KEITH P. ELLISON, District Judge.
Pending before the Court are the following motions:
Upon considering the Motions, all responses thereto, the applicable law, and oral arguments, the Court finds that:
This case involves claims of trade dress and trademark infringement. Clearline contends that Cooper's DURA-BLOK™ rooftop support products infringe on its C-PORT® products. At trial, Clearline argued that Cooper infringed on two aspects of its trade dress: a yellow reflective stripe and a yellow and black color scheme. It also argued the Cooper infringed on Clearline's C-PORT® trademark by using it in the meta-tags on Cooper's website and in a tradeshow catalog.
The jury returned a split verdict. (Doc. No. 151.) With regard to Clearline's trade dress claims, the jury found that the use of reflective yellow striping was not non-functional, and did not create a likelihood of confusion as to the source, affiliation, or sponsorship of Cooper's product, two independent reasons for finding no trade dress infringement as to the yellow reflective stripe. (Id. at 2, 4.) As to the yellow and black color scheme, the jury determined that the color scheme was non-functional, had acquired a secondary meaning, and created a likelihood of confusion as to the source, affiliation, or sponsorship of Cooper's product. (Id. at 2-4.) These conclusions constitute a finding of trade dress infringement as to use of the yellow and black color scheme. Furthermore, the jury concluded that Cooper's actions relating to its trade dress infringement were done willfully. (Id. at 5.) It awarded Clearline $2,660,000 in lost profits, and $3,200,000 in profit disgorgement damages for Cooper's trade dress infringement. (Id. at 6-7.)
As to Clearline's trademark infringement claims, the jury found that Cooper's use of the C-PORT® trademark in meta-tags on its website did not create a likelihood of confusion as to the source, affiliation, or sponsorship of Cooper's product. (Id. at 8.) It found that Cooper's use of the C-PORT® trademark in a tradeshow catalog, however, did create a likelihood of confusion as to the source, affiliation, or sponsorship of Cooper's product, a finding that was sufficient to find trademark infringement, as none of the other elements of a trademark infringement claim were contested. (Id.) Nonetheless, the jury concluded that this trademark infringement did not entitle Clearline to any amount of lost profits or profit disgorgement. (Id. at 10-11.)
Both parties have now filed numerous post-trial motions. The Court will first turn to Clearline's Motion for Pleading Amendment. It will then address the motions for JMOL filed by both sides. Finally, the Court will address the motions regarding remedies, starting with damages.
Rule 15(b) provides in relevant part:
Fed.R.Civ.P. 15(b). "The purpose of the rule is to allow the course of the trial, rather than the formal pleadings, to control the outcome." Flannery v. Carroll, 676 F.2d 126, 131 (5th Cir.1982). However, "it is not often that amendments are allowed after the close of evidence, since the opposing party may be deprived of a fair opportunity to defend and to offer any additional evidence." Triad Elec. & Controls, Inc. v. Power Sys. Eng'g, Inc., 117 F.3d 180, 193-94 (5th Cir.1997) (citing T.J. Stevenson & Co., Inc. v. 81,193 Bags of
"[T]rial by implied consent turns on: whether the parties recognized that the unpleaded issue entered the case at trial, whether the evidence that supports the unpleaded issue was introduced at trial without objection, and whether a finding of trial by consent prejudiced the opposing party's opportunity to respond." Portis v. First Nat'l Bank of New Albany, 34 F.3d 325, 332 (5th Cir.1994) (citing United States v. Shanbaum, 10 F.3d 305, 312-13 (5th Cir.1994)). A party does not consent to try "a new issue by introducing evidence or failing to object to evidence when the evidence is relevant to pleaded issues in the case." Moody v. FMC Corp., 995 F.2d 63, 66 (5th Cir.1993) (citing Jimenez, 652 F.2d at 422; Int'l Harvester Credit Corp. v. E. Coast Truck, 547 F.2d 888, 890 (5th Cir.1977)).
Clearline seeks leave to amend its complaint to add a claim that Cooper used its C-PORT® trademark in its internet website code. (Doc. No. 159-1 at 2.) Plaintiff's live complaint alleges only that Cooper used Clearline's trademark in its meta-tags, a specific type of code. (Doc. No. 67 at 39.) Prior to trial, the parties filed a joint pre-trial order indicating that the parties disagreed as to the level of specificity with which the trademark infringement question ought to be posed to the jury. (Compare Doc. No. 128-8 at 27 with Doc. No. 128-9 at 15.) Clearline requested a broad question on the verdict form, asking whether Clearline had proven by a preponderance of the evidence that Cooper infringed on Clearline's trademark. (Doc. No. 128-8 at 27.) Cooper requested more granular questions on the verdict form. With regard to the allegations of trademark infringement on Cooper's website, Cooper requested the jury be asked specifically whether Cooper's use of Clearline's trademark in its meta-tags was infringing. (Doc. No. 128-9 at 15.)
