Opinion ID: 6500055
Heading Depth: 3
Heading Rank: 1

Heading: Disgorged Profits Award

Text: 15 U.S.C. § 1117(a) grants district courts the power, based on principles of equity, to award disgorged profits and to increase or decrease a jury’s monetary award. The statute “grants a district court a great deal of discretion in fashioning an appropriate remedy in cases of trademark infringement.” U.S. Structures, Inc. v. J.P. Structures, Inc., 130 F.3d 1185, 1191 (6th Cir. 1997). Here, the district court did not abuse that broad discretion when it increased the jury’s profits award. Enhancement of profits under § 1117(a) is used to “provide proper redress to an otherwise undercompensated plaintiff where imprecise damage calculations fail to do justice, particularly where the imprecision results from defendant’s conduct.” La Quinta Corp. v. Heartland Props. LLC, 603 F.3d 327, 343 (6th Cir. 2010). That’s exactly what the district court did here. As a result of Core Health’s mismanagement and failures at the discovery stage, the profits calculation made by the jury was imprecise. Specifically, the only evidence that Core Health presented to prove costs was a summary spreadsheet of the “standard cost” of goods with no information about the actual cost of the products. And the only witness that Core Health had testify about the cost spreadsheet could not fill these gaps. The witness had not participated in the calculation of those costs. For these reasons, the district court enhanced the profits award to ensure that Max Rack was justly compensated, despite the imprecision resulting from Core Health’s conduct. Nos. 20-3598/3600 Max Rack, Inc. v. Core Health & Fitness, LLC, et al. Page 36 Further, Core Health argues on appeal that the district court abused its discretion by doubling the jury’s profits award because any doubt about its costs could only decrease the award. But it is equally possible that the jury overestimated the costs based on the limited summaries Core Health provided. Core Health urged the court to accept its “standard cost” evidence. But Max Rack disputed that evidence, and it would not be an abuse of discretion for the court to accept Max Rack’s estimation of costs. Ultimately, I would affirm the district court’s decision to enhance the profits award. Enhancement of profits was necessary to provide proper redress to Max Rack. For much the same reasons, I also do not consider it an abuse of discretion that the district court did not vacate the jury’s profits award.