United States Court of Appeals

For the First Circuit

No. 11-1663

FISHMAN TRANSDUCERS, INC.,

Plaintiff, Appellant,

v.

STEPHEN PAUL, d/b/a Esteban; DAYSTAR PRODUCTIONS;

HSN INTERACTIVE LLC,

Defendants/Third-Party Plaintiffs-Appellees.

__________

FORCE USA, INC.; FORCE, LTD.,

Third-Party Defendants.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. George A. O'Toole, Jr., U.S. District Judge]

Before

Boudin, Circuit Judge,

Souter,* Associate Justice,

and Thompson, Circuit Judge.

Sibley P. Reppert with whom Michael J. Markoff and Pearl Cohen

Zedek Latzer, LLP were on brief for appellant.

Edward T. Colbert with whom T. Cy Walker, Susan A. Smith,

William M. Merone, Erik C. Kane, Kenyon & Kenyon LLP, Michael B.

Keating and Foley Hoag LLP were on brief for appellees.

July 3, 2012

*

The Hon. David H. Souter, Associate Justice (Ret.) of the

Supreme Court of the United States, sitting by designation.
BOUDIN, Circuit Judge. This appeal concerns claims by 

Fishman Transducers, Inc. ("Fishman"), primarily for trademark

infringement and false advertising under the Lanham Act, 15 U.S.C.

§ 1051 et seq. (2006), against HSN Interactive LLC ("HSN"),

musician Stephen Paul and his company Daystar Productions. Fishman

failed to get the relief it sought in the district court and now

appeals. We refer to the Lanham Act throughout by its Title 15

section numbers rather than the sections in the original statute.

Fishman is a developer and manufacturer of electronic

equipment, specifically a highly-regarded line of acoustic

equipment that can be attached to individual musical instruments to

provide sound amplification. Fishman guitar "pickups" often

include both a transducer and a preamplifier or equalizer, although

the term can also refer to only the transducer. The Fishman

transducer is a small device usually installed inside the guitar

where it is not immediately visible.

HSN is a retailer of various consumer goods and sells

products on its website; its sister company sells products on the

television channel Home Shopping Network; for purposes of this case

the two entities were treated as one. In late 2006, HSN sold

through the website and television station about 70,000 "Esteban"

guitars that it identified in the programming and website--

inaccurately, it now concedes--as containing Fishman pickups. This

-2-
trademark violation is the centerpiece of the litigation that led

to this appeal.

Esteban is the performance name used by musician Stephen

Paul who, with his company Daystar Productions, has collaborated

with HSN since 2001 to market and sell Esteban guitar packages

(usually a guitar equipped with a pickup as well as accessories

such as a strap, case, amplifier and instructional videos). 

Beginning in October 2006 on the HSN channel, Paul lauded Fishman

pickups, emphasized that the guitars included them and boasted that

a Fishman pickup alone would sell for as much as the full HSN

package. Beginning in the second quarter of 2006, the HSN website

simply listed a Fishman pickup as a specification of the guitars. 

Several months after the television advertising began,

Fishman contacted HSN and Daystar and demanded an end to claims in

the broadcasts and on the website that the guitars contained

Fishman pickups. HSN complied and ceased to make reference to

Fishman pickups in its sales pitches and on its website. Fishman

also brought suit in the district court, stating claims against

HSN, Paul and Daystar under the Lanham Act for trademark violation

and false advertising, the Massachusetts Consumer Protection Act,

Mass. Gen. L. ch. 93A, and state common law trademark infringement

and unfair competition.

After extensive discovery and shortly before trial, the

district court dismissed Fishman's chapter 93A claim, denied its

-3-
request to present evidence of "trademark counterfeiting," 15

U.S.C. § 1114, and ruled that the parties were not in "direct

competition" (the latter relevant to damages under the Lanham Act). 

Fishman Transducers, Inc. v. Paul, No. 07-cv-10071 (D. Mass. Mar.

7, 2011). During the trial, the district court ruled inadmissible

key damage evidence proffered by Fishman, but left open evidence of

disgorgement of profits for a separate hearing before the judge, 15

U.S.C. § 1117(a).