At trial, the jury heard evidence that Cooper used the C-PORT® trademark in its alt-tags, a code distinct from meta-tags. (Trial Tr. 181:18-184:24; 804:18-22; 921:7-13, 921:22-922:8, 926:25-927:3, 934:6-936:9; 957:14-21; 1097:16-1099:22.) Some of this evidence was presented by Cooper to rebut Clearline's allegations that the C-PORT® mark was used in Cooper's meta-tags, by showing that, to the extent the mark was present in Cooper's code, it was in the alt-tags and not the meta-tags. (See, e.g., 1097:16-1099:22.) During deliberations, the jury specifically asked whether meta-tags and alt-tags are interchangeable. (See Doc. No. 167-1 at 5.) After hearing argument from the parties, the Court instructed the jury that "[m]eta-tags and alt-tags refer to different types of code used on web pages." (Id.) The jury subsequently answered "no" to Question 7, Part A, which asked, "Did Cooper B-Line's use of the C-PORT trademark in its meta-tags
On this set of facts, the Court concludes that Clearline's Motion for Pleading Amendment must be denied. During the period leading up to trial, and during trial, Cooper clearly opposed Clearline's attempts to broaden its trademark infringement claim beyond the scope of the live pleadings. See Portis, 34 F.3d at 332. This is evident from Cooper's insistence on a jury charge and verdict question limiting the inquiry to meta-tags. (Doc. No. 128-9 at 15; Doc. No. 142.) Furthermore, Cooper relied on evidence that Clearline's mark was in alt-tags, not meta-tags, to defend itself against Clearline's claim. (See, e.g., 1097:16-1099:22.) There is no doubt that Cooper would be prejudiced by any grant of leave to amend at this stage. Cooper was never on notice that its use of the C-PORT® trademark in alt-tags had entered the case as a claim. See Moody, 995 F.2d at 66. Finally, allowing such an amendment after the trial would severely prejudice Cooper. Cooper almost certainly would not have employed the trial strategy it did had it been on notice that Clearline was alleging it had infringed on its mark in "internet website code" generally. Instead, it likely would have focused its efforts on showing that use of the C-PORT® trademark in its website code was not likely to cause confusion. If Clearline is allowed to amend now, Cooper will be denied the opportunity to present any evidence showing that use of the mark in its internet code generally, and in alt-tags specifically, was not likely to cause confusion. See Triad, 117 F.3d at 193-94.
The Fifth Circuit reviews a district court's ruling on a motion for judgment as a matter of law de novo. See Cambridge Toxicology Grp., Inc. v. Exnicios, 495 F.3d 169, 179 (5th Cir.2007). Judgment as a matter of law is appropriate "[i]f a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue." See Fed.R.Civ.P. 50(a)(1); Gomez v. St. Jude Med. Daig Div. Inc., 442 F.3d 919, 927 (5th Cir.2006). "The decision to grant a directed verdict ... is not a matter of discretion, but a conclusion of law based upon a finding that there is insufficient evidence to create a fact question for the jury." Omnitech Int'l v. Clorox Co., 11 F.3d 1316, 1323 (5th Cir.1994) (citations omitted) (internal quotation marks omitted). A legally sufficient evidentiary basis requires more than a mere scintilla of evidence. Hollywood Fantasy Corp. v. Gabor, 151 F.3d 203, 211 (5th Cir.1998).
The trial court is required to consider the entire record when considering a renewed judgment as a matter of law motion. Reeves v. Sanderson Plumbing Prod., Inc., 530 U.S. 133, 149-50, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). Therefore, a court "should consider all of the evidence — not just that evidence which supports the non-mover's case — but in the light and with all reasonable inferences most favorable to the party opposed to the motion." Goodner v. Hyundai Motor Co., Ltd., 650 F.3d 1034, 1040 (5th Cir.2011).
Cooper moves for judgment as a matter of law. It argues that: 1) the jury's conclusion that a yellow reflective stripe is functional mandates the conclusion that the yellow on black color scheme also be found functional because black is the color of recycled rubber, a functional material;
To prove infringement of a trade dress, a plaintiff must show (1) that the dress is protectable, and (2) that infringement has occurred. Sicilia Di R. Biebow & Co. v. Cox, 732 F.2d 417, 425 (5th Cir. 1984), abrogated on other grounds by Traf-Fix Devices, Inc. v. Mrktg. Displays, Inc., 532 U.S. 23, 121 S.Ct. 1255, 149 L.Ed.2d 164 (2001); Taco Cabana Int'l, Inc. v. Two Pesos, Inc., 932 F.2d 1113, 1117-18 (5th Cir.1991). "The plaintiff has the burden of proof on both of these issues." CICCorp., Inc. v. AIMTech Corp., 32 F.Supp.2d 425, 434 (S.D.Tex.1998). To be protectable under the first prong, the trade dress must be nonfunctional and either be inherently distinctive or have secondary meaning. Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 210, 120 S.Ct. 1339, 146 L.Ed.2d 182 (2000). The second prong, infringement, occurs where "the use creates a likelihood of confusion as to the `source, affiliation, or sponsorship'" of the alleged infringer's product. Pebble Beach Co. v. Tour 18 I Ltd. ("Pebble Beach II"), 155 F.3d 526, 543 (5th Cir.1998), abrogated on other grounds by TrafFix Devices, 532 U.S. 23, 121 S.Ct. 1255, 149 L.Ed.2d 164 (citing 15 U.S.C. § 1125(a)(1)(A)).
