UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

 

COACH, INC. and COACH SERVICES, INC., 

Plaintiffs, 

 

v. Case No. 15-10740 

SOURCE II, INC. and CERHUE ANDRE 

WALKER, individually and d/b/a SOURCE II, 

INC., 

 Defendants. 

 / 

OPINION AND ORDER AWARDING STATUTORY DAMAGES 

 This is a counterfeit product case. Already proven is the gross and intentional 

theft-by-infringement of the intellectual property rights of the owners of world-famous 

trademarks. All that remains for the court is to calculate the money damages due the 

lawful owners of the property in question.

 Plaintiffs Coach, Inc. and Coach Services, Inc. (collectively, “Coach”) brought this 

trademark infringement action to recover damages from Defendants Source II, Inc. and 

Cerhue Andre Walker, alleging that the Defendants offered for sale counterfeit Coach 

products. On September 13, 2016, the court granted in part Plaintiffs’ Motion for Partial 

Summary Judgment as to Defendants’ liability and denied Defendants’ Motion for 

Summary Judgment. (Dkt. # 37.) In a subsequent informal status conference, Plaintiffs 

indicated to the court that they would be electing to recover statutory damages instead 

of actual damages as allowed under the Lanham Act, 15 U.S.C. § 1117(c), which 

provides: 

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In a case involving the use of a counterfeit mark (as defined in section 

1116(d) of this title) in connection with the sale, offering for sale, or 

distribution of goods or services, the plaintiff may elect, at any time before 

final judgment is rendered by the trial court, to recover, instead of actual 

damages and profits under subsection (a), an award of statutory damages 

for any such use in connection with the sale, offering for sale, or 

distribution of goods or services . . . . 

 In light of Plaintiffs’ election, the court directed Plaintiffs to provide supplemental 

briefing addressing the statutory damages to which they believed they were entitled. 

(Dkt. # 39, Pg. ID 647.) In their brief, Plaintiffs request a finding that Defendants willfully 

infringed their marks, an award of $2,000,000, and a permanent injunction. (Dkt. # 40.) 

Defendants filed a response, (Dkt. # 43), to which Plaintiffs replied, (Dkt. # 45), and the 

court allowed Defendants a sur-reply (Dkt. # 47). The court has reviewed all the relevant 

briefing, and finds a hearing unnecessary. See E.D. Mich. LR 7.1(f)(2). For the following 

reasons, the court will determine that no additional fact-finding is necessary and will 

award Plaintiffs $300,000. 

I. BACKGROUND1

 Unless otherwise noted, the following facts are undisputed. Coach is a venerable 

American business that manufactures and sells fine leather products and other 

accessories. (Dkt. # 24, Pg. ID 184). Coach owns an extensive portfolio of well-known, 

easily recognized, and federally registered trademarks. (Id.) Coach has expended 

substantial resources developing, advertising, and otherwise promoting these marks. 

(Id.) As a result, consumers readily identify merchandise bearing Coach marks as being 

of high quality and originating with Coach. (Id.) 

 1

 The background section is largely a repetition of the court’s earlier summary 

judgment order. (Dkt. # 37.) 

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 Defendant Cerhue Andre Walker is the sole member and owner of Defendant 

Source II, Inc., which operates the clothing and accessory store, The Source Apparel. 

(Dkt. # 24, Pg. ID 192.) Defendants are not licensed or otherwise authorized to use 

Coach’s marks. (Dkt. # 8, Pg. ID 55.) 

 Defendants’ showroom, while simulating a legitimate business, was in fact a 

“front” for a hidden backroom where counterfeit apparel and accessories were displayed 

and offered for sale. (Dkt. #31-5, Pg. ID 544.) On December 4, 2014, law enforcement 

officials executed a search warrant at The Source Apparel and seized thousands of 

counterfeit handbags, wallets, and accessories worth approximately $1,671,040. (Dkt. # 

23, Pg. ID 140; Dkt. # 24, Pg. ID 192-93.) Four counterfeit Coach purses were among 

the products seized. (Dkt. # 23-5, Pg. ID 164). James Schoenherr, a Coach investigator 

working with law enforcement examined the purses and concluded they were 

counterfeit. (Dkt. #23-1, Pg. ID 147-48.) 

