DAVID BRAMLETTE, District Judge.
This cause came before the Court on a hearing on damages on July 10, 2017. Counsel and witnesses for the plaintiff Ronaldo Designer Jewelry, Inc. ("Ronaldo") appeared. The pro se defendant, Phillip Prinzo ("Prinzo") did not appear despite having been advised of the hearing on several occasions. The Court now therefore makes the following findings of fact and conclusions of law, based on the evidence submitted at the hearing:
Defendant Ronaldo filed its Verified Complaint in this case alleging that Prinzo willfully infringed Ronaldo's copyrights in its "Gold Craft Associates Dealer Handbook," "Gold Craft Fashions," and "Gold Craft Associates Fall Catalog 2000" catalogs and "The Power of Prayer Bracelet," "Stackable Bracelet," "THE LOVE KNOT," "The Tranquility Bracelet," "The Angelina Bracelet," "The Spring Time Bracelet," "I Love You," "TRC-S297 Birthstone Bracelet," "Forever Fellowship Bracelet," and the "Pearl of My Heart" jewelry designs (collectively, the "Works" or "Ronaldo's Works"); willfully infringed Ronaldo's "THE POWER OF PRAYER" BRACELET® trademark; willfully infringed Ronaldo's "Kissing Roof" clasp design trade dress; and otherwise engaged in unfair competition and false advertising by representing to customers that he was authorized to make and sell Ronaldo's copyrighted jewelry designs and jewelry incorporating Ronaldo's proprietary trade dress. Copies of Ronaldo's copyrighted catalogs and photographic representations of its jewelry designs were incorporated as Exhibits B, C, D, E, I, K, N, Q, T, W, Z, BB and DD to the Verified Complaint [DE 2-1, 2-2, 2-3, 2-4, 2-5, 2-6, 2-7, 2-8, 2-9, 2-10, 2-16, 2-18, 2-21, 2-24, 2-27, 2-30, 2-33, 2-35, 2-37]. Photographic representations of Prinzo's allegedly infringing jewelry were incorporated as Exhibits F, J, L, O, R, U, X, AA, CC, and EE to the Verified Complaint [DE 2-11, 2-17, 2-19, 2-22, 2-25, 2-28, 2-31, 2-34, 2-36, 2-38]. Prinzo was properly served and submitted a letter addressed to the Court [DE 27], which, by Order of the Court [DE 53] was deemed as Prinzo's Answer to the Verified Complaint.
On October 21, 2016, Ronaldo filed its Motion for Discovery Sanctions [DE 83] and Motion to Hold Defendant in Contempt [DE 85], as well as corresponding Memoranda in support [DE 84 and 86]. On December 20, 2016, the Court granted in part and denied in part Ronaldo's Motion for Discovery Sanctions [DE 83] and Motion to Hold Defendant in Contempt [DE 85], and entered an Order [DE 93] ordering Prinzo to comply with various Court Orders and produce certain discovery within ten (10) days or a default judgment would be entered against him. Prinzo failed to comply with the Court's Order and, on February 3, 2017, the clerk entered default against Prinzo [DE 98]. On November 30, 2016, Ronaldo filed its Motion for Summary Judgment [DE 91] and Memorandum in Support [DE 92]. Ronaldo filed its Motion for Default Judgment [DE 99] on February 10, 2017. On May 10, 2017, the Court entered its Order [DE 104] granting Ronaldo's Motion for Default Judgment [DE 99] and Motion for Summary Judgment [DE 91] and, thus, found Prinzo liable for willful copyright infringement, willful trademark infringement, willful trade dress infringement, unfair competition, and false advertising.
On July 10, 2017, the Court heard arguments and testimony relating to damages. The Court took judicial notice of the evidence submitted with Ronaldo's Motion for Summary Judgment [DE 91] and the Memorandum of Support [DE 92]. Ronaldo also presented the testimony of Ronaldo's Executive Vice President, Michael Scheser, and its expert W. Whitaker Rayner, who testified as to the reasonableness of Ronaldo's attorney fees and costs.