During the eight-day trial, defendants did not seriously

deny infringing the Fishman trademark and falsely advertising the

guitars as containing Fishman pickups; much of the extensive

testimony and argument focused on whether the defendants'

violations were willful. The evidence showed that the guitars in

question had been manufactured for HSN in China by Force Limited

("Force"), which had previously made Esteban guitars for HSN using

pickups supplied by a company named Belcat.

Then, in 2006, Force substituted another Belcat pickup

that Belcat told Force was a Fishman or "Fishman-type" pickup;

Force then advised HSN that the guitars contained Fishman pickups

and so identified the pickups in the specifications; HSN passed on

the information to Paul. Whether or not Fishman made the new

Belcat pickup or supplied technology for it,1 defendants now

1

Fishman, it appears, both competed with and sold to Belcat,

and some of Belcat's sales to a Japanese manufacturer married

Fishman pickups and Belcat preamps. Fishman also has an agreement

-4-
concede that the HSN advertising and sales in question used the

Fishman trademark without authorization.

At the close of trial, the jury found trademark

infringement and false advertising in violation of the Lanham Act;

but the jury also found that neither violation was "willful." In

a post-trial decision, Fishman Transducers, Inc. v. Paul, No. 07-

10071, 2011 WL 1157529 (D. Mass. Mar. 29, 2011), the judge agreed

that willfulness had not been shown, adding that the jury's finding

would bind him anyway. Because the violations were not willful,

and separately because of conventional equitable balancing, he

chose not to order disgorgement of profits. Id.

Fishman has now appealed. The applicable standard of

review varies with the issue and whether the claim was properly

preserved. Fishman's appeal is directed primarily to its claims

under the Lanham Act. Section 1125 of the Act creates federal

causes of action both for misuse of a trademark and false

advertising that misrepresents the source of goods; section 1117

permits trebling of a damage award, a recovery of defendant's

profits, and an award of attorney's fees in "exceptional" cases. 

15 U.S.C. §§ 1117(a), 1125(a).2

with Belcat allowing it to manufacture pickups with Fishmanpatented technology, but Belcat is precluded from advertising them

as Fishman products. 

2

The structure of the Lanham Act's remedial provisions is

confusing, Mark A. Thurmon, Confusion Codified: Why Trademark

Remedies Make No Sense, 17 J. Intell. Prop. L. 245 (2010), but in

-5-
Fishman's first claim is that the district court

mishandled the central issue of willfulness, both in its

instructions and in responding to two jury questions. 

Interestingly, the term "willful" appears in section 1117 only in

relation to two provisions not of immediate importance here--one

relating to dilution claims (section 1125©) and another with

counterfeit marks (section 1116(d)), 15 U.S.C. § 1117(a), (c)(2)--

and similarly in section 1125 only in relation to dilution of a

famous mark and domain name registration, 15 U.S.C. §

1125(c)(5)(B), (d)(2)(D)(ii).

Rather, the governing language provides: 

The court shall assess such profits and

damages or cause the same to be assessed under

its direction. In assessing profits the

plaintiff shall be required to prove

defendant's sales only; defendant must prove

all elements of cost or deduction claimed. In

assessing damages the court may enter

judgment, according to the circumstances of

the case, for any sum above the amount found

as actual damages, not exceeding three times

such amount. If the court shall find that the

amount of the recovery based on profits is

either inadequate or excessive the court may

in its discretion enter judgment for such sum

as the court shall find to be just, according

to the circumstances of the case. 

15 U.S.C. § 1117(a). 

addition to sections 1125(a) and 1117--themselves no models of

clarity or consistent interpretation--a number of other provisions

deal with specialized violations (e.g., counterfeiting marks),

other remedies (such as injunctions and destruction) and special

situations (e.g., liability of printers and publishers).

