Opinion ID: 437571
Heading Depth: 1
Heading Rank: 2

Heading: Denial of profits and damages

Text: 5 With respect to denial of profits and damages, the Act admonishes that [s]uch sum in either of the above circumstances [defendant's profits or plaintiff's actual damages] shall constitute compensation and not a penalty, 15 U.S.C. Sec. 1117. The Supreme Court has held that Congress intended Sec. 35 [Sec. 1117 of the U.S.Code, Title 28] of the Lanham Act to mark the boundaries of the power to award relief in cases arising under the Act. Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 721, 87 S.Ct. 1404, 1409, 18 L.Ed.2d 475 (1967) (reversing a grant of attorney fees under a prior version of the Act that did not provide for such fees). Furthermore, plaintiff must demonstrate the basis for his recovery with specificity, thereby showing that injury or profitable infringement actually occurred. Vuitton Et Fils, S.A. v. Crown Handbags, 492 F.Supp. 1071, 1077 (S.D.N.Y.1979), aff'd, 622 F.2d 577 (2d Cir.1980). See also Caesars World, Inc. v. Venus Lounge, Inc., 520 F.2d 269 (3d Cir.1975) (court cannot grant monetary relief unless there is evidence of actual damage or actual profits in dollars and cents); Electronics Corp. of America v. Honeywell Corp., 358 F.Supp. 1230 (D.Mass.), aff'd per curiam adopting district court opinion, 487 F.2d 513 (1st Cir.1973), cert. denied, 415 U.S. 960, 94 S.Ct. 1491, 39 L.Ed.2d 575 (1974) (court cannot grant damages when plaintiff waived any attempt to show actual harm but nevertheless sought damages under the Act). The district court's findings of no profits and no damages are questions of fact and therefore subject to the clearly erroneous standard of review. See Boston Professional Hockey Association, Inc. v. Dallas Cap & Emblem Manufacturing, Inc., 597 F.2d 71, 76 (5th Cir.1979). 6 Section 1117 of the Act authorizes an accounting for defendant's profits. 1 Although plaintiffs originally sought an accounting, they later eschewed this right. 2 Furthermore, the fact that the defendants saved money on the cabinets does not mean that they realized a profit on them. We therefore hold that the district court properly refused to award plaintiffs this unauthorized measure of profits. 7 Plaintiffs also sought to recover the profit they would have made on the sales to defendants. Again, this is an inappropriate measure of damages under the Act. Plaintiffs are seeking a contract recovery when in fact they had no contract. While plaintiffs in Lanham Act cases often receive profits from lost sales, these sales are sales made by defendants to purchasers who sought to buy plaintiffs' products and instead received defendants'. See Boston Professional Hockey Association, Inc., 597 F.2d at 75. The ultimate purchasers bought new homes with kitchen cabinets in them. The defendants did not usurp any sales from the plaintiffs to these purchasers of homes. We affirm the district court's denial of this requested relief. 8 Plaintiffs also asked for money to reverse advertise to overcome any damage to their reputations that defendants' actions might have caused. However, the plaintiffs introduced no evidence showing any damage to their reputations. Accordingly, we affirm the district court's denial of this award.III. Denial of attorney's fees 9 Section 1117 also provides that the court may award attorney's fees in exceptional cases. The legislative history indicates that a court should only award attorney fees in cases characterized as malicious, fraudulent, deliberate, and willful. S.Rep. No. 93-1400, 93rd Cong., 2nd Sess., reprinted in 1974 U.S.Code Cong. & Ad.News 7132, 7136. The award of attorney's fees is within the discretion of the district court. Id. We hold that the defendants' actions were not exceptional within the meaning of the Act, thus there was no abuse of discretion in denying attorney's fees. 10 AFFIRMED.