for calculation of damages. Lindy Pen, 982 F.2d at 1407 (quoting Eastman

Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, 379 (1927)). 

The evidence supports a finding that Defendants caused damages to Plaintiff. While

Plaintiff provided limited evidence on this point, there was evidence that consumers were

confused by Defendants’ use of a similar machine. For example, Patty Mazeriegos testified

about a customer who bought one of Defendants’ machines, not realizing that it was

manufactured in Mexico by Defendants. Further, the jury was only instructed that they needed

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2

 Ordinarily, when a party files a procedurally flawed Rule 50(b) motion, the challenge

to the jury's verdict is reviewed only for plain error and reversal is proper only to avoid a

"manifest miscarriage of justice.” Graves v. City of Coeur D'Alene, 339 F.3d 828, 838 (9th Cir.

2003).

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to find a likelihood of confusion. When an infringer knowingly adopts a mark, the court can

presume the public will be deceived. See AMF, Inc. V. Sleekcraft Boats, 899 F.2d 341, 354 (9th

Cir. 1979). Thus, making all inferences in Plaintiff’s favor, a reasonable jury could find

Defendants’ trade dress violations caused Plaintiff’s harm.

Defendants also contend that no evidence supports the jury’s damage amount. 

Defendants point out that Plaintiff’s own expert only provided the jury with total damage figures

and did not provide the jury with an amount of damages attributable to trade dress infringement.

Defendants take issue with Plaintiff’s attorney’s suggestion in closing argument that the jury

award damages based on a twenty percent profit for each infringing machine. Defendants

contend that Plaintiff failed to present any evidence concerning a profit margin relating

exclusively to BH2000 machines. 

Preliminarily, the court notes that it is questionable whether Defendants preserved this

issue. Federal Rule of Civil Procedure 50 requires that a motion for a directed verdict be made

at the close of all the evidence in order to be renewed following entry of judgment. Zhang v.

American Gem Seafoods, Inc., 339 F.3d 1020, 1029 (9th Cir. 2003); Janes v. Wal-Mart Stores,

Inc., 279 F.3d 883, 886-87 (9th Cir. 2002).2 “By definition, a Rule 50(b) motion is a renewal of a

prior Rule 50(a) motion made at the close of evidence and as such is limited to those issues

raised in the previous motion.” Andreas v. Volkswagen of America, Inc., 336 F.3d 789, 794 (8th

Cir. 2003). A renewed motion on a ground not specifically raised in an earlier motion is barred.

Doctor's Assocs., Inc. v. Weible, 92 F.3d 108, 112 (2nd Cir. 1996). 

A review of Defendants’ Rule 50 motion reveals no arguments concerning the failure of

Plaintiffs to provide a profit margin for the BH2000 machine and an objection to the argument of

Plaintiff’s counsel not being supported by the evidence. However, at the time Defendants made

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their motion, Plaintiff’s counsel had not yet made his closing argument. When preserving an

issue for a Rule 50(b) motion, “[t]echnical precision is not necessary in stating grounds for the

motion so long as the trial court is aware of the movant's position.” Walsh v. National Computer

Systems, Inc., 332 F.3d 1150, 1158 (8th Cir. 2003). Here, Defendants made the court aware of

their objection to Plaintiff’s lack of evidence supporting any damages steming from trademark

violations. While not made in the confines of their Rule 50 motion, Defendants also objected to

Defendants’ counsel’s use of a twenty percent profit margin because it was not based on the

evidence. Thus, it appears Defendants may have sufficiently made the court aware of its

argument concerning the lack of evidence on damages for trade dress infringement.

