Court Opinion

ID: 51502
Source: CourtListenerOpinion
Date Created: 2010-04-26 01:06:10+00
Date Added: 2024-06-11T12:43:12.874055
License: Public Domain

[DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT                      FILED
                      ________________________          U.S. COURT OF APPEALS
                                                          ELEVENTH CIRCUIT
                                                             February 14, 2007
                             No. 06-14432                  THOMAS K. KAHN
                         Non-Argument Calendar                 CLERK
                       ________________________

                  D. C. Docket No. 04-03260-CV-TWT-1

OPTIMUM TECHNOLOGIES, INC.,

                                                           Plaintiff-Appellant,

                                  versus

HOME DEPOT U.S.A., INC.,
ACE HARDWARE CORPORATION,

                                                        Defendants-Appellees.

                       ________________________

                Appeal from the United States District Court
                   for the Northern District of Georgia
                     _________________________

                           (February 14, 2007)

Before BLACK, MARCUS and WILSON, Circuit Judges.

PER CURIAM:
      Optimum Technologies, Inc. (“Optimum”) filed suit against Home Depot,

Inc. (“Home Depot”) alleging that Home Depot committed trademark infringement

in violation of the Lanham Act, 15 U.S.C. § 1114, and false advertising in violation

of 15 U.S.C. § 1125(a). Home Depot sought partial summary judgment as to

Optimum’s claim for monetary damages under the Lanham Act and for Optimum’s

claim of false advertising. The district court granted Home Depot’s motion. The

district court found that Optimum’s claim for monetary damages, which consisted

of Home Depot’s profits, attorney fees, and enhanced damages, were not

appropriate under the facts of this case. Optimum appeals the district court’s

decision concerning Optimum’s claim for monetary damages. Optimum does not

appeal the court’s order dismissing the false adverting claim.

                                  BACKGROUND

      Optimum is a family owned company that sells a variety of floor related

products. Optimum’s best selling product is the Lok-Lift Gripper (“Lok-Lift”).

This product is applied in strips to the back of rugs and mats to secure them in

place and prevent slippage on hard floors and carpets. Optimum is the registered

owner of the Lok-Lift mark.

      From 1994 until January 2003, Optimum sold the Lok-Lift product to Home

Depot through a joint venture partnership between Optimum and Henkel Consumer

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Adhesives, Inc. (“Henkle”). Pursuant to this partnership, Henkle purchased the

Lok-Lift product from Optimum then distributed it to various retailers, including

Home Depot. In 1998, Henkle began developing its own material that could be

used to hold carpets and mats in place on floors. Henkle’s product, which was

later named Hold-It for Rugs (“Hold-It”), is similar to Optimum’s Lok-Lift

product; however, the Hold-It product is not intended to be used to hold rugs in

place on carpets, only floors.

      In October 2002, Henkle provided Home Depot with notice that it intended

to substitute its Hold-It product in the place of the Lok-Lift product. Henkle began

the announced product change sometime between December 2002 and January

2003. As the product change over occurred, Henkle sent Home Depot Hold-It with

the same product number and tracking information as the Lok-Lift product.

Therefore, Home Depot’s computer system did not reflect that the products had

changed. Accordingly, Home Depot did not update its shelf tags, which still bore

the name Lok-Lift, and Home Depot’s cash register receipts reflected that Lok-Lift

had been purchased even if Hold-It had actually been purchased. However, the

Hold-It product that was sold at Home Depot was packaged and marked with the

name Hold-It and had no reference to Lok-Lift or Optimum.

      In April 2004, Optimum sent Home Depot a courtesy copy of the complaint

                                          3
that it had filed against Henkle for breach of confidential relationship, breach of

fiduciary duty, fraud, fraudulent concealment, negligent misrepresentation, and

trademark and trade dress infringement. (Doc. No. 69, exhibit 8). The letter

informed Home Depot that one issue in the suit concerned the products Home

Depot sold through Henkle. The letter also noted that Home Depot was not named

as a defendant in the litigation and did not request that Home Depot take any

action.1 Optimum claims that when it visited Home Depot stores, it pointed out to

Home Depot store personnel that Home Depot was improperly using the Lok-Lift

mark. In September 2004, counsel for Optimum sent Home Depot another letter.