II. DISCUSSION 

 Thievery such as that proved in this case is a problem of apparently massive 

proportion. “In 2002, American copyright based industries sustained more than $9 

billion in losses” from counterfeiting and piracy. See International Anticounterfeiting 

Coalition, White Paper: The Negative Consequences of Intellectual Property Theft: 

Economic Harm, Threats to the Public Health and Safety, and Links to Organized Crime 

and Terrorist Organizations (January 2005), at 4.2 The Act authorizes the court to award 

statutory damages of “not less than $1,000 or more than $200,000 per counterfeit mark 

 

2 available at 

http://cdm16064.contentdm.oclc.org/cdm/ref/collection/p266901coll4/id/3379 (last 

visited 2/1/2017). 

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per type of good[] . . . offered for sale . . . as the court considers just[,]” which increases 

to “not more than $2,000,000 per counterfeit mark per type of good” if the use of the 

counterfeit mark was “willful.” Id. The language of the provision places the amount of the 

award squarely within the discretion of the court. Id. Defendants request a finding of 

willfulness, an award of $2,000,000, and a permanent injunction. (Dkt. # 40.) 

A. The marks at issue 

 The unusual record in this case presents a threshold issue. The court has 

already found that Defendants are liable for trademark infringement. (Dkt. # 37.) 

Defendant Source II, by failing to respond to Plaintiffs’ requests for admission, has been 

deemed to admit that it offered for sale products, including “handbags and a wallet,” 

bearing counterfeits of registered Coach trademarks. (Dkt. # 27-6.) Defendant Walker, 

however, did respond to the requests, and has provided a sworn affidavit stating that 

“no Coach wallets were on display and/or for sale” at the time of the raid. (Dkt. # 23-7, 

Pg. ID 178.) The court has not yet addressed the wallet issue—the purses alone were 

sufficient to find that Defendants were liable and “the degree of Defendants’ liability is a 

damages question that remains unresolved.” (Dkt. # 39, Pg. ID 647.) However, the 

record lacks any evidence to show which and how many registered marks were on the 

purses. 

 In a second affidavit, attached to Defendants’ sur-reply on statutory damages, 

Defendant Walker states that he believes the wallet “was found at Source II[] well prior 

to the December 4, 2014 seizure by the confidential informant when Source II re-located 

from its previous location at Snyder Sales and was part of an accumulation of old goods 

stored in a bin and which was moved to the Source II location.” (Dkt. # 47, Pg. ID 744.) 

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Indeed, according to the warrant affidavit, a confidential informant purchased twentyeight items from Source II’s prior location, including a Coach wallet, on February 21, 

2014. (Dkt. # 27-2, Pg. ID 265.) Per the warrant affidavit, James Schoenherr, as a 

representative of most of the brands, including Coach, inspected the items and 

determined they were all counterfeits on March 6, 2014. (Id. at Pg. ID 265.) 

 Schoenerr’s report to Coach, dated shortly after the raid of Source II, indicates 

that he was contacted by law enforcement in February of 2014, and asked to assist with 

a “long term investigation” of a then-unidentified wholesale vender. (Dkt. # 24-2, Pg. ID 

209.) The report states that during the investigation Schoenerr examined items 

purchased from the vender on, among other dates, February 21, 2014, and that all of 

the inspected items were counterfeit. (Id.) Schoenerr also explains that he was asked to 

go to Source II on the day of the raid and review items seized from Defendants’ store 

that had been “on display and offered for sale[,]” including Coach products, and that “All 

Coach Logo apparel was determined to be counterfeit.” (Id. at 209-210.) Directly below 

this line, without description, are two photos of the wallet at issue. (Id. at 210.) The 

report does not indicate whether the wallet was one of the products seized during the 

raid or whether it was the wallet purchased by the confidential informant in February of 

2014. As Defendants have repeatedly pointed out, the wallet does not appear in the 

inventory of products seized in the raid. (Dkt. # 43-4.) 

 Even if Defendants theory is correct, Defendants sold the counterfeit Coach 

wallet to a confidential informant on February 6, 2014. This is still “use of a counterfeit 

mark in connection with the sale, offering for sale, or distribution of goods or services” 

for which Plaintiffs may recover statutory damages. 15 U.S.C. § 1117(c). As a result, 

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Defendant Walker is also liable for trademark infringement with respect to both the four 

purses and the wallet. 