Regardless of whether Defendants properly preserved their motion, the motion can be

denied on the merits. Judgment as a matter of law is appropriate only if the evidence, viewed in

the light most favorable to the nonmovant, permits only one possible outcome. There was

sufficient evidence from which the jury could rationally reach a damage figure for trade dress

infringement. There was evidence from which the jury could make their own determination of

the gross or net profit margin to be applied in connection with their damage analysis. Plaintiff’s

expert, Mr. Wallace testified that the profit margin on all machines was twenty to twenty-five

percent. Evidence was admitted regarding the number of infringing trade dress sales. The jury

was free to review evidence, such as invoices, from which the jury could conclude the number of

infringing sales. Evidence of Plaintiff’s balance sheets was also admitted. The jury was free to

add Defendants’ infringing sales to Plaintiff’s balance sheets to determine an amount of

damages. The jury received testimony about which expenses were fixed and which were

variable. While Plaintiff and Defendant offered differing testimony as to which expenses were

fixed and variable, it was the province of the jury to arrive at a number representing how much

Plaintiff lost each time Defendants sold an infringing machine. While admittedly no evidence

was admitted that Plaintiff had a twenty percent profit margin on the sale of each B&H2000

machine, the court finds the jury was given sufficient information to have determined an

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appropriate profit margin from which to establish a damage award. 

Defendants’ argument that the jury improperly considered Plaintiff’s counsel’s argument

for a twenty percent base is not supported by the jury’s verdict. Based on Plaintiff’s view of the

evidence, Plaintiff’s attorney argued for $255,000 in trade dress damages. The jury awarded

$100,000 on this claim. As such, the jury used some number less than the 20 to 25 percent

advanced by Plaintiff and made a determination of the profits lost from the sale of each

infringing machine, taking into account both fixed and variable expenses. Thus, viewing the

evidence in the light most favorable to Plaintiff, a possible outcome is the jury’s damage award

of $100,000 for the trade dress claim.

B. Dilution

Defendants contend that they are entitled to judgment as a matter of law on Plaintiff’s

dilution claim because Plaintiff failed to establish that its marks were famous and failed to

establish the amount of damages caused by Defendants with respect to trademark dilution. 

Dilution refers to the whittling away of the value of a trademark when it is used to identify

different products. Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894, 903 (9th Cir.2002). 

“Dilution is a cause of action invented and reserved for a select class of marks--those marks with

such powerful consumer associations that even non-competing uses can impinge on their value.” 

Avery Dennison Corp. v. Sumpton, 189 F.3d 868, 875 (9th Cir.1999). Dilution is “the lessening

of the capacity of a famous mark to identify and distinguish goods or services, regardless of the

presence or absence of--(1) competition between the owner of the famous mark and other parties,

or (2) likelihood of confusion, mistake, or deception.” 15 U.S.C. § 1127. Only famous marks are

protected. 15 U.S.C. § 1125(c)(1). 

In this case, the court instructed the jury on the relevant law of dilution. The jury was

instructed as following regarding the elements of Plaintiff’s dilution claim:

The term “dilution” means the lessening of the capacity of a famous mark

to identify and distinguish goods or services, regardless of the presence or absence

of competition between the owner of the famous mark and other parties, or

likelihood of confusion, mistake, or deception.

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To prevail on its dilution claim, the plaintiff has the burden of proving

each of the following elements by a preponderance of the evidence:

1. Plaintiff owns a valid, protectable trademark;

2. Plaintiff’s mark is famous;

3. Defendant is making commercial use of the mark in commerce;

4. Defendant’s use of the mark began after the mark became famous;

5. Defendant willfully intended to trade on the owner's reputation or to cause

dilution of the famous mark; and 

6. Defendant’s use of the mark has caused actual dilution of Plaintiff’s mark. 

The mark used by Defendant must be identical, or nearly identical, to

Plaintiff’s protected mark. 

1. Famousness

Defendants contend that they are entitled to a directed verdict because Plaintiff failed to

establish that its marks were famous. In order to be famous, a mark must be more than

distinctive. Avery Dennison Corp., 189 F.3d at 923. “[I]f dilution protection were accorded to

trademarks based only on a showing of inherent or acquired distinctiveness, we would upset the

balance in favor of over-protecting trademarks, at the expense of potential non-infringing uses.” 

Id. To meet the famousness element of protection under the dilution statutes, “‘a mark [must] be

truly prominent and renowned.’” Id. at 875 (quoting I.P. Lund Trading ApS v. Kohler Co., 163

F.3d 27, 46 (1st Cir.1998)). “Because protection from dilution comes close to being a right in

gross, it is a cause of action reserved for a select class of marks--those marks with such powerful

consumer associations that even non-competing uses can impinge on their value.” Nissan Motor

Co. v. Nissan Computer Corp., 378 F.3d 1002, 1011 (9th Cir. 2004); Avery Dennison, 189 F.3d

at 875. Dilution protection is only given to those whose mark is a “household name.” Nissan

Motor Co., 378 F.3d at 1011; Thane Int'l., Inc. v. Trek Bicycle Corp., 305 F.3d 894, 911 (9th

Cir.2002).