-6-
Nevertheless, in Lanham Act cases, courts (including this

one) have used willfulness as a gloss or screen in deciding what

remedies to provide for ordinary infringement. While damages in

trademark or false advertising cases can be awarded without any

special showing of scienter or equitable factors, e.g., Hot Wax,

Inc. v. Turtle Wax, Inc., 191 F.3d 813, 819-20 (7th Cir. 1999), our

cases usually require willfulness (one primary exception involving

direct competition is discussed below) to allow either (1) more

than single damages or (2) a recovery of the defendant's profits.3

Because the district court excluded testimony on damages,

Fishman's remaining hope was to recover the defendant's profits,

but this required a showing of willfulness. The jury found that

trademark infringement and false advertisement occurred but that

the violations were not willful. The judge treated the finding as

binding, adding that his own view was the same and that no other

equitable ground for awarding profits to Fishman had been

established.

On this appeal, Fishman argues that the jury's finding

that the violations had not been willful was impaired both by

errors in the court's instructions to the jury and by inaccurate

3

E.g., Visible Sys. Corp. v. Unisys Corp., 551 F.3d 65, 81

(1st Cir. 2008); Tamko Roofing Prods., Inc. v. Ideal Roofing Co.,

Ltd., 282 F.3d 23, 36 & n. 11 (1st Cir. 2002); Aktiebolaget

Electrolux v. Armatron Int'l, Inc., 999 F.2d 1, 5 (1st Cir. 1993);

see also La Quinta Corp. v. Heartland Props. LLC, 603 F.3d 327, 345

(6th Cir. 2010); J. Thomas McCarthy, 5 McCarthy on Trademarks and

Unfair Competition § 30.62 (4th ed. 2012).

-7-
answers that the court gave to questions the jury asked during

deliberations. We address these claims on the merits--several have

ongoing importance for future trademark cases--but conclude finally

that such errors as occurred did not affect the outcome.

In federal civil litigation willfulness requires a

conscious awareness of wrongdoing by the defendant or at least

conduct deemed "objectively reckless" measured against standards of

reasonable behavior.4

 The criminal standard is slightly more

demanding because it requires a subjective indifference to risk for

recklessness--sometimes called willful blindness--as the minimum

condition for a willfulness finding. See United States v. Griffin,

524 F.3d 71, 80 (1st Cir. 2008).

The district judge in this case instructed the jury that:

In order to consider whether it's willful,

consider whether the defendants knew or should

have known about the mark and that it belonged

to the plaintiff; second, that the defendants

knew or should have known that their own

conduct was infringing the plaintiff's mark;

and third, and importantly, the defendants

intentionally sold products in connection with

the infringing mark with the knowledge that it

infringed. An act that is done willfully is

done voluntarily and intentionally as opposed

to by mistake or accident.

4Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57-58 (2007);

Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc., 620

F.3d 1305, 1319 (Fed. Cir. 2010); accord In re Seagate Tech., LLC,

497 F.3d 1360, 1371 (Fed. Cir. 2007) (willful patent infringement),

cert. denied, 552 U.S. 1230 (2008); In re Barboza, 545 F.3d 702,

707-08 (9th Cir. 2008) (willful copyright infringement); Zazú

Designs v. L'Oréal, S.A., 979 F.2d 499, 507 (7th Cir. 1992)

(willful trademark infringement). 

-8-
(Emphasis added.)

Fishman is right that the underscored language fails to

make clear that objective recklessness is also a basis for finding

willfulness in the civil context. Whether Fishman adequately

preserved the claim of error in its colloquy with the judge is

doubtful, Scarfo v. Cabletron Sys., Inc., 54 F.3d 931, 946 (1st

Cir. 1995) (requiring that an instructional error and the proposed

correction be adequately identified); but, if preserved (which we

need not decide), there is no doubt that the underlined portion set

the bar too high and might have confused the jury.5

The district judge also instructed the jury that the

plaintiff bore the burden of proving willfulness by clear and

convincing evidence. Fishman did preserve this objection and

argued that the appropriate burden is preponderance of the

evidence. The district judge denied the request relying on Tamko

Roofing, where this circuit noted in passing that the jury in the

district court found willfulness by clear and convincing evidence,

282 F.3d at 29; but the burden of proof was not a disputed issue

and our decision in Tamko Roofing did not adopt any standard.

