Opinion ID: 625108
Heading Depth: 3
Heading Rank: 3

Heading: Damages Enhancement

Text: The plain language of the Lanham Act permits a district court, in its discretion, to enter judgment for any sum above the amount found as actual damages, not exceeding three times such amount. 15 U.S.C. § 1117(a). 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. Such sum in either of the above circumstances shall constitute compensation and not a penalty.  Id. (emphasis added). Thus, although a judge or jury may award up to triple the amount of lost profits, actual damages and costs to compensate a mark holder, the Lanham Act has been construed to expressly forbid the award of damages to punish an infringer. Id.; BASF Corp. v. Old World Trading Co., 41 F.3d 1081, 1096 (7th Cir.1994). The inquiry before us is not whether SKYRIDE's willful infringement justified the district court's enhancement of Skydive Arizona's actual damages. Rather, we must decide whether the district court abused its discretion in enhancing Skydive Arizona's actual damages to punish SKYRIDE. In a Lanham Act case, to penalize defendants for opprobrious conduct is an abuse of discretion. Jurgens v. McKasy, 927 F.2d 1552, 1564 (Fed.Cir.1991) (finding the district court abused its discretion under the Lanham Act when it cited both deterrence and penalizing rationales for trebling damages against a willful infringer). Indeed, enhancement [of damages] is only available to ensure that the plaintiff receives compensation. BASF Corp., 41 F.3d at 1096. In doubling the actual damages, as well as SKYRIDE's actual profits, the district court emphasize[d] the purposefully deceitful nature of Defendants' conduct. The district court's focus on SKYRIDE's seeming disregard for the people they harmed and the reputation they sullied suggests that it enhanced the actual damages award in response to SKYRIDE's base willfulness. See Skydive Arizona, Inc. v. Quattrocchi, et al., No. 2:05-cv-02656-DGC, at 21 (D.Ariz. Mar. 31, 2010). Instead of discussing the appropriate award to compensate Skydive Arizona or to deter SKYRIDE, the district court focused on the need for SKYRIDE to appreciate and accept the wrongfulness of their conduct. Id. Although the district court may have considered a secondary deterrent rationale when it briefly discussed SKYRIDE's knowing refusal to cease its infringing acts, we hold that such possible considerations do not overcome the district court's apparent intent to punish. See Jurgens, 927 F.2d at 1564 (Fed. Cir.1991). The broader context of the court's enhancement discussion reveals its punitive motivation. Accordingly, because the district court's decision to enhance the damages award hinged upon punishing the willful conduct of SKYRIDE, we reverse the district court's actual damages enhancement.