Court Opinion

ID: 9378238
Source: CourtListenerOpinion
Date Created: 2023-03-09 20:01:28.643487+00
Date Added: 2024-06-11T17:17:19.774621
License: Public Domain

USCA11 Case: 22-11374   Document: 33-1    Date Filed: 03/09/2023   Page: 1 of 9

                                                [DO NOT PUBLISH]
                                 In the
                United States Court of Appeals
                        For the Eleventh Circuit

                         ____________________

                              No. 22-11374
                         Non-Argument Calendar
                         ____________________

       INSTANT ONE MEDIA, INC.,
                                                    Plaintiff-Appellee,
       versus
       EZFAUXDECOR, LLC,

                                                Defendant-Appellant,

       Amber Shank,

                                                           Defendant.

                         ____________________
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       2                      Opinion of the Court               22-11374

                  Appeal from the United States District Court
                     for the Northern District of Georgia
                    D.C. Docket No. 1:19-cv-00540-WMR
                           ____________________

       Before NEWSOM, LAGOA, and BRASHER, Circuit Judges.
       PER CURIAM:
              Instant One Media, Inc. and EZ Faux Decor, LLC both sell
       vinyl adhesive products to resurface countertops and appliances.
       They settled previous litigation in 2017 with an agreement that In-
       stant One would pay EZ $175,000 and EZ would stop using the
       term “instant” within two words of the terms “granite” or “stain-
       less.” Instant One then registered trademarks for “instant granite”
       and “instant stainless.”
              By 2018, EZ was violating that agreement and infringing In-
       stant One’s trademarks. Instant One sued alleging a state-law
       breach-of-contract claim and a federal-law trademark-infringement
       claim. After receiving notice of the suit, EZ changed its websites
       without preserving copies. EZ also did not keep or produce change
       logs for its Amazon or EBay content. As a sanction for the spolia-
       tion of its own website, the district court ordered that the jury be
       instructed with a rebuttable presumption that EZ violated the set-
       tlement agreement and infringed the trademark on its website.
       The sanctions didn’t extend, however, to EBay or Amazon sales.
             The district court granted partial summary judgment to In-
       stant One as to liability for breach of contract. The liability for
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       22-11374                Opinion of the Court                          3

       trademark infringement and damages as to both claims went to
       trial. The trial consisted of only two witnesses. Instant One called
       its President to testify to the primary issues and its lawyer to testify
       to his fees. EZ called no witnesses.
              A jury found EZ liable on the trademark claim. It awarded
       Instant One three types of damages: $275,000 actual damages for
       either the breach of contract or trademark infringement; $500,000
       in disgorgement on the trademark claim; and $260,000 in attor-
       neys’ fees under a state-law fee-shifting statute.
            The district court then denied EZ’s renewed motion for
       judgment as a matter of law and entered judgment for Instant One.
       EZ appeals that denial with respect to each type of damages.
              We review the denial of a renewed motion for judgment as
       a matter of law de novo. AcryliCon USA, LLC v. Silikal GmbH,
       985 F.3d 1350, 1366 (11th Cir. 2021). We can grant the motion only
       if “there is no legally sufficient evidentiary basis for a reasonable
       jury to find for the non-moving party.” Id.
              After careful review, we affirm the disgorgement and attor-
       neys’-fees awards. Because Instant One failed to provide sufficient
       evidence of lost profits under either claim, we vacate the denial of
       the renewed judgment as a matter of law with respect to actual
       damages and remand that issue for further consideration.
                                          I
            Instant One’s President testified to Instant One’s actual dam-
       ages—which she claimed were lost profits of $562,368. The jury
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       4                      Opinion of the Court                22-11374