5

Fishman's counsel pointed to a failure to mention

recklessness; the district judge replied that he had "said 'known

or should have known'"--which sets the standard too low--and

Fishman's counsel then gave a response that failed to point out

that on this reading the jury was being given two inconsistent

standards, one too high and one too low--neither being correct.

-9-
The ordinary rule in civil cases is proof by a 

preponderance of the evidence, Herman & MacLean v. Huddleston, 459

U.S. 375, 387 (1983), and the text of section 1117 does not

prescribe a different burden of proof. Fraud, a cousin to

willfulness, has an historical association with the clear and

convincing standard but the modern tendency in the Supreme Court is

to reserve the clear and convincing burden, unless dictated by

statute, for matters with constitutional implications like civil

commitment.6

This was the view taken in Herman & MacLean, holding that

the preponderance standard should govern the main anti-fraud

provision of the Securities Exchange Act. 459 U.S. at 382, 390. 

The Court also noted that in prior cases, it had found the

preponderance standard applicable for "imposition of even severe

civil sanctions." Id. at 389; see also Grogan v. Garner, 498 U.S.

279, 291 (1991) (Bankruptcy Code fraud provision); Ramsey v. United

Mine Workers of Am., 401 U.S. 302, 311 (1971)(antitrust treble

damages). The one recent decision looking the other way, Microsoft

Corp. v. i4i Ltd. Partnership, 131 S. Ct. 2238 (2011), rested

primarily on statutory interpretation. Id. at 2249-50, 2252.

6E.g., Broun et al., 2 McCormick on Evidence § 340 at 488-89

(6th ed. 2006); Sand et al., 4 Modern Federal Jury Instructions:

Civil, Instruction 73-3 (2012). Compare Addington v. Texas, 441

U.S. 418, 433 (1979) (establishing clear and convincing evidence

burden of proof for civil commitment).

-10-
Authority in other circuits is divided on whether in

Lanham Act cases to equate fraud or willfulness with a heightened

standard of proof,7

 but the modern guidance of Herman & MacLean and

Grogan supports the ordinary preponderance standard where, as here,

the statutory language does not call for more. The omission of the

term willful in the relevant portion of section 1117 contrasts with

its explicit use elsewhere in section 1117. So, as a matter of

first impression in this circuit, we think preponderance the proper

standard.

Finally, Fishman claims that the district judge erred in

responding to two questions from the jury during its deliberations

relating to willfulness. One question in substance was "whether a

failure to act can constitute willfulness"; to this the judge gave

the jury the reporter's transcript of the oral instruction on

willfulness (which contained a confusing mis-transcription to which

neither side objected after review). Fishman Transducers v. Paul,

2011 WL 1157529 at *1 n.1 (D. Mass. March 29, 2011). Fishman did

preserve a claim that the answer to the question should merely have

been "yes," but the judge could regard this as an oversimplified

answer and properly refuse to give it.

7Compare Versa Prods. Co. v. Bifold Co. (Mfg.), 50 F.3d 189,

207-08 (3d Cir.) (applying a heightened burden of proof to the

intent to confuse or deceive in trade dress infringement cases),

cert. denied, 516 U.S. 808 (1995), with Harrods Ltd. v. Sixty

Internet Domain Names, 302 F.3d 214, 226-27 (4th Cir. 2002)

(applying a preponderance of the evidence standard to the bad faith

requirement in the Lanham Act's cyberpiracy provision).

-11-
The second jury question was, "Is HSN responsible for

their own published document on the worldwide web when they are

aware of its incorrect information?". In response, the judge

sought to explain that HSN was "responsible" for the content of its

own website but, at least as to willfulness, not for something HSN

did not control. This was reasonable enough given evidence that

Fishman concedes that HSN sent warning letters to third party sites

later selling the Esteban guitars with the erroneous claims to

Fishman products.

Although the jury instructions were (understandably)

mistaken on burden of proof and potentially confusing on

recklessness, neither was harmful to Fishman because the evidence

was insufficient to justify a finding of willfulness even under the

correct preponderance standard and a perfect understanding of

willfulness. Under the standard governing review of jury verdicts,

we conclude that no reasonable jury could have found a willful

violation in this case.