For its claim for willful copyright infringement, Ronaldo elected statutory damages and sought damages in the amount of $30,000 per eligible infringement. The Court finds that, of the thirteen (13) copyrighted works infringed by Prinzo, four (4) were registered within three (3) months of first publication or prior to Prinzo's infringement and, thus, are eligible for statutory damages. Ronaldo's "Gold Craft Associates Dealer Handbook" jewelry design and catalog (Cert. of Reg. VA 1-140-610/Suppl. Reg. VA 1-170-689) was registered effective as of November 13, 2001.
Ronaldo argued that enhanced statutory damages should be awarded as a result of Prinzo's willful copyright infringement. The Court found Prinzo's infringement was willful when summary judgment on liability was granted. The Court based this finding on Prinzo's knowledge of and past relationship with Ronaldo's predecessor-in-interest entity (
For its claims of willful trademark infringement, willful trade dress infringement, unfair competition, and false advertising under the Lanham Act, Ronaldo requested actual damages trebled. The Court finds that Prinzo sold various bracelets totaling at least $27,696.75.
Ronaldo argued that, had Prinzo participated in good faith in the discovery process, Ronaldo would be able to identify more infringing sales. Ronaldo argued that damages should be trebled due to Prinzo's intentional conduct and obstruction of the discovery process. The Court found Prinzo's infringement was intentional when summary judgment on liability was granted [DE 104]. The Court based this finding on Prinzo's knowledge of and past relationship with Ronaldo's predecessor-in-interest entity; Prinzo's deemed admission of intentional copying (
Ronaldo argued that it is entitled to recovery of its reasonable attorney fees and costs under both the Copyright Act and Lanham Act. In its summary judgment motion, Ronaldo presented testimony as to the amount and payment of attorney fees and costs leading up to and submitted with Ronaldo's Motion for Summary Judgment. Ronaldo also presented the testimony of W. Whitaker Rayner, a local attorney with a long-standing reputation and significant experience in the area of intellectual property. Mr. Rayner testified that, in his expert opinion, the attorney fees and costs submitted by Ronaldo were reasonable in light of the work required in this matter.
The Court finds that Ronaldo's lead counsel, Kyle Anne Citrynell, a partner with the law firm of Seiller Waterman LLC, has been practicing law for 36 years in the area of intellectual property, including but not limited to copyright litigation. Over the three years of this litigation, Ms. Citrynell billed 165.85 hours at rates from $325 to $340 per hour for a total legal fee associated with her work of $56,177.00.
The Court finds that C. Shawn Fox, a non-equity partner with the law firm of Seiller Waterman LLC, has been practicing law for 16 years in the area of intellectual property, including but not limited to copyright litigation. Over the three years of this litigation, Mr. Fox billed 186.70 hours at rates from $260 to $285 per hour for a total legal fee associated with his work of $52,908.00.
The Court finds that Christopher A. Bates, a non-equity partner with the law firm of Seiller Waterman LLC, has been practicing law for more than 18 years in the area of intellectual property, including but not limited to copyright litigation. Over the three years of this litigation, Mr. Bates billed 11.65 hours at rates from $280 to $285 per hour for a total legal fee associated with his work of $3,274.50.
The Court finds that Keith J. Larson, an associate with the law firm of Seiller Waterman LLC, billed 165.85 hours at a rate of $250 per hour for a total legal fee associated with his work of $2,862.50.
The Court finds that Morgan K. Mottley, formerly a law clerk and now an associate with the law firm of Seiller Waterman LLC billed 4.7 hours at rates of $125 per hour as a law clerk and $225 per hour as an attorney for a total legal fee associated with her work of $587.50.
The Court finds that Laura A. Bevarly, a paralegal with the law firm of Seiller Waterman LLC, billed 17.75 hours at rates from $95 to $110 per hour for a total legal fee associated with her work of $1,710.25.
The Court finds that Karen K. McWhorter, a paralegal with the law firm of Seiller Waterman LLC, billed 14.0 hours at a rate of $100 per hour for a total legal fee associated with her work of $1,400.00.