       returned an award of $250,000. EZ argues the evidence was insuf-
       ficient to support even this award for two reasons: specificity and
       causation. Given an error in the district court’s ruling on specific-
       ity, we remand for further consideration without addressing causa-
       tion.
               EZ claims that the lost-profits calculation was unsupported
       and speculative. Instant One initially sought to submit an exhibit
       containing details for the $562,368 calculation along with 199 pages
       of receipts for advertising and consulting expenses. After a lengthy
       discussion outside the presence of the jury, including a voir dire
       examination of the President about the contents of the calculation,
       the court sustained EZ’s objection that the exhibit was hearsay.
       The next day, Instant One proceeded with the President’s testi-
       mony but used a revised exhibit that included only the receipts.
       And Instant One’s President never testified with specificity about
       how she arrived at the calculation. She stated the number multiple
       times. She testified that she provided the calculation to the defend-
       ants. But her testimony about the calculation process was limited
       to cross-examination and re-direct. During cross-examination, she
       discussed at a high-level how she estimated lost profits by consid-
       ering lost sales and their associated expenses—but never quantified
       those components. When asked for specifics, she several times re-
       sponded, “I don’t remember.” On redirect, Instant One’s attorney
       solicited testimony confirming that the President knew enough
       about the company to make an educated estimate and that the
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       22-11374                Opinion of the Court                          5

       already 199-page exhibit would have been much longer if they in-
       cluded more detail.
              In summary, Instant One provided (i) business records
       showing revenue from Amazon sales for three isolated months in
       2017 and 2018, (ii) testimony that sales from the two trademarked
       products were $2.3 million over the 3½ year period, (iii) testimony
       that promotional expenses were $300,000 over the same period,
       and (iv) testimony that it calculated $562,368 in estimated losses
       after subtracting from a forecasted sales number (which it never
       provided) promotional expenses (of which it did provide evidence)
       as well as costs of goods sold, utilities, rent, payroll, and taxes (for
       none of which Instant One provided any evidence). Instant One
       did not provide a single financial statement or financial forecast.
              When ruling on EZ’s renewed motion for judgment as a
       matter of law, the district court implied that Doc. 160-5 was a “doc-
       ument[] that show[s] . . . [the President’s] projected profits calcula-
       tion” and cited Doc. 170 at 119:9–25 as containing the President’s
       testimony about the forecast. Critically, however, that testimony
       was from the voir dire about the excluded exhibit. The jury had
       neither a version of Doc. 160-5 containing a projected profits calcu-
       lation nor the President’s detailed testimony about the forecast.
              Instant One, therefore, failed to present sufficient evidence
       to satisfy Georgia’s state-law standard. In order to recover lost
       profits for a breach of contract, Instant One needed to “provide ‘in-
       formation or data sufficient to enable [the trier of fact] to estimate
       the amount of the loss with reasonable certainty.’” AcryliCon
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       6                       Opinion of the Court                  22-11374

       USA, LLC v. Silikal GmbH, 985 F.3d 1350, 1370 (11th Cir. 2021)
       (quoting Bearoff v. Craton, 830 S.E.2d 362, 373 (Ga. App. 2019))
       (alteration in original). Where, as here, a plaintiff fails to show both
       “a track record of profitability” and “figures showing . . . anticipated
       revenues and expenses,” id. at 1371 (quoting Bearoff, 830 S.E.2d at
       373), the plaintiff cannot recover.
              Recovery for the state-law contract claim, therefore, is lim-
       ited to actual expenses incurred—such as those documented in
       Doc. 160-5—which a jury could have concluded were caused by
       the breach.
              Instant One also failed to satisfy the Lanham Act’s lower
       standard for establishing lost profits. Actual damages under the
       Lanham Act “are not rendered uncertain because they cannot be
       calculated with absolute exactness.” Ramada Inns, Inc. v. Gadsden
       Motel Co., 804 F.2d 1562, 1565 (11th Cir. 1986) (quoting Borg-
       Warner Corporation v. York-Shipley, Inc., 293 F.2d 88, 95 (7th Cir.
       1961)). “It is sufficient if a reasonable basis of computation is af-
       forded.” Id. (quoting Borg-Warner, 293 F.2d at 95). Conclusory
       testimony about the estimated amount of profits and generic com-
       ments on her calculation process do not provide a sufficient “basis
       of computation” for a jury to determine actual damages under the
       Lanham Act.
            We remand for the district court to consider whether actual
       damages other than lost profits adequately support the jury’s actual
       damages award and to consider, in the first instance, EZ’s causation
       arguments.
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       22-11374               Opinion of the Court                         7