Force, the maker of the guitar, orally represented to HSN

that it included a "Fishman-type" pickup and in a product

specification sheet noted that the guitars had a Fishman pickup. 

HSN relayed this information to Paul before he went on-air. 

Nothing indicates that defendants were any more than negligent in

passing on that representation. In particular, no evidence

indicated that the defendants had knowledge of the infringement or

-12-
were reckless in failing to learn of it. When told of the error

HSN promptly stopped claiming that its pickups were Fishman

products.

Paul did say on the air that he had personally selected

Fishman's products for the guitars, which he admitted at trial was

not true; and he praised the Fishman pickups in terms exceeding

anything represented by Force Limited--for example, that the

pickups in the guitars were "top of the line." But none of these

statements remotely suggests that Paul knew--or was reckless in not

so suspecting--that HSN was mistaken or that Force was lying when

they said that the pickups in "his" guitars were Fishman pickups.

This brings us to damages and Fishman's other main basis

for appeal. Single damages can be awarded without a finding of

willfulness. But damages awards turn out to be comparatively rare

in trademark cases primarily, it appears, because of the difficulty

of proving them. Michael J. Freno, Trademark Valuation: Preserving

Brand Equity, 97 Trademark Rep. 1055, 1062-63 (2007). Various

damage theories are available, but proving causation and amount are

very difficult unless the two products directly compete (an issue

to which we return), and most cases that go beyond injunctive

relief involve an attempt to recoup the infringer's profits. Id.

at 1070.

The problem--of which this case is a good illustration--

is not theory but proof. The most straightforward theory of

-13-
damages would be that the infringement had diverted specific sales

away from Fishman. See Aktiebolaget Electrolux v. Armatron Int'l,

Inc., 999 F.2d 1, 6 (1st Cir. 1993) (denying damages absent lost

sales). But Fishman does not sell guitars to consumers; rather, it

supplies its pickups to other guitar makers who in turn compete

with Esteban, or directly to consumers through retail channels, who

buy them to be installed in their own guitars.

Accordingly, on this theory, Fishman had to show--to take

the most obvious possibility--that the wrongful use of the Fishman

name during part of 2006 to describe pickups on the Esteban guitars

diverted sales from outlets--often big box stores--who purchased

competing guitars from guitar makers whom Fishman supplied; that

this sales diversion in turn reduced new orders to such competing

guitar makers; and that those manufacturers reduced their orders of

Fishman pickups for some period, largely after the defendants'

infringement ceased.

The district judge rejected the testimony of Fishman's

expert, Thomas Britven, finding that Britven furnished neither a

figure or range for damages suffered by Fishman nor supplied the

jury with data from which it could make an intelligent estimate of

Fishman's damages, if any, caused by the infringement. Fishman's

founder, Larry Fishman, also testified but the judge excluded him

from testifying about the cause of the damages. Fishman says that

these exclusionary rulings were error.

-14-
Although some evidentiary rulings involve issues of fact

or law, this one was a classic judgment call reviewed for abuse of

discretion. Lynch v. Boston, 180 F.3d 1, 16 (1st Cir. 1999). The

question is whether the information tendered by the expert and by

Larry Fishman would help the jury to determine a fact in issue, 

Fed. R. Evid. 702; see also Daubert v. Merrell Dow Pharms., Inc.,

509 U.S. 579 (1993). These witnesses' proffered testimony together

was the only substantial damage evidence offered; even taken

together, we agree that this evidence would not allow a reasonable

jury to assess damages.

Britven sought to testify (supplying the relevant

figures) that Esteban sold lots of guitars in 2006 and that (by

contrast to 2006) Fishman's low-end pickup sales both dipped and

missed Fishman projections for 2007. Larry Fishman sought to opine

that Esteban guitar packages did decrease Fishman pickup sales. 

But Fishman's brief fails to explain how the jury was to make even

a crude estimate of diverted sales from the information sought to

be supplied.