To prevail on a claim of trade dress infringement, a plaintiff must show that the allegedly infringing feature is not functional. Wal-Mart, 529 U.S. at 210, 120 S.Ct. 1339. In TrafFix, the Supreme Court held that the traditional test of functionality is whether the product feature "is essential to the use or purpose of the article or if it affects the cost or quality of an article." 532 U.S. at 32, 121 S.Ct. 1255 (citing Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 165, 115 S.Ct. 1300, 131 L.Ed.2d 248 (1995)) (internal quotation marks omitted). "Under this traditional definition, if a product feature is `the reason the device works,' then the feature is functional. The availability of alternative designs is irrelevant." Eppendorf-Netheler-Hinz GmbH v. Ritter GmbH, 289 F.3d 351, 355 (5th Cir.2002) (quoting TrafFix, 532 U.S. at 33-34, 121 S.Ct. 1255). The word "essential," as used in TrafFix, is a term of art; "[a] feature is essential to the use or purpose of a product if it serves any significant function other than to distinguish a firm's goods or identify their source." Poly-Am., L.P. v. Stego Indus., L.L.C., 3:08-CV-2224-G, 2011 WL 3206687, at *10 (N.D.Tex. July 27, 2011) (citing Qualitex, 514 U.S. at 165-66, 115 S.Ct. 1300) (internal quotation marks omitted). TrafFix also recognized a second test for functionality in aesthetic features: "a functional feature is one the `exclusive use of which would put competitors at a significant non-reputation-related disadvantage.'" TrafFix, 532 U.S. at 24, 121 S.Ct. 1255
The Fifth Circuit has recognized that, although functional features cannot be protected, an arbitrary combination of functional features, "the combination of which is not itself functional, properly enjoys protection." Taco Cabana, 932 F.2d at 1119. Other circuits, as well as district courts in this circuit, have similarly recognized that individual functional features of a design may still, as a combination, be deserving of trade dress protection. See Antioch Co. v. W. Trimming Corp., 347 F.3d 150, 157-58 (6th Cir.2003) (collecting cases from various circuits recognizing this principle); Kodiak Prods. Co. v. Tie Down, Inc., No. 4:03-CV-1474-Y, 2004 WL 2599353, at *4 n. 2 (N.D.Tex. Nov. 12, 2004); Chemlawn Servs. Corp. v. GNC Pumps, Inc., 690 F.Supp. 1560, 1571 (S.D.Tex.1988) ("The parts of the Chemlawn Gun were obviously designed to perform their particular functions; however, the specific exterior configuration was arbitrarily selected. It was not necessary to copy the configuration of each of the parts of the Chemlawn gun in order to effectuate those functions."); but see Berg v. Symons, 393 F.Supp.2d 525, 555 (S.D.Tex.2005) ("Although `[a] unique combination of elements may make a dress distinctive, [ ] the fact that a trade dress is composed entirely of commonly used or functional elements might suggest that the dress should be regarded as unprotectible [sic] or `generic,' to avoid tying up a product or marketing idea.'" (quoting Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 118 (2d Cir.2001))).
Based on the foregoing, Cooper's argument that two functional features cannot, in combination, be nonfunctional, is contrary to established precedent.
Cooper contends that there was no evidence that the reflective yellow striping and black surface color were arranged arbitrarily. (Doc. No. 161 at 5.)
The Court is not convinced otherwise by the authority Cooper cites. In Eppendorf, the Fifth Circuit specifically noted that the color scheme had a functional purpose: enabling users to clearly see and measure liquid in a syringe. Eppendorf, 289 F.3d at 358. The Court certainly does not quibble with the argument that two colors may combine to serve a joint functional purpose, as they did in Eppendorf. But Eppendorf cannot be read as overruling clear language in Taco Cabana that an arbitrary combination of functional features, "the combination of which is not itself functional,
Cooper also argues that it is entitled to judgment as a matter of law on the question of functionality because the yellow and black color scheme satisfies the secondary definition of functionality, competitive necessity. Under the competitive necessity test, unlike under the traditional test, alternative designs are relevant. See Eppendorf, 289 F.3d at 356, 358 (recognizing that the competitive necessity test discussed in TrafFix is "virtually identical" to the utilitarian test of functionality used in the Fifth Circuit prior to TrafFix, and noting that alternative designs, though not relevant to the traditional test, are relevant to the utilitarian test); Kodiak, 2004 WL 2599353, at *3 ("Only under [the competitive necessity] standard should a court review the possibility of alternative designs."). Here, the jury was presented with ample evidence that alternative designs exist and compete in the field of rooftop support products. (See, e.g., Trial Tr. 141:19-146:16.) The jury could have concluded, on the basis of this evidence, that exclusive use of the particular yellow and black color scheme at issue would not put rooftop support block competitors at a significant non-reputation-related disadvantage.