 Defendants also aver that “Plaintiffs are required to specifically identify which 

marks have been infringed.” (Dkt. # 43, Pg. ID 685.) In support, Defendants cite, without 

discussion, Heckler & Koch, Inc. v. Coharie Arms., Inc., 2010 U.S. Dist. LEXIS 23460, 

at *4 (S.D. Ind., March 12, 2010) (holding that “although evidence of the registration 

number is essential to prevail, it is not essential at the pleading stage”). Notwithstanding 

Defendants’ reliance on this unreported, out-of-circuit case, Defendants concede that 

the wallet, with its accompanying tag, bore at least two registered trademarks. (Dkt. # 

47, Pg. ID 737 (stating that marks corresponding to U.S. Trademark Registration Nos. 

2,626,565 and 1,309,779 “appear in the photographs”).) 

 Defendants also acknowledge that Plaintiffs point out a third mark that does, in 

fact, appear on the wallet, though they argue that it does not appear in the chart listed in 

Plaintiffs’ reply brief. (Id. (4,105,636).) Defendants do not explain why that would be 

relevant. Even if it were, the mark actually does appear in the chart in Plaintiffs’ reply, 

(Dkt. # 45, Pg. ID 721), as well as in the complaint, (Dkt. # 1, Pg. ID 7), and Plaintiffs’ 

partial summary judgment motion, (Dkt. # 24, Pg. ID 189). Thus, at least three valid, 

registered marks appear on the counterfeit wallet that Defendants either offered for sale 

or sold. 

 To the extent the court has already held that there is no genuine dispute that the 

purses bore at least one counterfeit Coach mark, (see Dkt. # 37, Pg. ID 613), Heckler & 

Koch does not address whether the court may presume that the purses represent an 

additional type of product for the purposes of the maximum allowable statutory 

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damages award. Because the court will settle on an award far less than the maximum 

allowed based only on the wallet, the court need not resolve the question. 

B. Willfulness 

 Defendants argue that the only basis for a finding of willfulness is Defendant 

Source II, Inc.’s failure to respond to Plaintiffs’ Request for Admission. (Dkt. # 43, Pg. ID 

686.) The court firmly disagrees. Defendants’ entire course of conduct here 

demonstrates willfulness. As the court found in its summary judgment order, undisputed 

evidence in the record shows that Defendants’ superficially legitimate business was 

merely a front—Defendants’ store concealed a hidden backroom where Defendants 

traded in counterfeits. At no point in this litigation have Defendants disputed the 

existence of or their involvement in this illicit enterprise. Defendants’ willfulness is 

further evidenced by the scale of their illegitimate business—law enforcement seized 

over $1.5 million in counterfeit goods that Defendants had on hand at the time. The 

court can scarcely conceive of stronger evidenced of willful infringement than 

Defendants’ underhanded efforts to illegally acquire, quietly transport, display out of 

easy sight in the “back room,” and offer for sale what amounted to—literally—a small 

fortune in counterfeit goods. 

 Defendants again point to the affidavit of Defendant Walker, (Dkt. # 23-7), in 

which he denies that any Coach purses were “on display” and denies that any Coach 

wallets were “on display or offered for sale” on the day of the raid. (Dkt. # 43, Pg. ID 

686-87.) As the court discussed in its summary judgment order, Defendant Walker’s 

affidavit fails to contest that counterfeit Coach purses were “offered for sale.” (Dkt. # 37, 

Pg. ID 613-14.) If anything, the fact that the purses were not visibly “on display” in the 

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area to which the public had ready access, but were uncontrovertedly offered for sale 

away from public view in Defendants’ secret room is more indicative of willfulness. And 

as discussed above, Defendant Walker’s alternative scenario in which he sold the 

counterfeit wallet to the confidential informant does not absolve him. Further, despite 

filing two separate affidavits, at no point does Defendant Walker contest evidence in the 

record that he directed this entire business. 

 The court finds beyond any degree of doubt that both Defendants acted willfully. 

As a result, Plaintiffs are entitled to statutory damages of not less than $1,000 and not 

more than $2,000,000 per mark per type of good sold. 15 U.S.C. § 1117(c)(2). 