The Court finds that Colleen M. Hawk, a paralegal with the law firm of Seiller Waterman LLC, billed 12.10 hours at a rate of $125 per hour for a total legal fee associated with her work of $1,512.50.
The Court finds that Seiller Waterman LLC billed $925 for other law clerk time in this case.
The Court finds that Ronaldo's local counsel, Alec M. Taylor, a partner with the law firm of Krebs Farley PLLC, has been practicing law for almost 9 years in the area of litigation, including but not limited to copyright litigation. Over the three years of this litigation, Mr. Taylor billed 102.4 hours at a current rate of $250 per hour for a total legal fee associated with his work of $24,530.50.
The Court finds that Ronaldo also incurred taxable costs of $110 for service of process fees and incurred $6,560.17 in delivery fees, outside copies, deposition fees, and other document fees billed by Seiller Waterman LLC. Ronaldo incurred $1,887.45 in taxable costs for service of process fees, delivery fees, outside copies, deposition fees, and other document fees billed by Krebs Farley PLLC and $1,109.03 in travel and other non-taxable costs.
The Courts finds that Ronaldo incurred attorney fees and costs totaling $155,554.40. Ronaldo's expert, Mr. Rayner, testified that the hourly rates charged by Ronaldo's attorneys and their staffs were reasonable in light of their experience and the specialized nature of intellectual property litigation, and that the delegation of duties between partners, associates, paralegals and law clerks, and the time expended by each was reasonable in light of the tasks required in this matter. Mr. Rayner concluded that, while he believed an entry or two totaling a few hundred dollars may have been unreasonable or unnecessary, the total fees and costs were reasonable, particularly in light of the fact that Ronaldo has not sought recovery of more than $15,000 in fees and costs it incurred after submitting the above attorney fees and costs. Mr. Rayner also testified that attorney fees and costs of approximately $50,000 per year for a case in litigation pending three years is reasonable and typical. The Court agrees with the testimony of Mr. Rayner and finds that the attorney fees and costs requested are reasonable.
The Court also finds that Ronaldo is the prevailing party, having succeeded on both a Motion for Default Judgment and a Motion for Summary Judgment. The Court further finds that Prinzo's positions and defenses asserted in this matter were objectively unreasonable. Prinzo's asserted defense — that the Mutual Release Agreement signed by the parties upon his termination granted Prinzo the authority to copy Ronaldo's catalogs, jewelry designs, and trade dress — lacked any merit whatsoever, which Prinzo admitted (
On September 19, 2016, the Court granted a Preliminary Injunction [DE 79] enjoining Prinzo from copying, manufacturing, reproducing, importing, publishing, displaying, distributing, transmitting, selling, or otherwise placing on the market the infringing jewelry, marketing, and advertising. Ronaldo seeks to have the Preliminary Injunction converted to a Permanent Injunction. This Court finds that the same reasons justifying a preliminary injunction remain present and that converting the Preliminary Injunction to a Permanent Injunction is warranted.
In its Order dated May 10, 2017 [DE 104], the Court ordered Prinzo to appear at the damages hearing held on July 10, 2017 and produce the records identified in Exhibit A to the Amended Notice to Take Deposition [DE 46-1] or be held in contempt of court until such time as he purges himself of contempt. Prinzo failed to appear or produce the required records.
Prinzo has continuously and frequently failed to obey the Court's orders in this matter. The Court set forth Prinzo's multiple failures in its Order [DE 93] adopting the Report and Recommendation of Magistrate Parker and ordering Prinzo to comply with prior Court Orders [DE 71 and 74] or face entry of default judgment. In its Order [DE 93], the Court found that "Prinzo has therefore demonstrated that less drastic sanctions [orders to comply, monetary sanctions] would not achieve a deterrent effect." Even the threat of entry of default judgment was insufficient to induce Prinzo to comply and he, once again, failed to comply with the Court's Order. [DE 104] The Court finds that further monetary or less drastic sanctions would have no deterrent effect and would be to no avail.
Ronaldo seeks recovery of statutory damages under the Copyright Act, actual damages under the Lanham Act, attorney fees and costs under both the Copyright Act and Lanham Act, and a permanent injunction under both the Copyright Act and Lanham Act. It is not considered dual recovery to seek statutory copyright damages and actual damages under the Lanham Act.
