Court Opinion

ID: 8873211
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:40:05.132356+00
Date Added: 2024-06-11T17:06:15.135381
License: Public Domain

MOORE, Circuit Judge
(concurring and dissenting):
Although I concur in the result, namely, that the case should be reversed and remanded, I cannot subscribe to the reasons advanced by the majority for so doing or the limited relief granted, i. e., “an accounting of the defendant’s profits.” From the facts as found by the trial court, I have no hesitation in concluding that defendant should be required to respond to such damages within the trial court’s discretion as may be justified by the proof. The trial court itself might well have reached this result had it not felt bound by decisions of this court which it interpreted as holding “that in such a situation [where the parties are not competitors] an accounting of profits may not be allowed * * * ” Accordingly, the court concluded (Concl. of Law 7), “Since the parties are not competitors, plaintiff is not entitled to an accounting of defendant’s profits.”
I find nothing in the statute, 15 U.S. C.A. § 1117 (§ 35, Lanham Act) which premises recovery upon the existence of a competitive situation. A plaintiff is specifically entitled “to recover (1) defendant’s profits” and is told that he need “prove defendant’s sales only,” leaving to the defendant to “prove all elements of cost or deduction claimed.” In addition, a plaintiff may recover “(2) any damages sustained by the plaintiff.” Thus, if a defendant were to prove slight profit or none, the plaintiff might gain a hollow victory. However, “damages sustained” might be established on some factual basis or theory other than “defendant’s profits.” For example, would it be too farfetched to hold defendant here to its statements to the public that its mattress pads were filled with “acri-lan” ? If equity would now do that which ought to have been done, plaintiff might have as damages its profit on “acrilan” sales to defendant in such quantities as would have been necessary to fill the pads with genuine “acrilan” and not floor sweepings and waste material or damages on the theory of unjust enrichment. Furthermore, the statute permits the court, if “the amount of the recovery based on profits is either inadequate or excessive,” in its discretion to “enter judgment for such sum as the court shall find to be just, according to the circumstances of the case.” Therefore, on remand the trial court should be free to enter a judgment upon such equitable basis as may be warranted by the proof.
*398In Admiral Corporation v. Price Vacuum Stores (E.D.Pa.1956), 141 F.Supp. 796, 801, the court commented that:
“It seems scarcely equitable, however, for an infringer to reap the benefits of a trademark he has stolen, force the registrant to the expense and delay of litigation, and then escape payment of damages on the theory that the registrant suffered no loss. To impose on the infringer nothing more serious than an injunction when he is caught is a tacit invitation to other infringement.”
In Blue Bell Co. v. Frontier Ref. Co., 213 F.2d 354, 363 (10th Cir. 1954), the court stated that “recovery is predicated upon the equitable principle of unjust enrichment, not the legal theory of provable damages.” That decision has since been cited approvingly by this court in Maternally Yours, Inc. v. Your Maternity Shop, 234 F.2d 538, 545 (2d Cir. 1956). See also 4 Callman, Unfair Competition and Trade-Marks 1860 & n. 74 (2d ed. 1950). Thus, the fact that plaintiff was not in direct competition with defendant or may not have lost sales directly to defendant is not so relevant to the propriety of an accounting of profits as they are to an award of damages. Compare Vandenburgh, Trademark Law and Procedure 386 & n. 17 (1959), with id. 385 & n. 11.
Plaintiff undoubtedly has been adversely affected by defendant’s unlawful infringement. Defendant, in turn, has made sales of mattress pads and at least to this extent has unjustly enriched itself. Equity requires that the barrier, if such it be, of the Rohrlich and Penco cases be surmounted. The law must keep pace with industrial and economic reality. Today products sold on a nationwide basis contain scores of component parts manufactured by others. In the textile and synthetic fiber field particularly, chemical and textile companies produce fibers under such trademarked names as “nylon,” “dacron,” “orlon,” “caprolan,” “creslan,” “kodel,” “lycra,” and many others, which are not sold to the purchasing public as such but are important and well-advertised ingredients of many household articles and articles of apparel.
Wherever equity is the basis for relief, each case must, of necessity, be decided on its own facts and damages measured accordingly. The unjust enrichment may be the defendant’s profits. The damages sustained by plaintiff may be gauged by the profit it would have made had “acri-lan” actually been used in the pads sold. No formula should be decreed which would lessen the trial court’s discretion as to how best to achieve a fair award. Our present task is to remove the barrier which the trial court felt existed and to try to set up certain directional arrows.
I find it unnecessary to overrule cases previously decided based upon facts differing from those here presented. Nor, in my opinion, is there any need to consider or discuss “product market- — geographical market” distinctions. No facts giving rise to these questions are before us in this case.
I, therefore, concur in reversal and remand, but dissent from the limitation of remand merely “for an accounting of defendant’s profits.”