To determine whether a trade dress has "secondary meaning," courts inquire into "the public's mental association between the mark and the alleged mark holder" to determine whether "in the minds of the public, the primary significance of a mark is to identify the source of the product rather than the product itself." Bd. of Supervisors for La. State Univ. Agric. and Mech. Coll. v. Smack Apparel Co., 550 F.3d 465, 476 (5th Cir.2008) (citing Wal-Mart, 529 U.S. at 211, 120 S.Ct. 1339). "[T]he showing required is that consumers associate the trade dress with a single source, even if the name of that source is unknown," at the time the alleged infringement began. 1 McCarthy on Trademarks and Unfair Competition § 8:8 (citation and internal quotation marks omitted); see also Pebble Beach Co. v. Tour 18 I Ltd. ("Pebble Beach I"), 942 F.Supp. 1513, 1559 (S.D.Tex.1996), aff'd as
Pebble Beach II, 155 F.3d at 543. These factors in combination may show that consumers consider a mark to be an indicator of source even if each factor alone would not prove secondary meaning. Smack Apparel, 550 F.3d at 476 (citing Pebble Beach II, 155 F.3d at 541). Whether a mark has acquired secondary meaning is a question of fact. Amazing Spaces, 608 F.3d at 234.
There is ample support for the jury's finding. Clearline presented evidence that it emphasized its color scheme at trade shows. (See Trial Tr. 147:20-149:8.) Clearline also presented evidence of sales volume and industry recognition as early as 2003. (See, e.g., Trial Tr. 148:11-149:8, 161:13-19.) The jury could have extrapolated that sales were made at least in part because of Clearline's color scheme branding at popular trade show booths. (See Trial Tr. 147:20-149:19.) Cf. Amazing Spaces, 608 F.3d at 249 (noting that volume of sales was not probative because plaintiff attempted to attract customers using other marks). Plaintiff also put forward evidence of substantial spending on advertising which clearly depicted the yellow and black color scheme. (See Trial Tr. 150:2-10; Pl.'s Exs. 198, 200.) While Cooper presents some case law from other circuits suggesting that advertising is only relevant to the extent it "encourages consumers to look for particular features as indicative of origin," see Yankee Candle Co. v. Bridgewater Candle Co., 259 F.3d 25, 44-45 (1st Cir.2001), there is no such cabined reading of the advertising factor in the Fifth Circuit. Plaintiff also presented evidence of Cooper's customers directly contacting Clearline, without instructions from Cooper to do so. (See, e.g., Pl.'s Exs. 59, 60; Peeler Dep. 182:10-17, 183:18-186:4, 192:5-193:17.) This evidence does not directly prove that customers contacted Clearline because of the black and yellow color scheme on the products Cooper was selling; however, the Court does not believe it must. The jury was free to infer, in light of the totality of the evidence, that Cooper's customers contacted Clearline because they associated the black and yellow color scheme with Clearline. Finally, although survey evidence is admittedly the preferred evidence of secondary meaning, Amazing Spaces, 608 F.3d at 248, the jury was presented with more than a scintilla of evidence on the other factors from which it was entitled to conclude that Clearline's yellow and black color scheme had acquired secondary meaning.
Trade dress infringement occurs where "the use creates a likelihood of confusion as to the `source, affiliation, or sponsorship'" of the alleged infringer's product. Pebble Beach II, 155 F.3d at 543 (citing 15 U.S.C. § 1125(a)(1)(A)). "`Likelihood of confusion' means more than a mere possibility; the plaintiff must demonstrate a probability of confusion." Xtreme Lashes, LLC v. Xtended Beauty, Inc., 576 F.3d 221, 226 (5th Cir.2009). Courts "examine the following nonexhaustive `digits of confusion' in evaluating likelihood of
Cooper raises the same argument for infringement as it did for functionality: the jury's finding that Cooper's use of the reflective yellow stripe did not create a likelihood of confusion mandates the conclusion that Cooper's use of the black and yellow color scheme also could not have created a likelihood of confusion. However, just as the jury could have concluded that, although the yellow stripe was functional, the particular black and yellow color scheme was not, the jury also could have concluded that, while the yellow stripe on Cooper's product did not, alone, create a likelihood of confusion, the overall black and yellow color scheme used by Cooper did. There is no inconsistency in such a conclusion and a new trial is not warranted. Furthermore, the jury was presented with ample evidence as to the relevant factors to consider for infringement.