                                         II
              EZ also challenges the disgorgement award. At trial, Instant
       One produced evidence estimating gross revenue for EZ on its
       website, on EBay, and on Amazon. EZ challenges whether these
       sales were “attributable to” infringing conduct. In effect, EZ claims
       Instant One failed to carry its alleged burden to demonstrate gross
       sales from infringing products. But EZ misunderstands Instant
       One’s burden.
               “In assessing profits the plaintiff shall be required to prove
       defendant’s sales only; defendant must prove all elements of cost
       or deduction claimed.” 15 U.S.C. § 1117(a). The plaintiff’s burden
       is merely to establish business-wide gross sales and some instances
       of infringement. Wesco Mfg., Inc. v. Tropical Attractions of Palm
       Beach, Inc., 833 F.2d 1484, 1488 (11th Cir. 1987). Consistent with
       the Eleventh Circuit pattern charges, that is how the district court
       instructed the jury in this case:
              In determining EzFauxDecor, LLC’s profits, Instant
              One Media, Inc. is only required to prove
              EzFauxDecor, LLC’s gross sales. EzFauxDecor, LLC
              may then prove the amount of sales made for reasons
              other than the infringement.

       Doc. 171 at 212; see also Eleventh Circuit Pattern Jury Instructions
       (CIVIL) § 5.13 at 11 (2022) (same).
               EZ failed to introduce evidence that any sales were not due
       to infringement. In its reply brief, it argues that the product titles
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       8                        Opinion of the Court                   22-11374

       in Instant One’s exhibits show that the products weren’t infringing.
       But given that infringement could occur outside a product title and
       EZ’s failure to track changes to product listings on Amazon and
       EBay, the evidence to which EZ points wouldn’t preclude a rea-
       sonable jury from disagreeing with EZ. We therefore affirm the
       district court’s denial of the renewed motion for judgment as a mat-
       ter of law with respect to the disgorgement award. 1
                                          III
               Georgia law allows juries to award attorneys’ fees when the
       plaintiff requests them and “the defendant has acted in bad faith,
       has been stubbornly litigious, or has caused the plaintiff unneces-
       sary trouble and expense.” O.C.G.A. § 13-6-11. In reviewing this
       claim on appeal, we respect Georgia’s decision to “place[] the ques-
       tion of attorneys’ fees within the province of the jury,” and we
       “should not vacate such an award unless there was absolutely no
       evidence to support it.” LaRoche Indus., Inc. v. AIG Risk Mgmt.,
       Inc., 959 F.2d 189, 193 (11th Cir. 1992); see Am. Med. Transp. Grp.,
       Inc. v. Glo-An, Inc., 509 S.E.2d 738, 741 (Ga. App. 1998).
             Here, the jury determined that EZ’s use of the trademarks—
       in breach of the contract—was willful. This determination was
       based on evidence of bad faith in the underlying transactions—for

       1Instant One’s disgorgement award is not affected by the ruling on actual
       damages. Lanham Act disgorgement is available without showing actual dam-
       ages. See Hard Candy, LLC v. Anastasia Beverly Hills, Inc., 921 F.3d 1343,
       1352 (11th Cir. 2019).
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       22-11374                   Opinion of the Court                                 9

       example, emails stating a desire to hide their use of the terms. We
       therefore affirm the district court’s denial of the motion for judg-
       ment as a matter of law with respect to attorneys’ fees. 2
                                              IV
              Because evidence supports the jury’s disgorgement and at-
       torneys’-fees awards but the district court erred in ruling on the
       actual damages award, we affirm in part, vacate in part, and re-
       mand for further proceedings.
               AFFIRMED in part, VACATED in part, and REMANDED.

       2 We only address EZ’s argument that there was insufficient evidence of bad
       faith. We do not address—and leave for subsequent proceedings—the issue
       whether our ruling on actual damages affects the attorneys’ fees award. See,
       e.g., Steele v. Russell, 424 S.E.2d 272, 273 (Ga. 1993) (“[E]xpenses of litigation
       recoverable pursuant to OCGA § 13–6–11 are ancillary and may only be re-
       covered where other elements of damage are also recoverable.”).