Fishman's brief does offer generalities--that experts are

not always required for damages, that precision may itself be

misleading, and so on--but it does not offer a response to the

judge's concern that the jury was essentially being left adrift. 

Damage experts customarily provide the jury some means, even if the

premises and line of extrapolation are open to debate, to make a

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reasonable estimate. That task, quite difficult where the products

are not substitutes, was not done in this instance.

The essence of Britven's support for actual damages is

that while Fishman projected its revenues from sales to

manufacturers to increase from 2006 to 2007, those revenues instead

decreased by nearly $750,000, felling short of projections by

nearly $1.5 million. But by limiting annual sales data to the

period from 2005 through 2007, Britven does not address the

possibility that Fishman's decline in sales was merely an ordinary

year-to-year fluctuation.

Britven also reports, based on discussions with Fishman's

management, that several of Fishman's customers reduced orders in

2007 after having trouble selling guitars with Fishman pickups

through retail channels, but neither Britven nor Larry Fishman

provided any information regarding the reasons that Fishman's

customers suffered declining retail sales, or why it should be

supposed that Esteban's infringement had anything to do with this

decline.

Nor does Britven's report provide any basis for the jury

to attribute all, or any particular amount of the decline in

revenue or the shortfall from projections, to infringement or false

advertising by Esteban. Further, Britven's report contains no

information about Fishman's profit margins or any financial

information other than revenues that a jury could use to estimate

-16-
lost profits, which is the ultimate measure of damages. Visible

Sys. Corp., 551 F.3d at 75.

Economists do have means of moving from data indicating

correlation to a fair inference of causation. In this case, such

means may have included direct testimony from customers, market

research surveys of guitar purchasers as to their reasons for

purchases, or sales data for Fishman's competitors that might show

that Fishman's sales decline was unique or unusual rather than part

of broader industry wide conditions.8 These are often difficult,

time-consuming and expensive efforts; but without them, Britven's

report was merely a basis for jury speculation and his testimony

was properly excluded.

The expert added to his report specific figures to show

Esteban's revenues but they were mainly relevant to the

disgorgement of profits theory, and surely not all attributable to

the trademark violation. And, while the expert report also

includes million dollar estimates for a campaign of "corrective

advertising" allegedly planned by Fishman, proposed expenditures by

the plaintiff that are likely to boost sales are not self-verifying

damages from infringement.

8

According to Britven, American sales of acoustic/electric

guitars--which are acoustic guitars equipped with a pickup

amplification system--declined from 242,000 in 2006 to 208,000-

213,000 in 2007, a decline of 12-14 percent. By comparison,

Fishman's sales to guitar manufacturers declined from $7,398,789 in

2006 to $6,652,658 in 2007, a decline of just 10 percent. 

-17-
Fishman's president himself was allowed to testify as to

some specific information--e.g., identified reductions in orders by

specific Fishman guitar maker customers--but neither he nor any

other witness offered evidence that Esteban's infringements had

caused the customers to reduce their orders. In the absence of

organized economic evidence that allowed the jury to estimate

damages, this information would not have been sufficient for an

award of damages. 

Fishman next argues that an alternative ground for

awarding damages based on defendant's profits was wrongly rejected

by the district judge when he ruled that Fishman pickups and

Esteban guitars were not in "direct competition." Under this

direct competition theory, the plaintiff and defendant products may

be such complete substitutes that a sale by the infringer under the

infringed party's mark is almost automatically a lost sale by the

plaintiff, so the issue of causation almost vanishes from the case.

And, if the two companies are in the same line of

business, defendant's profits may be presumptively similar to what

plaintiff would have earned on the sale. Congress has further

provided that where profits are the measure of recovery, the

plaintiff need only prove the defendant's sales and the defendant

must prove costs and other deductions. 15 U.S.C. § 1117(a); Tamko

Roofing, 282 F.3d at 37. So, if direct competition had been

-18-
established, the evidence tendered of Esteban's revenues might have

been sufficient.