A defendant is liable for willful infringement if he acts "voluntarily and intentionally and with the specific intent to cause the likelihood of consumer confusion..., to cause mistake or to deceive." Quick Techs., Inc. v. Sage Grp. PLC, 313 F.3d 338, 349 n. 9 (5th Cir.2002) (citations and internal quotations omitted). "Intent to compete, however, is not tantamount to intent to confuse." Scott Fetzer Co. v. House of Vacuums Inc., 381 F.3d 477, 486 (5th Cir.2004).
Here, the jury was presented with evidence that Cooper selected the yellow reflective stripe and the black recycled rubber because of independent functional and aesthetic reasons. (See Trial Tr. 670:16-24, 845:5-846:17, 851:7-852:16, 896:15-897:3.) However, it was also presented with evidence that Cooper sent sample C-PORT® products to its manufacturer, sought to make a product that would "look similar" and "still have all of the same features" as the C-PORT®, and even tried, initially, to have the yellow stripe painted onto the recycled rubber, like Clearline. (Pl.'s Ex. 77; see also Pl.'s Ex. 21; Trial Tr. 498:1-506:25, 650:17-651:24, 653:18-655:8, 668:18-671:16, 727:23-728:10.) Weighing such competing evidence is the province of the jury. The jury could have determined that a preponderance of the evidence here supported a finding that Cooper's desire to create a product with such a similar look evinced intent to confuse, and not simply an intent to compete. Judgment as a matter of law is inappropriate.
Prevailing plaintiffs in trade dress infringement cases may recover under 15 U.S.C. § 1117(a), which provides that a "plaintiff shall be entitled ... subject to the principles of equity ... to recover (1) defendant's profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.... Such sum ... shall constitute compensation and not a penalty." 15 U.S.C. § 1117(a). See also Taco Cabana, 932 F.2d at 1126. Although the Lanham Act "itself is no obstacle to a recovery of both plaintiff's damages and defendant's profits[,] ... damages and profits cannot be awarded simultaneously if it would result in over-compensation." 1 McCarthy
Here, the jury was properly instructed that it could not include in its award of Cooper's profits any amount already included in its calculation of Clearline's lost profits. Plaintiff's expert explained that his calculation method removed any duplicative damages, but took into account the extent to which Cooper was unjustly enriched by, for instance, purchasing materials from a cheaper supplier. (Trial Tr. 979:1-980:9.) Although Cooper put forward its own expert, who questioned the propriety of including both lost profits and profit disgorgement premised on the same sales (see Trial Tr. 1221:16-1223:5), the jury was entitled to credit the testimony of Plaintiff's expert. Cooper has not shown that the jury's award constitutes an impermissible double recovery for Clearline.
Proof of damages in a trademark and trade dress action is governed by the law of damages of tort actions. 1 McCarthy on Trademarks and Unfair Competition § 30:72; see also Broan Mfg. Co., Inc. v. Associated Distribs., Inc., 923 F.2d 1232, 1235 (6th Cir.1991). As a general rule, "damages are not permitted which are remote and speculative in nature." Broan, 923 F.2d at 1235 (citations omitted). "This rule serves to preclude recovery, however, only where the fact of damage is uncertain, i.e., where the damage claimed is not the certain result of the wrong, not where the amount of damage alone is uncertain." Id. (citations omitted) (emphasis in original). "Thus, although to set a damage figure arbitrarily or through pure guesswork is impermissible, [o]nce the existence of damages has been shown, all that an award of damages requires is substantial evidence in the record to permit a factfinder to draw reasonable inferences and make a fair and reasonable assessment of the amount of damages." Id. at 1236 (citations and internal quotation marks omitted).
Cooper argues that Clearline presented no evidence that Cooper would have continued its relationship with Clearline. It contrasts this case with Broan, where the plaintiffs were never advised that the relationship was under review, and both parties expected a long term relationship. See Broan, 923 F.2d at 1237-38. Here, in contrast, Cooper submitted evidence that it was dissatisfied with the relationship, particularly with Clearline's level of supply, and that Clearline was aware of Cooper's dissatisfaction. (Trial Tr. 245:7-253:22, 833:11-834:6, 843:1-14, 899:15-20.) However, Clearline also presented evidence that it was working to address the backlog, that some improvement had been made, and that Cooper recognized that product flow had improved. (Trial Tr. 443:18-447:4.) Broan itself acknowledges that "[s]ome uncertainty regarding what might have happened in the absence of the copying scheme is not fatal." Broan, 923 F.2d at 1237. The jury was entitled to conclude from the competing evidence that Clearline had established the fact that it suffered lost profits as a result of infringement to a reasonable degree of certainty. See id. ("Broan must establish the fact of damages with reasonable, not absolute, certainty.").
A plaintiff who proves infringement may be entitled to a defendant's profits, to the extent they are attributable to the defendant's unlawful use of plaintiff's trade dress or trademark. 15 U.S.C. § 1117(a); see also Pebble Beach II, 155 F.3d at 554-55. An award of profits is not automatic, but discretionary. See Pebble Beach II, 155 F.3d at 554. The factors to be considered in determining whether to award defendant's profits
Quick Technologies, 313 F.3d at 349 (citations and internal quotation marks omitted).
