Opinion ID: 766357
Heading Depth: 3
Heading Rank: 2

Heading: Hamil America's Lost Profits

Text: 71 Hamil America raises one issue on cross-appeal: whether the district court erred when it determined that Hamil America could not recover for lost profits that it might have earned from sales to those of its customers who purchased GFI's infringing design. It relies on three facts: (1) Hamil America and GFI had several shared customers; (2) the shared customers bought samples of Hamil America Pattern No. 96 with the probable intention to purchase more Hamil America fabric; and (3) the shared customers did not purchase the fabric from Hamil America after the less expensive version offered by GFI appeared on the market. Hamil America reasons that it is entitled to damages for lost profits, as it would have sold Pattern No. 96 to the shared customers had GFI not made the infringing pattern. It argues that it is entitled to a total judgment against GFI in the amount of $240,782, rather than the $201,049 that was awarded by the district court. 72 GFI argued below that Hamil America should not recover lost profits, because the shared customers would not have purchased the fabric at Hamil America's above-market prices. GFI also pointed out that those customers purchased GFI's fabric several months after they had purchased Hamil America's samples, and concluded that the commercial failure of Hamil America's pattern had nothing to do with the availability of [GFI's] pattern. 73 The district court agreed that the shared customers may well have declined to purchase Hamil America's fabric, due to its higher price, and held that Hamil America could not recover the alleged lost profits. See Hamil America, Inc., 1998 WL 19991, at . 6 The court further noted that Hamil America could not recover both for its hypothetical sales to the shared customers and for GFI's actual sales to those same customers. 7 See id. The court elected to measure GFI's actual profits from sales to the shared customers, rather than speculate as to what Hamil America might have earned had it sold Pattern No. 96 to the shared customers. See id. ([I]n these circumstances, it appears more accurate to measure plaintiff's lost profit on these [alleged sales to the shared customers] by looking to the incremental profit that defendant actually realized on its sales to these accounts.). 74 As Nimmer states, [i]n the absence of convincing evidence as to the volume of sales that plaintiff would have obtained but for the infringement, the measure of lost profits may be rejected as too speculative. Nimmer on Copyright § 14.02[A], at 14-11 (citing Odegard, Inc. v. Costikyan Classic Carpets, Inc., 963 F. Supp. 1328, 1341 (S.D.N.Y. 1997)). The district court rejected Hamil America's request for lost profits as too speculative. In our view, this conclusion was not clearly erroneous. See also Odegard, Inc., 963 F. Supp. at 1340 (When seeking an award of damages for lost sales, the burden is on the plaintiff to demonstrate that it would have made the sales but for the infringing activity.). In the absence of more reliable evidence of Hamil America's lost profits, the district court was entitled to rely on the less abstract calculation of damages from GFI's sales to the shared customers. We therefore affirm on this issue.