The case law amply supports this approach where there is

direct competition, Aktiebolaget Electrolux, 999 F.2d at 5 ("[A]

plaintiff seeking an accounting of defendant's profits must show

that the products directly compete, such that defendant's profits

would have gone to plaintiff if there was no violation . . . ."),

but not otherwise. Valmor Prods. Co. v. Standard Prods. Corp., 464

F.2d 200, 204 (1st Cir. 1972) ("Since Standard's products do not,

concededly, compete with Valmor's, Standard can hardly be thought,

in the absence of fraud or palming off, to be a trustee for profits

which but for the infringement would have been Valmor's . . . .").

But a showing of direct competition requires a

substantial degree of equivalence and substitutability,9 and a

pickup is not a substitute for a guitar but merely a potential

ingredient, and is even less of a substitute for a package that

included additional materials. See Quabaug Rubber Co. v. Fabiano

Shoe Co., 567 F.2d 154, 162 (1st Cir. 1977). So while HSN's

violations could damage Fishman sales, no plausible one-to-one

9

E.g., Bos. Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d

1, 26 (1st Cir. 2008); Members First Fed. Credit Union v. Members

1st Fed. Credit Union, 54 F. Supp. 2d 393, 402 n. 15 (M.D.Pa.

1999). The phrase has a similar meaning outside of the trademark

context, see, e.g., Aegerter v. City of Delafield, 174 F.3d 886,

891 (7th Cir. 1999)(telecommunications); United States v. Gillette

Co., 828 F. Supp. 78, 83 (D.D.C. 1993) (Clayton Act).

-19-
equivalent exists here as the number of sales diverted or the

profits transferred.

What remains are two distinct claims which the district

court declined to entertain. The first was for trademark

counterfeiting under section 1114 of the Lanham Act. The district

court rejected any attempt to pursue this theory because it was not

pled in the complaint which, for federal claims, relied only

specifically upon trademark infringement and unfair competition

under section 1125(a). Whether or not the facts in the complaint

might have supported a trademark counterfeiting claim does not

matter so late in the process (on the eve of trial, over four years

after the initial filing of the complaint).

Sections 1114 and 1125 are distinct claims and support

different remedies. Compare 4 McCarthy on Trademarks & Unfair

Competition § 25:10 with Res. Developers, Inc. v. Statue of

Liberty-Ellis Island Found., Inc., 926 F.2d 134, 139 (2d Cir.

1991). Fishman could not wait until discovery was over and then

announce without amendment of the complaint that it wanted to

assert a new federal cause of action.

The second excluded claim, under Massachusetts' unfair

competition statute, was rejected by the district court because it

requires that the wrongful actions and transactions "occurred

primarily and substantially within the commonwealth [of

Massachusetts]." Mass. Gen. Laws Ann. ch. 93A, § 11 (2011). 

-20-
Fishman concedes that the HSN advertising was not particularly

targeted to Massachusetts customers and that no more than a "small

portion" of HSN's guitar sales occurred within Massachusetts.

Instead Fishman argues that section 11's "primarily and

substantially" test--most recently framed by Massachusetts' highest

court as a "center of gravity" test, Kuwaiti Danish Computer Co. v.

Digital Equip. Co., 781 N.E.2d 787, 799 (Mass. 2003)--is

nonetheless satisfied because Fishman is a Massachusetts-based

corporation so all of the harm occurred there. That a

Massachusetts company was arguably deprived of sales may be

relevant, In re Pharm. Indus. Average Wholesale Price Litig., 582

F.3d 156, 194 (1st Cir. 2009), but here the direct impact of the

deception--to the extent it occurred--was on customers all over the

country, few of whom were in Massachusetts.

Where wrongdoing is not focused on Massachusetts but has 

relevant and substantial impact across the country, the "primarily"

requirement of section 11 cannot be satisfied. "Kuwaiti Danish did

not retreat from the proposition that, if the significant contacts

of the competing jurisdictions are approximately in the balance,

the conduct in question cannot be said to have occurred primarily

and substantially in Massachusetts." Uncle Henry's Inc. v. Plaut

Consulting Co., Inc., 399 F.3d 33, 45 (1st Cir. 2005).

Affirmed.

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