If a mark is famous only to a small segment of buyers, such as professional buyers in a

specialized market (e.g. professional florists) or a distinct subset of consumers (e.g. owners of

pleasure sailing boats) the mark is eligible for anti-dilution protection against a defendant who is

using the mark in the same niche market. See, e.g., Times Mirror Magazines, Inc. v. Las Vegas

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Sports News, L.L.C., 212 F.3d 157, 165-66 (3d Cir. 2000); Syndicate Sales, Inc. v. Hampshire

Paper Corp., 192 F.3d 633 (7th Cir. 1999); Avery, 189 F.3d 868 (9th Cir. 1999). The market

niche should be defined narrowly. Thane, 305 F.3d 894. “[A] mark not famous to the general

public is nevertheless entitled to protection from dilution where both the plaintiff and defendant

are operating in the same or related markets, so long as the plaintiff's mark possesses a high

degree of fame in its niche market.” Times Mirror Magazines, 212 F.3d at 166. 

Title 15 U.S.C. § 1125(c)(1)(A)-(H), lists eight non-exclusive considerations for the

famousness inquiry. The jury was instructed in these requirements. 

To meet the famousness element of a dilution claim, the mark must be prominent

within the relevant market. In determining whether a mark is famous, you may

consider factors such as:

(A) The degree of inherent or acquired distinctiveness of the mark;

(B) The duration and extent of use of the mark in connection with the goods or

services with which the mark is used;

(C) The duration and extent of advertising and publicity of the mark;

(D) The geographical extent of the trading area in which the mark is used;

(E) The channels of trade for the goods or services with which the mark is

used;

(F) The degree of recognition of the mark in the trading areas and channels of

trade used by plaintiff and defendant;

(G) The nature and extent of use of the same or similar marks by third parties;

and

(H) Whether the mark was registered.

a. The Mark's Inherent or Acquired Distinctiveness

“To be capable of being diluted, a mark must have a degree of distinctiveness and

strength beyond that needed to serve as a trademark.” Avery Dennison, 189 F.3d at 876 (internal

cites and quotes omitted). The evidence at trial showed that the marks at issue are registered. 

The Scroll Design logo was registered on March 13, 1990 as a trademark for machines applying

labels to containers and parts. The Scroll Design logo was registered on December 31, 2002 as a

service mark. The ByH mark was registered on November 19, 2002 as a service mark. The

B&H mark was registered on October 1, 2002 as a service mark. Plaintiff’s registration of its

marks with the United States Patent and Trademark Office provided evidence that the marks are

distinct. See Times Mirror Magazines, 212 F.3d at 165; Miss World (UK) Ltd. v. Mrs. America

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Pageants, Inc., 856 F.2d 1445, 1448 (9th Cir.1988).

Plaintiff’s choice of marks provides further evidence of distinctiveness. Both B&H and

ByH, which means B&H in Spanish, is suggestive of Plaintiffs’s products because it is Plaintiff’s

name. The Scroll Design logo was an arbitrary logo that Plaintiff assigned to identify its

products. Plaintiff combined the B&H and ByH marks with the Scroll Design logo to identify its

product. From these facts, the jury could have concluded this factor supports a finding that

Plaintiff’s marks were distinctive.

b. Duration and Extent Use

The evidence introduced at trial revealed that the B&H mark has been in use in Mexico

since at least the early 1990's, and probably even as early as 1976. The evidence introduced at

trial also revealed that the Scroll Design logo has been in use since approximately the early

1990's. The ByH mark has been used since 1997, when Plaintiff incorporated ByH de Las

Americas, Inc. In 1997, Plaintiff was using the ByH mark in conjunction with the Scroll Design

logo to market itself and its products and services in Mexico and Latin America. Making all

inferences to support the jury’s verdict, the court finds the jury could conclude that Plaintiffs’ use

of its marks were long-standing in the Mexican and Latin American market for roll-fed labeling

machines. As such, this factor suggests that Plaintiffs’ marks were famous enough to qualify for

protection from dilution.

c. Duration and Extent of Advertising and Publicity

The evidence admitted at trial suggests that Plaintiff advertised its products and services

and the B&H mark, the ByH mark, and the Scroll Design logo in Mexico and Latin America. 