C. Award amount 

 Plaintiffs ask the court to award $2,000,000. (Dkt. # 40, Pg. ID 657.) In support, 

Plaintiffs point to a variety of cases in which other courts have granted seven-figure 

statutory damage awards. (Id.) But the cases Plaintiffs point to are substantially different 

from the record here. Most notably, they involve online stores with evidence showing 

sales of thousands of infringing products. See, e.g., Coach Inc. v. P-Ships & Uninc. 

Assoc’s, No. 14-cv-09924, Dkt. # 10, Pg. ID 104 (N.D. Ill. Oct. 19, 2016); Coach Inc. v. 

Allen, 2012 U.S. Dist. LEXIS 100829 (S.D.N.Y. July 18, 2012). Or they involve 

thousands of counterfeit Coach products, as opposed to five purses and one wallet. E.g. 

Coach, Inc. v. Celco Customs Service Co., 11-cv-10787, Dkt. # 1, Pg. ID 9 (C.D. Cal. 

Mar. 28, 2013.) The court finds Plaintiffs’ examples unhelpful to monetarily assess the 

more modest illegal marketing at issue here.

 The Sixth Circuit has not adopted any particular formula or identified specific 

factors the court must consider. As Plaintiffs point out, other courts have borrowed the 

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factors identified in Tiffany (NJ) Inc. v. Luban for awarding statutory damages for 

copyright infringement. See, e.g., Coach, Inc. v. Pure MLK Last Stop, Inc., 2013 WL 

5888139, *2 (C.D. Ill. Nov. 4, 2013) (citing Tiffany (NJ) Inc. v. Luban, 282 F. Supp.2d 

123, 125 (S.D.N.Y. 2003)). These include: (1) expenses saved and profits reaped; (2) 

the revenue lost by Plaintiffs; (3) the value of the copyright or trademark; (4) the 

deterrent effect on others besides Defendants; (5) whether Defendant’s conduct was 

innocent or willful; (6) whether Defendants cooperated in providing particular records 

from which to assess the value of the infringing material produced; and (7) the potential 

for discouraging Defendants. Luban, 282 F. Supp.2d at 125 (citing Fitzgerald Publishing 

Co., Inc. v. Baylor Publishing Co., 807 F.2d 1110, 1117 (2nd Cir. 1986)). Defendants 

aver only that the court “is not required to follow any rigid formula[,] but enjoys wide 

discretion. (Dkt. # 43, Pg. ID 689 (citing Chi-Boy Music v. Charlie Club, Inc., 930 F.2d 

1224, 1229 (7th Cir. 1991)). 

 Little in the record speaks to the first two factors. Defendants aver that the wallet 

at issue has not been sold by Plaintiffs for some time, and argue that this supports an 

inference that Plaintiffs lost little revenue. (Dkt. # 47, Pg. ID 739.) As to the third factor, 

the court has already found that Plaintiffs have “expended substantial resources 

developing, advertising, and otherwise promoting these marks.” (Dkt. # 37, Pg. ID 609.) 

With respect to the fourth, generally the larger the award, the greater the deterrent 

effect on other counterfeiters. Beyond Defendant Source II’s failure to respond to the 

requests for admission, the court is unaware of any particular refusals to cooperate in 

discovery. 

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 The court finds that the most significant factors are Defendants’ willfulness and 

the potential for discouraging Defendants. As explained—and emphasized—above, 

Defendants’ conduct was unmistakably willful. Given the scale of Defendants’ operation, 

the award must be sufficiently large that it cannot be viewed as a mere “cost of doing 

business.” Defendants argue that “a permanent injunction would serve as sufficient 

deterrence from future conduct and an [sic] any award of damages would be 

redundant[,]” but the court cannot believe that a civil injunction, even if printed in large 

font on sturdy white paper, would succeed in deterring Defendants from future 

counterfeiting when actual criminal prohibitions have already failed. 

 Although the court does not know the exact number of counterfeit marks sold or 

offered for sale by Defendants, at least three marks appear on the wallet. The court 

finds that a total of $300,000—$100,000 per known mark—will appropriately 

compensate Plaintiffs, punish Defendants, and deter Defendants and others from 

willfully dealing in counterfeit products in the future. While on the high end for a “per 

mark” basis, the statute authorizes twice as much even in the absence of willfulness. 