In this letter, Optimum stated that Home Depot was continuing to infringe upon

Optimum’s Lok-Lift mark by having shelf tags that bore the Lok-Lift name and

cash register receipts reflecting a purchase of the Lok-Lift product when the Hold-

It product was the product actually purchased. In response to this letter, Home

Depot sent out an emergency maintenance request to try and rectify these concerns.

(Doc. 69, exhibit 16). Home Depot also requested that Henkle coordinate visits to

each Home Depot store to make sure that the Hold-It product was being properly

displayed. On November 5, 2004, Optimum filed this lawsuit against Home

Depot.

      1
         On August 5, 2004, Optimum also issued a subpoena decus tecum to Home Depot in
connection with Optimum’s lawsuit against Henkle.

                                            4
       In its partial motion for summary judgment, Home Depot argued that even if

it had infringed upon Optimum’s mark, Home Depot’s actions did not justify an

award of its profits, attorney fees, or enhanced damages. The district court agreed

and granted Home Depot’s motion.2

                                 STANDARD OF REVIEW

       We review a district court’s grant of summary judgment de novo. Vason v.

City of Montgomery, Ala., 240 F.3d 905, 906 (11th Cir. 2001) (per curiam). The

Lanham Act confers broad discretion upon the district court to fashion a remedy

and determine the proper relief due an injured party. See 15 U.S.C. § 1117(a);

Burger King v. Weaver, 169 F.3d 1310, 1315 (11th Cir. 1999). We review the trial

court’s exercise of its discretion for an abuse of discretion. Id.

                                         DISCUSSION

       Under its claim for trademark infringement, Optimum sought, in addition to

injunctive relief, monetary relief in the form of profits, attorney fees and costs, and

enhanced damages.3 The Lanham Act provides that, subject to the principles of

equity, a successful plaintiff may recover: (1) defendant’s profits, (2) any damages

       2
          On July 26, 2006, parties stipulated to the dismissal with prejudice of Optimum’s
prayer for injunctive relief. On July 27, 2006, the district court directed that final judgment be
entered in favor of Home Depot.
       3
           Optimum did not seek to recover actual damages.

                                                  5
sustained by the plaintiff, and (3) costs of the action. 15 U.S.C. § 1117(a).4 In an

exceptional case, the district court may award attorney fees to the prevailing party.

Guided by principles of equity, the district court found that even if Home Depot

had infringed upon Optimum’s Lok-Lift mark, Optimum was not entitled to any of

these forms of monetary relief. For the reasons stated herein, we agree.

       A.     Profits

       This Court has determined that an accounting of a defendant’s profits is

appropriate where: (1) the defendant’s conduct was willful and deliberate, (2) the

defendant was unjustly enriched, or (3) it is necessary to deter future conduct. See

Howard Johnson Co., Inc. v. Khimani, 892 F.2d 1512, 1521 (11th Cir. 1990).

There is scant evidence in the record that would suggest that Home Depot’s

conduct was willful. We have described a willful violation of a trademark

occurring where the infringer was “knowingly and deliberately cashing in upon the

good will of [the infringed].’” Burger King v. Mason, 855 F.2d 779, 781 (11th Cir.

1988) (per curiam)(quoting Wolf v. Nation Lead Co., 272 F.2d 867, 871 (9th Cir.

1959). Home Depot’s action consisted of having outdated shelf tags with

       4
          Optimum also brought a claim for trademark infringement under Georgia common law.
The district court did not separately analyze the state law claim in its order granting summary
judgment. However, this Court has noted that a trademark infringement claim under Georgia
law is reviewed under the same standards as a claim under the Lanham Act. See University of
Georgia Athletic Ass’n v. Laite, 756 F.2d 1535, 1539 n.11 (11th Cir. 1985).