Plaintiffs admitted into evidence copies of several advertisements using these marks. These

advertisements go back at least as early as 1997. Plaintiff’s advertisements containing the marks

included, among other things, press releases, magazine ads, and brochures. Construing the

evidence in the way that best supports the jury’s verdict, there was evidence to support a finding

that by at least 1997 Plaintiffs had done advertising using the marks in the United States, Mexico,

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and Latin America. This factor provides evidence that, as of 1997, Plaintiffs' marks were

famous enough in the niche market to qualify for protection from dilution.

d. The Geographic Extent of the Trading Area

By at least the early 1990's, Plaintiff used its marks in the niche market of roll-fed

labeling machines throughout Mexico and Latin America. In fact, by 1998 it appears Plaintiff

was using its marks around the world to sell its roll-fed labeling machines. The wide geographic

area in which Plaintiff used its marks for advertisement of roll-fed labeling machines suggests

that they were famous enough to qualify for protection from dilution. See, e.g., McCarthy, §

24:92 (stating that mark ordinarily should not be deemed famous unless it has been used on a

substantially national scale). This factor provides evidence from which the jury could conclude

Plaintiffs' marks were famous enough in the niche market to qualify for protection from dilution.

e. Channels of Trade for the Goods With Which the Mark is Used

“This factor merely requires the court to define the product or service line or market

within which the plaintiff's mark is used and has become famous.” McCarthy at § 24:92. The

court finds the relevant niche market was the market for roll-fed labeling machines in Mexico

and Latin America. 

f. Degree of Recognition in the Trading Areas and Channels of Trade Used By Plaintiffs and

Defendants

This factor appears to overlap somewhat with the first factor. This factor looks at how

recognizable or famous Plaintiff’s marks were in the Defendants’ trading area (i.e., Mexico and

Latin America). The evidence at trial indicated that both Plaintiff and Defendants were

competing within the narrow market of selling roll-fed labeling machines and parts in Mexico

and Latin America. In fact, evidence was admitted at trial indicating that Defendants were

targeting Plaintiff’s specific customers.

The court does recognize that there was only limited evidence concerning whether

consumers in the relevant market recognized “B&H,” “ByH,” and the Scroll Design logo. 

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However, on this motion the court finds there was a legally sufficient evidentiary basis for a

reasonable jury to find sufficient recognition of Plaintiff’s marks. Mr. Dadisho testified about an

incident in which a customer believed parts had been made by Plaintiff because they contained

the ByH symbol and Scroll Design logo. The customer apparently believed that there was no

difference between equipment purchased from Plaintiff and equipment purchased from

Defendants. This specific example was reinforced by other evidence indicating that customers

were confused between Plaintiff’s and Defendants’ products. Luis Higareda testified about a

time he was blamed for not having properly fixed a part by a customer because the customer

incorrectly believed B&H, rather than ByH, had fixed the part. Mr. Garcia Sanchez also

testified about an incident where a customer did not realize any difference between B&H and

ByH. Although the evidence showing the recognition of Plaintiff’s marks in the Mexican and

Latin American markets for roll-fed labeling machines was limited, making all inferences in

favor of the jury’s verdict, the court does not find such evidence was absent. From this

evidence, a reasonable jury could conclude that Plaintiffs' marks were famous enough in the

niche market to qualify for protection from dilution. 

g. Use of the Same or Similar Marks by Third Parties

Evidence of a mark's use by others “is relevant because, when a mark is in widespread

use, it may not be famous for the goods or services of one business.” Avery Dennison, 189 F.3d

at 878 (internal quotes and cites omitted); see also McCarthy, § 24:92 (“A mark that is merely

one in a 'crowd' of similar marks will not usually be 'famous'”). No evidence was admitted at

trial indicating that third parties also use the marks “B&H,” “ByH,” and the Scroll Design logo. 