"In assessing profits the plaintiff shall be required to prove defendant's sales only; defendant must prove all elements of cost or deduction claimed." 15 U.S.C. § 1117(a). Thus, the burden is on the infringer "to prove (1) which, if any, of those sales were not attributable to the wrongful act, and (2) deductible costs and expenses to arrive at net profits." 1 McCarthy on Trademarks and Unfair Competition § 30:66 (citation and internal quotation marks omitted). The principle was established decades ago by the Supreme Court, and it remains the law of the land. See Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S. 203, 206-07, 62 S.Ct. 1022, 86 L.Ed. 1381 (1942) ("The burden is the infringer's to prove that his infringement had no cash value in sales made by him. If he does not do so, the profits made on sales of goods bearing the infringing mark properly belong to the owner of the mark."); see also Venture Tape Corp. v. McGills Glass Warehouse, 540 F.3d 56, 64 (1st Cir.2008); Wynn Oil Co. v. Am. Way Serv. Corp., 943 F.2d 595, 606-07 (6th Cir.1991); Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505, 518 (9th Cir.1985).
Cooper argues that it is Clearline who must prove that that Cooper's profits are attributable to its infringement. In support of this argument, Cooper cites Burndy Corp. v. Teledyne Indus., Inc., 748 F.2d 767, 772 (2d Cir.1984), Badger Meter, Inc. v. Grinnell Corp., 13 F.3d 1145, 1157 (7th Cir.1994), Pebble Beach II, 155 F.3d at 554-55, and Quick Technologies, 313 F.3d at 350. Burndy does state that the burden is on the plaintiff to prove that a defendant's sales were attributable to its infringing use of plaintiff's trademark. Burndy, 748 F.2d at 772. However, this statement is contrary to the language of the Lanham Act, Supreme Court precedent, and the majority of circuit precedent. This Court declines to follow Burndy. Badger Meter, Pebble Beach II and Quick Technologies are all silent as to who bears the burden of proving whether a defendant's profits are attributable to infringement. None of these cases controverts the
Cooper's argument that the amount of its profits Clearline was awarded lacks any support in the record must also be rejected. This argument lacks merit for the same reason Cooper's argument as to the amount of Clearline's lost profits lacks merit. The jury was entitled to consider Clearline's expert's calculation of Cooper's profits, Cooper's evidence of other factors that contributed to its profits, the amount of profits already accounted for in its award of Clearline's lost profits, and any other relevant evidence put forward by the parties, and determine what amount of Cooper's profits was an appropriate award. See Pipitone v. Biomatrix, 288 F.3d 239, 250 (5th Cir.2002) (holding that jury was entitled to consider expert's testimony and the predicate facts, and determine for itself how much weight to accord the expert's opinion); Grenada Steel Indus., Inc. v. Ala. Oxygen Co., Inc., 695 F.2d 883, 889 (5th Cir.1983) (jury was entitled to credit or discredit one or more expert opinions).
To prevail on a claim of trademark infringement, a plaintiff must show that a defendant's use of plaintiff's trademark is "likely to cause confusion among consumers as to the source, affiliation, or sponsorship of [defendant's] products or services." Scott Fetzer Co., 381 F.3d at 483 (citations and internal quotation marks omitted). "A likelihood of confusion means that confusion is not just possible, but probable." Id. (citation and internal quotation marks omitted); Smack Apparel, 550 F.3d at 478. In determining whether a likelihood of confusion exists, the Fifth Circuit considers the following "`digits of confusion': (1) the type of trademark allegedly infringed; (2) the similarity between the two marks; (3) the similarity of the products or services; (4) the identity of the retail outlets and purchasers; (5) the identity of the advertising media used; (6) the defendant's intent; (7) any evidence of actual confusion; and (8) the degree of care exercised by potential purchasers." Nat'l Bus. Forms & Printing, Inc. v. Ford Motor Co., 671 F.3d 526, 532 (5th Cir.2012) (citations omitted). "No one factor is dispositive, and a finding of a likelihood of confusion does not even require a positive finding on a majority of these digits of confusion." Elvis Presley Enters., Inc. v. Capece, 141 F.3d 188, 194 (5th Cir.1998) (citations and internal quotation marks omitted).
Here, Cooper does not dispute that it used an identical mark in its tradeshow catalogue. For that reason alone, the jury's finding of a likelihood of confusion has sufficient support in the record. See 1 McCarthy on Trademarks and Unfair Competition § 23:20 (noting that cases where a defendant uses an identical mark are "open and shut"). Cooper's argument that tradeshow catalogues are not a wide-reaching mode of advertising is entirely inapposite. The identity of the advertising media used is relevant to the extent that defendant uses similar ads, in similar media, to target the same audience. See MNI Mgmt., Inc. v. Wine King, LLC, 542 F.Supp.2d 389, 416 (D.N.J.2008) (quoting Kos Pharms., Inc. v. Andrx Corp., 369 F.3d 700, 722 (3d Cir.2004)). Cooper has cited no case law standing for the proposition that use of limited advertising to reach only a particular audience (here, attendees of trade shows) warrants ruling, as a matter of law, that there is no likelihood of confusion.
