Court Opinion

ID: 9487306
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:13:12.075479+00
Date Added: 2024-06-11T17:52:11.672475
License: Public Domain

FAIRCHILD, Circuit Judge,
concurring.
Awarding to a plaintiff the profits which an infringer has derived from his infringement is contemplated by the statute and by the cases. In Sands I Judge Marshall’s estimate that 10% of Quaker’s profit was attributable to the infringement was not sustained.
We directed an award which would not be simply a percentage of Quaker’s profits, which would use a reasonable royalty as a starting point, and which could “take into account the possible need for deterrence, which may involve consideration of the amount of Quaker’s profits.”
We now approve Judge Marshall’s determination of a reasonable royalty. Judge Ripple proposes to remand for a further explanation of the doubling of it. He would remand “to permit the district court to state with more clarity the reasons for the enhancement and to make any alterations in its judgment with respect to enhancement that may be necessary or appropriate in light of this opinion.”
I would prefer to affirm because given the history of this case, the purpose of doubling the royalty is sufficiently clear as deterrent, and within the directions we gave in Sands I.1
One purpose of punishment is deterrence of the actor (as well as others) from future unlawful conduct. But it does not follow that an award for the purpose of deterrence is always a punishment which the penultimate sentence of § 85(a) has been thought to prohibit. The statute itself authorizes the award of profits, and the eases have recognized the legitimate deterrent effect of making infringement unprofitable. See, e.g., Roulo v. Russ Berrie & Co., Inc., 886 F.2d 931, 941 (7th Cir.1989), cert. denied, 493 U.S. 1075, 110 S.Ct. 1124, 107 L.Ed.2d 1030 (1990); Louis Vuitton S.A. v. Lee, 875 F.2d 584, 588 (7th Cir.1989); Otis Clapp & Son, Inc. v. Filmare Vitamin Co., 754 F.2d 738, 744 (7th Cir.1985); Playboy Enterprises v. Baccarat Clothing Co., Inc., 692 F.2d 1272, 1274-1275 (9th Cir.1982) (discussing importance of deterrence in general).
Judge Ripple recognizes that “royalty payments pose difficult problems with respect to the need to ensure that the defendant has been divested of its ill-gotten gain.” He also *1354observes that “[ejnhancement of the damages attributable to a lost royalty in order to ensure that the malefactor, and not the victim, bears the burden of any uncertainty in its calculation is a permissible way of achieving that goal.” Finally, Judge Ripple notes that the district court was concerned that the royalty calculation may not fully compensate STW; given this concern, I believe that the district court permissibly used its discretion to enhance the award for deterrent purposes.
With respect, I view further explanation on remand as an unnecessary exercise. Judge Ripple proposes to affirm the judgment insofar as it awarded the amount calculated as a reasonable royalty, interest thereon, and attorney’s fees. I concur as does Judge Cu-dahy. Judge Ripple would remand for certain determinations with respect to enhancement of the award of a reasonable royalty. Judge Cudahy would wholly deny enhancement.
I would deem it appropriate to affirm the entire judgment, including the enhancement, but neither of my colleagues supports that result. Judge Ripple’s position is significantly closer to mine, and in order to reach a decision supported by a majority, I concur in Judge Ripple’s opinion.

. And, as Judge Ripple acknowledges, "there is evidence in the record that would support an enhancement of the award on this basis [deterrence].”