For its claims of copyright infringement, Ronaldo elected statutory damages under 17 U.S.C. §504(c) and seeks recovery of $120,000 ($30,000 each for four qualifying infringements). A copyright holder is entitled to statutory damages for works registered prior to infringement or registered within three months of first publication.
Statutory Damages may be awarded
Willfulness may also be inferred from Prinzo's failure to continue to defend the lawsuit.
The Court finds enhanced damages of up to $150,000 per eligible infringement are justified due to Prinzo's willfulness. Because Ronaldo has not requested more, the Court will award damages at the high end of non-willful infringement of $30,000 per infringement for a total of $120,000.
With regard to its claims for trademark and trade dress infringement, unfair competition, and false advertising under the Lanham Act, Ronaldo seeks recovery of Prinzo's profits of $6,809 trebled for a total of $20,427. For infringements of unregistered trademarks and trade dress, as well as for unfair competition or false advertising, the Court has discretion to award damages not exceeding three times the amount of actual damages (which, in this case, consist of Prinzo's profits).
Regardless of whether treble damages are mandatory, the Court finds that Prinzo's conduct was willful and intentional, and justifies recovery of treble damages.
In this case, Ronaldo states that it is only aware of Prinzo sales totaling $27,696.75 [DE 92-13]. Given the limited descriptions and cryptic nature of Prinzo's invoices, Ronaldo states that it can only specifically attribute $6,809 of such sales to Prinzo's infringing works. All of Prinzo's remaining sales may well be attributable to Prinzo's infringing works, but Ronaldo states that at this time, it simply cannot identify the works to which the remaining sales are attributable. Pursuant to 15 U.S.C. §1117, in calculating Prinzo's profits, Ronaldo must only prove Prinzo's sales. Prinzo must submit evidence demonstrating his reasonable costs and deductions. Prinzo has submitted no such costs or deductions. Accordingly, the Court shall grant damages in the amount of $20,427.00 ($6,809.00 x 3).
Ronaldo seeks recovery of its reasonable attorney fees pursuant to 17 U.S.C. §505 and 15 U.S.C. §1117. Section 505 allows recovery of attorney fees to a prevailing party in a copyright infringement action. The Court is allowed discretion as to whether to award fees, giving substantial weight to the objective reasonableness of the losing party's position, although other factors (such as a party's litigation misconduct) may also justify an award of fees.
In copyright cases, "[a]lthough attorney's fees are awarded in the trial court's discretion, they are the rule rather than the exception and should be awarded routinely."
As stated above, Prinzo's position that the Mutual Release Agreement granted him authority to copy was entirely unreasonable (as he ultimately admitted), and his litigation conduct was designed to obstruct the litigation process and caused Ronaldo to incur excessive fees. Either circumstance justifies an award of fees under 17 U.S.C. §505.
In cases of trademark and trade dress infringement, unfair competition, and false advertising, all of which are governed by the Lanham Act, 15 U.S.C. §1117 allows for recovery of attorney fees. For infringements of unregistered trademarks and trade dress, recovery of attorney fees is limited to exceptional cases.
Ronaldo also requests recovery of its costs incurred in this action, including both taxable and non-taxable costs. Ronaldo's taxable costs are recoverable pursuant to 28 U.S.C. §1920. The non-taxable costs requested by Ronaldo are recoverable under the Copyright Act.
Ronaldo submitted attorney fees and costs totaling $155,554.40. In evaluating what is a reasonable fee, courts consider a variety of factors. In
Attorney rates are generally, but not always, evaluated in comparison to the prevailing rates in the district in which the court sits. Sometimes, legal markets may be defined by practice area, in which case the court may adjust the base hourly rate to account for a plaintiff's reasonable decision to retain out-of-district counsel.