Clearline seeks JMOL arguing that: 1) Clearline has shown that it is entitled to
Clearline argues that it is entitled to the full amount of damages requested because Cooper did not meet its burden to show that some of Cooper's profits were not attributable to infringement. Cooper reiterates the arguments it raised in support of its own JMOL as to the inadequacy of Plaintiff's damages evidence. It also points out that it presented evidence showing that its sales of the DURA-BLOK™ may have been attributable to various other factors aside from the infringing color scheme, including existing customer relationships, complementary products, increased production capacity, and other features of the DURA-BLOK™. (Trial Tr. 1212:11-1213:21.)
Cooper's arguments about the inadequacy of Clearline's damages evidence have already been addressed, and need not be rehashed. As explained supra Part II.B.3, the jury was entitled to weigh competing evidence regarding Clearline's lost profits, and Cooper, not Clearline, had the burden to show that not all of Cooper's profits were attributable to infringement. However, Clearline's Motion for JMOL on this point must also be denied. Just as the jury was entitled to credit the testimony of Plaintiff's expert as to damages, it was also entitled to credit the evidence Cooper put forth showing that some of Cooper's profits were the result of other factors and to discount Plaintiff's expert's conclusions that Clearline suffered damages as a result of trademark infringement. See Pipitone, 288 F.3d at 250; Grenada, 695 F.2d at 889.
Clearline also seeks judgment as a matter of law that Cooper infringed on Clearline's trademark by using its mark in Cooper's website code. As explained supra Part I, with regard to Cooper's use of Clearline's C-PORT® trademark in its website code, Clearline claimed only that Cooper infringed on its trademark by using the mark in meta-tags. Record evidence indicates that Cooper used the C-PORT® mark in its alt-tags only, and not in its meta-tags. See supra Part I.B. Because the evidence is legally sufficient to uphold the jury's verdict on the claim before it, and because, as explained supra Part I, Clearline is not entitled to amend its pleadings to put forth a different claim, judgment as a matter of law is inappropriate.
A district court has "considerable discretion in fashioning an appropriate remedy for infringement" under the Lanham Act. Taco Cabana, 932 F.2d at 1127. The statute provides that "[i]n assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. Such sum ... shall constitute compensation and not a penalty." 15 U.S.C. § 1117(a). "An enhancement of damages may be based on a finding of willful infringement, but cannot be punitive." Taco Cabana, 932 F.2d at 1127; see also Champion Cooler Corp. v. Dial Mfg., No. 3:09-CV-1498-D, 2010 WL 1644193, at *3 (April 22, 2010) (noting that "evidence of willfulness alone, without proof that damages are not completely compensatory, does not entitle a plaintiff to enhanced damages").
Enhancement is appropriate where the damages awarded fail to adequately
Clearline seeks enhanced damages, arguing that the jury's award does not reflect the full $12,866,718 in damages calculated by its expert. It also points to Neil Krovatz's testimony cataloguing the financial difficulties Clearline faced as a result of Cooper's infringement, and the effect those difficulties had on Clearline's ability to compete. (Trial Tr. 176:24-178:17.)
The Court does not find an award of enhanced damages warranted. First, as explained supra Part II.C.1, the record contains evidence that would justify the jury's decision to award less than the full amount of damages Clearline requested. The Court sees no reason to question the jury's weighing of competing expert calculations, and other evidence probative of the likelihood and extent of a continued relationship between Cooper and Clearline. Furthermore, this is not a case where damages calculations are imprecise because of stonewalling by Cooper. Taco Cabana, 932 F.2d at 1127; see also Neles-Jamesbury, Inc. v. Bill's Valves, 974 F.Supp. 979, 983 n. 8 (S.D.Tex.1997) (declining to enhance damages, and noting that "there is no indication that any imprecision was a result of Defendants' conduct"). Finally, while Taco Cabana does not bar a court from enhancing damages when the imprecision stems from something other than a defendant's obstruction, this Court declines to use its discretion to further enhance an already substantial damages award based on nothing more than Plaintiff's own assertions that he suffered additional, un-quantified damages.
In its Motion for Supplemental Damages, Clearline seeks supplemental actual damages for Cooper's continued sales of the DURA-BLOKs™ after the adverse jury verdict. Clearline requests that Cooper be ordered to provide its sales numbers from October 5, 2012, the date of the verdict, to the present. Cooper has refused to do so to date. Clearline also requests that the Court award supplemental actual damages to Clearline, and enhance those damages based on Cooper's willful continued infringement.
