Court Opinion

ID: 9001794
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:09:53.021317+00
Date Added: 2024-06-11T17:11:11.805282
License: Public Domain

KEARSE, Circuit Judge,
dissenting in part:
I respectfully dissent from so much of the majority decision as reverses the monetary award to plaintiff George Basch Co. (“Basch”) on account of the infringement by defendant Blue Coral, Inc. (“Blue Coral”), of the trade dress for Basch’s product, NEVR-DULL. The district court, though finding that damages were unavailable because there was no proof of actual consumer confusion, determined that an award to Basch of Blue Coral’s profits was appropriate because Blue Coral had been unjustly enriched by its infringement. The court had noted that if the question of profits was a matter to be decided by the court rather than the jury, the court would accept the jury’s findings as advisory. See Fed.R.Civ.P. 39(c). Whether the final judgment reflects findings and conclusions by the court or a refusal to set aside the jury’s verdict, I think the award of profits was a remedy permitted by law and was supported by the findings of a properly instructed jury.
The Lanham Act, 15 U.S.C. § 1051 et seq. (1988), provides, in pertinent part, that when the plaintiff has established a violation of § 1125(a), which prohibits, inter alia, trade practices that falsely indicate a product’s origin, the plaintiff is generally entitled, “subject to the principles of equity, to recover (1) defendant’s profits, [and] (2) any damages sustained by the plaintiff.” 15 U.S.C. § 1117(a). The term “profits” is not coextensive with the term “damages,” see, e.g., Monsanto Chemical Co. v. Perfect Fit Products Manufacturing Co., 349 F.2d 389 (2d Cir.1965) (affirming denial of damages, reversing denial of profits), cert. denied, 383 U.S. 942, 86 S.Ct. 1195, 1198, 16 L.Ed.2d 206 (1966), and even where the plaintiff has not proven any loss of its own sales, and hence has not proven damages, an award of profits may be justified as an equitable remedy where the defendant has been unjustly enriched by his infringement, see id. at 395; W.E. Bassett Co. v. Revlon, Inc., 435 F.2d 656, 664 (2d Cir.1970) (“An accounting should be granted if the defendant is unjustly en-riched_”).
In the present case, the evidence was that Blue Coral, having been the exclusive distributor of Basch’s NEVR-DULL in Canada, asked Basch to produce a Blue Coral version of the product that Blue Coral could distribute in the United States under its own trademark. When negotiations failed to achieve agreement, Blue Coral set out to copy Basch’s NEVR-DULL. *1544(See, e.g., Plaintiff's Exhibit 34, a Blue Coral document dated March 28, 1988, entitled “LABORATORY MEMORANDUM NO. 19 [ — ] DUPLICATION OF NEVR-DULL,” discussing “the feasibility of duplicating Nevr-Dull for manufacturing by Blue Coral.”)
The jury was instructed, inter alia, that it could not find infringement of the NEVR-DULL trade dress simply on the basis that Blue Coral had intentionally copied it. Rather, it was told that if it found that Blue Coral had intentionally copied the NEVR-DULL trade dress, it could find infringement only if it also found a likelihood of confusion, which it might infer if it found “there was an intent to benefit from Basch’s protectable right in its NEVR-DULL trade dress.” The court also told the jury that the amount of monetary damages it could award for trade-dress infringement was “limited to what you find the defendant Blue Coral made as a result of the violation of Nevr-Dull trade dress.” The court explained that the jury could properly award to Basch only the amount Blue Coral made that it would not be fair or equitable for Blue Coral to retain.
Having been thus instructed, the jury was asked the following questions and gave the following answers:
“Was Basch’s trade dress for its NEVR-DULL product inherently distinctive? Yes.”
“Did the trade dress for Basch’s NEVR-DULL product acquire secondary meaning? Yes.”
“Did defendants intend to imitate Basch’s NEVR-DULL trade dress? Yes.”
“Did defendants’ use of its trade dress in marketing EVER BRITE create a likelihood of confusion among a substantial number of members of the consuming public as to the source of EVER BRITE, i.e., as to whether EVER BRITE was manufactured by the maker of NEVR-DULL? Yes.”
“Did the violation of Basch’s right(s) proximately cause damage to Basch? Yes.”
The jury found that the “[pjrofits earned by Blue Coral due to trade dress infringement” totaled “$200,000.”
These findings of Blue Coral’s intentional copying of a distinctive trade dress that had acquired secondary meaning, thereby creating a likelihood of consumer confusion, in order to benefit from the breach of Basch’s rights, and culminating in the unfair receipt by Blue Coral of $200,000 in profits due to the infringement, suffice, in my view, to support the conclusion that Blue Coral was unjustly enriched. I would affirm the district court’s judgment that an award of profits was justified.