In
As noted above, W. Whitaker Rayner testified that the hourly rates charged by Ronaldo's attorneys and their staffs were reasonable in light of their experience and the specialized nature of intellectual property litigation and the delegation of duties between partners, associates, paralegals, and law clerks, and the time expended by each was reasonable in light of the tasks required in this matter. The Court agrees and finds that such attorney fees and costs are reasonable. Accordingly, the Court grants an award of $155,554.40 for attorney fees and costs pursuant to 17 U.S.C. § 505 and 15 U.S.C. § 1117.
On September 19, 2016, the Court granted a Preliminary Injunction [DE 79] enjoining Prinzo from copying, manufacturing, reproducing, importing, publishing, displaying, distributing, transmitting, selling, or otherwise placing on the market the infringing jewelry, marketing, and advertising. Ronaldo seeks to have the Preliminary Injunction converted to a Permanent Injunction. The Court finds that the same reasons justifying a preliminary injunction remain present, and that converting the Preliminary Injunction to a Permanent Injunction is warranted. In its Order [DE 104] granting Ronaldo's Motion for Default Judgment [DE 99] and Motion for Summary Judgment [DE 91], the Court found Prinzo liable for violations of the Copyright Act and Lanham Act, both of which justify injunctive relief in this matter.
The Court has broad discretion to exercise its various sanctioning powers.
As stated above, Prinzo has continuously and frequently failed to obey court orders in this case. In its Order dated May 10, 2017 [DE 104], the Court ordered Prinzo to appear at the damages hearing held on July 10, 2017 and produce the records identified in Exhibit A to the Amended Notice to Take Deposition [DE 46-1] or be held in contempt of court until such time as he purges himself of contempt. Prinzo failed to appear or produce the required records. Accordingly, this Court finds Prinzo in civil contempt of court until such time as he purges himself of contempt by producing the records identified in Exhibit A to the Amended Notice to Take Deposition [DE 46-1]. Prinzo may purge himself of contempt by producing said records within twenty (20) days from the date of entry of this Order.
The defendant is further warned not to destroy the records he has been ordered to produce. To do so could result in a finding of criminal contempt and/or additional sanctions.
IN CONCLUSION, THE COURT ORDERS AS FOLLOWS:
IT IS HEREBY ORDERED that the plaintiff, Ronaldo Designer Jewelry, Inc., is awarded $30,000.00 in damages per infringement, for each of the four works registered prior to infringement or within three months of first publication, for a total award of $120,000.00 pursuant to 17 U.S.C. §504(c) for the defendant's willful copyright infringement;
FURTHER ORDERED that the plaintiff, Ronaldo Designer Jewelry, Inc., is awarded recovery of Prinzo's actual profits of $6,809 trebled for a total of $20,427 pursuant to 15 U.S.C. §1117 for willful trademark and trade dress infringement, unfair competition, and false advertising;
FURTHER ORDERED that the plaintiff is awarded $155,554.40 for attorney fees and costs pursuant to 17 U.S.C. §505 and 15 U.S.C. §1117;
FURTHER ORDERED that the Preliminary Injunction [DE 79] entered in this matter shall be converted to a Permanent Injunction pursuant to 17 U.S.C. §502 and 15 U.S.C. §1116;
FURTHER ORDERED that the defendant, Phillip Prinzo, be held in civil contempt of court until such time as he purges himself of contempt by producing the records identified in Exhibit A to the Amended Notice to Take Deposition [DE 46-1]. Until the defendant purges himself of civil contempt, the Court reserves jurisdiction to impose additional sanctions and/or a finding of criminal contempt if warranted;
FURTHER ORDERED that counsel for plaintiff shall submit a proposed Final Judgment in accordance with the above Findings of Fact and Conclusions of Law to the undersigned District Judge via electronic mail within seven (7) days from date of entry of this Order, and shall also provide a copy to the pro se defendant. Any objections to the form of the proposed Final Judgment must be made within seven (7) days from the date of delivery of the proposed judgment to the defendant;
FURTHER ORDERED that counsel for plaintiff shall also submit a proposed separate Permanent Injunction in accordance with the above Findings of Fact and Conclusions of Law to the undersigned District Judge via electronic mail within seven (7) days from date of entry of this Order, and shall also provide a copy to the
SO ORDERED.