Other courts have awarded similar amounts when the infringement was willful and the 

exact number of infringing products and marks could not be ascertained. See, e.g., Pure 

MLK Last Stop, 2013 WL 5888139, at *3 (awarding $500,000 total, $100,000 per mark 

appearing on single handbag produced from seizure of many counterfeit products from 

the defendant’s “large scale counterfeiting operation”). Further, the court notes that the 

$300,000 total is a small fraction of the $2,000,000 maximum the court is empowered 

by statute to award for willful violation of a single mark, and just 5 percent of the 

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$6,000,000 maximum authorized for Defendants willful sale or offering for sale of the 

wallet. 15 U.S.C. § 1117(c)(2). 

 Defendants’ relentless focus on the wallet versus the purses and the amount 

awarded per mark misses the forest for the trees. The court is less concerned with the 

“per mark” amount than it is with the total—whether the wallet has two or five marks, or 

the purses each bore the same mark or many different ones, Defendants’ willfulness 

and susceptibility to future deterrence remain the same. The court finds that the 

circumstances here call for a total award of $300,000, an amount far less than the 

maximum authorized by statute based on the wallet alone. Cf. Coach, Inc. v. Brothers 

Gas & Mart, Inc., 2013 WL 1414435 (E.D. Mich. April 8, 2013) (Borman, J.) (awarding a 

total amount of $500,000 in statutory damages without discussing the amount awarded 

per mark). 

 The court has already ruled that Defendant Walker will be held individually liable 

for the Lanham Act claims. (Dkt. # 37, Pg. ID 616.) Defendants argue that the court 

must analyze the amount of damages to be awarded different with respect to each 

Defendant, as “Plaintiffs have not pierced the corporate veil to reach Walker personally.” 

(Dkt. # 47, Pg. ID 736 n.1.) While Defendants are technically correct that Defendant 

Walker’s liability is not based on piercing the corporate veil, Defendants are still jointly 

and severally liable for the infringement. See Hair Assocs., Inc. v. Nat’l Hair 

Replacement Servs., Inc., 987 F. Supp. 569, 590-91 (W.D. Mich. 1997) (“Put simply, a 

corporate officer’s active participation in infringing activity is sufficient to subject him or 

her to joint and several liability for trademark infringement with the corporation.”). The 

three valid, registered marks, even without a finding a willfulness, sets the upper bound 

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on statutory damages at $600,000. 15 U.S.C. 1117(c)(1). As the court’s award is well 

below even that limit, the court will not make separate findings. Defendants are jointly 

and severally liable for the entire $300,000 award. 

D. Injunction 

 Plaintiffs also request the court issue a permanent injunction against Defendants. 

(Dkt. # 40, Pg. ID 662-63.) The Lanham Act authorizes courts to grant injunctions 

“under principles of equity and upon such terms as the court may deem reasonable” to 

prevent future infringement. 15 U.S.C. § 1116(a). Defendants do not contest the 

suitability of a permanent injunction in this case. (Dkt. # 47, Pg. ID 740 (“[A]ny harm 

incurred on [sic] Plaintiffs is so minor than an [sic] injunctive relief would sufficiently 

prevent any similar conduct in the future by either Defendant.”).) Accordingly, the court 

will enjoin Defendants from ever again infringing on Coach trademarks. 

III. CONCLUSION 

For all the reasons discussed above, IT IS ORDERED that the court awards 

Plaintiffs statutory damages in the amount of $300,000 against Defendants, jointly and 

severally. 

 IT IS FURTHER ORDERED that Defendants Source II, Inc. and Cerhue Andre 

Walker are permanently ENJOINED AND PROHIBITED from using, displaying, selling, 

or offering for sale in any way a product that bears any actual or simulated Coach 

trademark. 

 IT IS FURTHER ORDERED that Plaintiff Coach may submit for the court’s 

consideration alternate language to use in modifying the injunctive relief ordered herein. 

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Any such alternate language should be submitted within 21 days of this order. 

s/Robert H. Cleland / 

ROBERT H. CLELAND 

UNITED STATES DISTRICT JUDGE 

Dated: February 1, 2017 

I hereby certify that a copy of the foregoing document was mailed to counsel of record 

on this date, February 1, 2017, by electronic and/or ordinary mail. 

s/Shawna C. Burns / 

 Case Manager Generalist 

 (810) 984-2056 

S:\Cleland\JUDGE'S DESK\C1 ORDERS\15-10740.COACH.Statutory.Damages.Finding.TLH.RHC.docx

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