Opinion ID: 709490
Heading Depth: 2
Heading Rank: 3

Heading: The Effect of Vacatur of the Lanham Act Violation on the Judgment

Text: 66 The district court, as previously noted, held that Lollytogs had willfully violated the Copyright Act, the Lanham Act, and New York unfair competition law, and it issued its injunction on the basis of each of these violations. Similarly, the court awarded attorney's fees under the force of both the Copyright Act and the Lanham Act. Memorandum Order of August 22, 1994, at 1. Both of these remedies, accordingly, are affirmable under the Copyright Act alone, as are the court's awards of infringing profits and statutory damages, which were made under the Copyright Act alone. (Attorney's fees under the Copyright Act are addressed infra, in Part VI.) Only two aspects of the judgment were ordered solely under the Lanham Act and thus must be vacated--its order, pursuant to 15 U.S.C. Sec. 1118, that Lollytogs allow Knitwaves to verify the infringing sweaters remaining in its possession and to witness their destruction, and its award, pursuant to 15 U.S.C. Sec. 1117, of $12,000 to Knitwaves in lost profits. 67 As to the order of verification of destruction, we note that the Copyright Act allows a very similar remedy: a court may, as part of a final judgment or decree, order the destruction or other reasonable disposition of all infringing items. 17 U.S.C. Sec. 503(b). Thus, on remand, without reaching the Lanham Act issue, the district court may order this relief. 68 The court's award to Knitwaves of $12,000 in lost profits, on the other hand, is vacated and cannot be reinstated under the Copyright Act, as to do so would duplicate the recovery of infringing profits and statutory damages which Knitwaves has been awarded under that act. See Abeshouse v. Ultragraphics, Inc., 754 F.2d 467, 470-71 (2d Cir.1985) (double recovery, as prohibited by Sec. 504(b), may occur when an infringing seller has to disgorge profits on sales that a copyright holder might have made and for which he may therefore claim damages in the form of lost profits); Manufacturers Technologies, Inc. v. Cams, Inc., 728 F.Supp. 75, 83-84 (D.Conn.1989) (on sales where plaintiff and defendant competed directly, plaintiff may not recover both defendant's infringing profits and its own lost profits); 3 David Nimmer & Melville B. Nimmer, Nimmer on Copyright, Sec. 14.01[A] (1994). 7 IV. Non-Apportionment of Damages 69 Next, Lollytogs challenges the district court's decision not to apportion its award of wrongful profits. Lollytogs contends that, since Knitwaves' copyrights extended solely to the artwork on Knitwaves' sweaters and did not extend to the skirts or pants with which the sweaters were marketed, the court erred in awarding Knitwaves the profits earned by Lollytogs on Lollytogs' entire matching sets. Instead, Lollytogs contends, the court should have apportioned Lollytogs' profits into sweater profits and profits on skirts and pants, and should have awarded Knitwaves only Lollytogs' profits on the infringing sweaters. See, e.g., Sheldon v. Metro-Goldwyn Pictures Corp., 309 U.S. 390, 402-03, 60 S.Ct. 681, 685, 84 L.Ed. 825 (1940); Orgel v. Clark Boardman Co., 301 F.2d 119, 121 (2d Cir.), cert. denied, 371 U.S. 817, 83 S.Ct. 31, 9 L.Ed.2d 58 (1962). 70 We review the decision of the district court only for clear error, Twin Peaks Productions v. Publications International, 996 F.2d 1366, 1382 (2d Cir.1993), Cream Records, Inc. v. Joseph Schlitz Brewing Co., 864 F.2d 668, 669 (9th Cir.1989) (per curiam), and we find none. Although Knitwaves marketed its tops and bottoms separately, Lollytogs' outfits, the district court recognized, were sold as a set. Accordingly, a customer buying a Lollytogs infringing top would have been forced to buy the matching bottom as well. We think in these circumstances it was fair to conclude, as the district court apparently did, that it was the infringing aspects of the matching sets--the appropriated sweater designs--that gave the sets their value, cf. Business Trends Analysts, Inc. v. Freedonia Group, Inc., 887 F.2d 399, 407 (2d Cir.1989), and that accordingly all profits made by Lollytogs on the sales of its matching skirts and pants were fairly attributable to Lollytogs' infringement of Knitwaves' copyrighted sweaters. See id. (burden is on infringing party to prove the portion of total profits attributable to non-infringing elements). Given this conclusion, and given the court's finding that Lollytogs' infringement was willful, we cannot say that the district court committed clear error in finding apportionment unwarranted.