This factor support’s the jury’s finding that Plaintiff’s marks were famous.

h. Registration

As discussed above, Plaintiff’s marks were federally registered. This factor suggests the

marks were famous enough for protection from dilution under federal law, and support’s the

jury’s finding.

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i. Balancing

Making all inferences in Plaintiff’s favor, the court finds that evidence was admitted at

trial suggesting the presence of all eight factors supporting a finding of famousness. The

evidence supports the jury’s finding that Plaintiff’s mark was famous enough in the niche market

to qualify for protection from dilution under federal law. 

In their brief, Defendants contend that merely reviewing the factors set forth in Section

1125(c)(1)(A) is insufficient to find famousness. Defendants contend that Plaintiff must make a

minimal showing of the requisite level of fame before Section 1125(c)(1)(A)’s factors are even

addressed. Defendants contend Plaintiff has failed to show the requisite level of fame. 

Defendants cite to Thane Intern., Inc. v. Trek Bicycle Corp. to support this position. In Thane

Intern., the Ninth Circuit stated: 

In many cases, the list of famousness factors contained in the statute can be quite

useful in assisting a fact-finder to determine whether a mark is famous. §

1125(c)(1)(A) to (H). But the party seeking protection must initially make at least

a minimal showing of the requisite level of fame. In this case, Trek has presented

no evidence that its TREK mark has achieved fame among the general consuming

public, as opposed to simply among bicycle enthusiasts.

Thane Intern., 305 F.3d at 911. This quote from Thane is found in the Ninth Circuit’s analysis

of famousness outside a niche market. Concerning the difference between dilution in a niche

market and dilution in general, the Ninth Circuit stated: “While the antidilution statute can

protect marks under the niche fame concept from dilution within their specialized markets, the

main thrust of the statute is to provide select marks with broad anti-appropriation protection both

within and beyond their specialized markets. Such protection is both more potent and more

difficult to obtain than niche fame protection.” Id. at 910. In this action, Plaintiff has not sought

dilution protection outside of the niche market of roll-fed labeling machines in Mexico and Latin

America. As such, the requirement that Plaintiff’s marks be a “household name,” “achieved

fame among the general consuming public,” and have a requisite level of fame apart from

Section 1125(c)(1)(A)’s factors is not required. Viewed in the light most favorable to Plaintiff, a

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reasonable jury could conclude Plaintiff’s marks were famous in the niche market.

2. Damages

An injunction is allowed in a dilution action pursuant to 15 U.S.C. § 1125(c)(1). 

Monetary damages are allowed pursuant to section 1125(c)(2) if there is a showing of willful

intent “to trade on the owner's reputation or to cause dilution of the mark.” Because the

traditional remedy against dilution was an injunction, the notion of how to calculate monetary

damages for dilution has been unexplored in case law. McCarthy § 24:73. McCarthy has stated

that “it is hard to envision how one would begin to compute or measure money damages to

compensate for the subtle, but real, blurring, tarnishment or dissonance that is caused by

dilution.” Id. McCarthy has speculated that a plaintiff would need to present some reasonable

method for measuring its damages. McCarthy § 24:99.

In general, trademark remedies are guided by tort law principles. Lindy Pen Co., Inc. v.

Bic Pen Corp., 982 F.2d 1400, 1407-08 (9th Cir. 1991); Broan Mfg. Co., Inc. v. Associated

Distributors, Inc., 923 F.2d 1232, 1235 (6th Cir.1991). In addressing monetary damages in

trademark cases, the Ninth Circuit has stated:

As a general rule, damages which result from a tort must be established with

reasonable certainty. Dan B. Dobbs, Remedies § 3.3, at 151 (1973). The Supreme

Court has held that "[d]amages are not rendered uncertain because they cannot be

calculated with absolute exactness," yet, a reasonable basis for computation must

exist. Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, 379, 47

S.Ct. 400, 405, 71 *1408 L.Ed. 684, 691 (1927). Many courts have denied a

monetary award in infringement cases when damages are remote and speculative.