                                               6
Optimum’s Lok-Lift mark and store receipts erroneously reflecting that a customer

had purchased Lok-Lift when that customer actually purchased Henkle’s Hold-It.

Optimum argues that Home Depot’s actions were willful because after Home

Depot was put on notice that it was infringing upon Optimum’s mark, Home Depot

initially took no steps to rectify the situation. Optimum argues that when Home

Depot did take steps to rectify the situation, those steps came about too slowly.

However, the record shows that Home Depot began to change its outdated store

tags and cash register receipts after Optimum sent Home Depot a letter directly

accusing it of infringing upon the Lok-Lift mark. Home Depot began to rectify the

situation before this lawsuit was filed and continued the process until all outdated

store tags were changed and the cash register receipts reflected the proper item

being sold. While Optimum may have wanted this process to progress at a more

rapid pace, this is not evidence that Home Depot’s alleged infringement was

willful. Furthermore, there is no evidence that the existence of outdated store tags

and inaccurate store receipts was based on Home Depot’s attempt to deliberately

cash in on Optimum’s good will. Therefore, Home Depot’s actions of alleged

infringement were not willful.

      We also agree with the district court that there is no evidence of unjust

enrichment. Unjust enrichment occurs when an infringer has “enriched themselves

                                          7
by tapping the reputation and good will of [the infringed].” Khimani, 892 F.2d at

1521 n.9. There is no evidence that any of Home Depot’s sales of Hold-It are

attributable to its alleged infringement of Optimum’s Lok-Lift mark.5

Furthermore, the facts of this case do not present a situation where there is a need

to deter future conduct. There is no evidence that Home Depot was improperly

using the Lok-Lift mark to its financial advantage, and Home Depot has rectified

the allegedly infringing conduct in all of it stores. Based on the specific facts of

this case, the district court did not abuse its discretion in finding that an accounting

of Home Depot’s profits was not an appropriate remedy.

       B.     Attorney Fees

       In “exceptional cases,” the district court has the discretion to “award

reasonable attorney fees to the prevailing party.” 15 U.S.C. § 1117(a). An

exceptional case is “where the infringing party acts in a malicious, fraudulent,

deliberate, or willful manner.” Burger King v. Pilgrim’s Pride Corp., 15 F.3d 166,

168 (11th Cir. 1994) (internal quotation marks omitted). There is no evidence to

suggest that this is an exceptional case. Therefore, the district court did not abuse

       5
          Optimum claims that it is worried about the company going into bankruptcy. However,
there is no evidence that any of Optimum’s financial troubles were attributable to Home Depot’s
use of outdated shelf tags and inaccurate cashier receipts.

                                               8
its discretion in finding that attorney fees was not an appropriate remedy.6

       C.     Enhanced Damages

       The district court may, in its discretion, reduce or enhance the resulting

award up to three times the amount of profits or damages, whichever is greater, as

justice shall require. 15 U.S.C. § 1117(a). “Such an award is discretionary, but it

may not be punitive, and must be based on a showing of actual harm.” Babbit

Electronics. Inc. v. Dynascan Corp., 38 F.3d 1161, 1183 (11th Cir. 1994) (per

curiam). Since Optimum is not entitled to Home Depot’s profits and has not

shown any actual harm, it is not entitled to any enhanced damages.

       Accordingly, upon review of the parties’ briefs and the record, we discern no

reversible error and affirm the decision of the district court.

       AFFIRM.

       6
          The district court also found that Optimum was not entitled to costs. An award of costs
is also within the discretion of the district court, and we find no abuse of this discretion in
finding that an award of costs was not an appropriate remedy. See Planetary Motion, Inc. v.
Techsplosion, Inc., 261 F.3d 1188, 1205 (11th Cir. 2001).

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