See generally Foxtrap, Inc. v. Foxtrap, Inc., 671 F.2d 636, 642 (D.C.Cir.1982)

("any award based on plaintiff's damages requires some showing of actual loss");

Burndy Corp. v. Teledyne Industries, Inc., 584 F.Supp. 656, 664 (D.C.Conn.) ("no 

assessment of damages is authorized if it is not based on actually proven

damages."), aff'd 748 F.2d 767 (2d Cir.1984); Invicta Plastics (USA) Ltd. v. Mego

Corp., 523 F.Supp. 619, 624 (S.D.N.Y.1981) ("damages will not be awarded in

the absence of credible evidence demonstrating injury to the plaintiff from

defendant's sales."); Vuitton et Fils, S.A. v. Crown Handbags, 492 F.Supp. 1071,

1077 (S.D.N.Y.1979) ("The discretionary award of either damages or profits

assumes an evidentiary basis on which to rest such an award. Without such a basis

there can be no recovery."), aff'd mem., 622 F.2d 577 (2d Cir.1980).

Lindy Pen Co., 982 F.2d at 1407-08. Under general tort principles “the infringer-tortfeasor is

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liable for all injuries caused to plaintiff by the wrongful act, whether or not actually anticipated or

contemplated by the defendant when it performed the acts of infringement.” Broan, 923 F.2d at

1235 (quoting McCarthy § 30:27 (2d ed.1984)). In trademark cases courts draw a sharp

distinction between proof of the fact of damage and proof of the amount of damage. Broan, 923

F.2d at 1235. To be entitled to damages the plaintiff must prove that some damages were the

certain result of the wrong. Broan, 923 F.2d at 1235; Otis Clapp & Son, Inc. v. Filmore Vitamin

Co., 754 F.2d 738, 745 (7th Cir.1985). Damages are precluded where the damage claimed is not

the certain result of the wrong. Broan, 923 F.2d at 1235. “Once the existence of damages has

been shown, all that an award of damages requires is substantial evidence in the record to permit

a fact finder to draw reasonable inferences and make a fair and reasonable assessment of the

amount of damages.” Broan, 923 F.2d at 1236. These standards are best summed up by the

finding that after exhaustive review of cases, the policy and theoretical basis underlying monetary

awards in trademark cases have received inadequate judicial attention and have remained

confused and undefined. McCarthy § 30:58. 

Based on these standards and construing the evidence in the light most favorable to

Plaintiff, the only reasonable conclusion is not that the jury’s damage award for dilution is not

supported by any evidence or legal authority. Defendants’ basic position is that a directed

verdict is required because Plaintiff provided no specific evidence of an exact amount of

monetary damage caused by Defendants’ dilution of Plaintiffs’ marks. The court does not find

that Plaintiff’s failure to have an expert testify to an exact allocation of damages for Defendants’

dilution requires a directed verdict. The jury was provided with evidence concerning Plaintiff’s

and Defendants’ sales in Mexico and Latin America. The jury was also provided with evidence

concerning Plaintiff’s and Defendants’ costs. The jury was provided with evidence concerning

potential lost sales caused by Defendants’ conduct. The jury was provided with evidence that

Defendants’ use of Plaintiff’s marks caused confusion in the niche market and required

corrective advertising. The evidence showed that Defendants used Plaintiff’s marks on

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voluminous documents, including, among other things, invoices, advertising, and letterhead. 

The jury was given evidence showing sales of machines and parts which directly infringed on

Plaintiff’s marks. Both parties introduced evidence of Plaintiff’s damages based on Defendants’

sales. Given this evidence, the court finds that the jury could determine a reasonable damage

award for Defendants’ dilution of Plaintiff’s marks. The only possible outcome from this

evidence is not that Plaintiff’s dilution claim fails because of the lack of specific evidence

concerning an amount of damages. Thus, a directed verdict is not required on Plaintiff’s dilution

claim.

ORDER

Accordingly, based on the above memorandum opinion and order, the court ORDERS

that Defendants’ renewed motion for judgment as a matter of law on Plaintiff’s claims of trade

dress infringement and trademark dilution is DENIED.

IT IS SO ORDERED.

Dated: May 11, 2005 /s/ Anthony W. Ishii 

0m8i78 UNITED STATES DISTRICT JUDGE

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