Neither the parties, nor this Court, could find any case law under the Lanham Act addressing the question of supplemental damages for the continuing sale of infringing products post-verdict. However, both parties agree that patent case law has addressed this question. Patent law has recognized that awarding supplemental damages for post verdict infringement is appropriate and, indeed, required. See, e.g., SynQor, Inc. v. Artesyn Techs., Inc., 709 F.3d 1365, 1384 (Fed.Cir.2013); Finjan, Inc. v. Secure Computing Corp., 626 F.3d 1197, 1212-13 (Fed.Cir.2010).
The provision governing damages in patent cases provides as follows:
35 U.S.C. § 284. This provision appears, at first glance, rather similar to the Lanham Act's damages provision. See 15 U.S.C. § 1117(a) (providing for compensatory damages and leaving district courts with discretion to award up to three times the amount of damages assessed by a jury). Notably, however, § 284 does not contain the prohibition on punitive damages that exist in the Lanham Act. See 15 U.S.C. § 1117(a) (providing that damages awarded under the Lanham Act "shall constitute compensation and not a penalty"). Accordingly, the second paragraph of § 284 has been understood to allow a district court discretion to award enhanced damages as a penalty for willful infringement. Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572, 1579 (Fed.Cir.1996) (noting that § 284 provides for punitive damages); Beatrice Foods Co. v. New England Printing and Lithographing Co., 923 F.2d 1576, 1579 (Fed.Cir.1991) ("Under our cases, enhanced damages may be awarded only as a penalty for an infringer's increased culpability, namely willful infringement or bad faith."). This, of course, is directly contrary to how the Fifth Circuit has interpreted the Lanham Act provision allowing a court to "enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount." 15 U.S.C. § 1117(a); see Taco Cabana, 932 F.2d at 1127 (recognizing that enhancement is appropriate only where the damages awarded fail to adequately compensate a plaintiff).
Despite this important difference, the Court agrees with Clearline that patent law provides useful guidance on the question of whether to award supplemental damages for post-verdict infringement. This is because patent case law makes clear that supplemental damages for post-verdict infringement are required as compensation. See Finjan, 626 F.3d at 1212-13 (recognizing that a patentee is not "fully compensated" unless the damages award includes sales following the verdict); Fresenius USA, Inc. v. Baxter Int'l, Inc., 582 F.3d 1288, 1303 (Fed.Cir.2009) (noting that "[a] damages award for pre-verdict sales of the infringing product does not fully compensate the patentee because it fails to account for post-verdict sales").
The Court concludes that the above case law supports some award of damages for the post-verdict sales. However, at this time, there is no evidence in the record as to the amount of post-verdict sales. Accordingly, the Court declines, at this stage, to determine the appropriate formula for determining what proportion of Cooper's post-verdict sales Clearline is entitled to, and whether the supplemental damages ought to be enhanced because Cooper's post-verdict infringement was allegedly willful. The Court orders Cooper to produce to Clearline, within fifteen days, its post-verdict sales figures of DURA-BLOKs™. Parties are expected to engage in any discovery necessary to accurately determine the damages Clearline incurred from post-verdict sales of DURA-BLOKs™. The Court encourages parties to attempt to reach an agreement on an appropriate supplemental damages award. If parties cannot reach an agreement, however, Clearline should re-file its Motion for Supplemental Damages within forty-five days and include briefing on the appropriate method of calculating damages stemming from post-verdict sales. The Court will evaluate whether an evidentiary hearing is necessary upon reviewing the parties' filings.
Pre-judgment interest is not provided for in 15 U.S.C. § 1117(a). Am. Honda
Clearline requests both pre-judgment interest and post-judgment interest on its entire damages award, and on any attorneys' fees awarded. Specifically, Clearline seeks pre-judgment interest in the amount of five percent. It seeks post-judgment interest at the rate provided for in 28 U.S.C. § 1961(a). Cooper argues the Court should not award pre-judgment interest because the jury was already instructed to make Clearline whole with its lost profit award. Cooper also argues that pre-judgment interest should be awarded only in exceptional cases, citing Gorenstein and American Honda. Cooper then argues that, even if pre-judgment interest is awarded, it should only be awarded for Clearline's lost profits, not for Cooper's profits. Cooper also disputes the five percent interest rate, arguing that a pre-judgment interest rate of 3.35 percent is appropriate. Finally, Cooper does not dispute that, if post-judgment interest is awarded, it should be in accordance with 28 U.S.C. § 1961(a).
Cooper's assertion that the jury may have already awarded pre-judgment interest is specious. The jury was never instructed to consider interest, and there is no suggestion that it did. Carrying Cooper's argument to its logical conclusion, pre-judgment interest should never be awarded by a court, unless a jury was specifically instructed not to consider interest. The Court declines to adopt such a position.
Clearline and Cooper disagree as to the appropriate rate to be used in calculating prejudgment interest. Clearline states that the average prime rate from the date of accrual of the claim to the date its motion was filed was five percent. Clearline's assertion is contradicted by the prime interest rates it itself provides. (See Doc. No. 155 at 3 (indicating that the prime interest rate was five percent in May 2008 and 3.25 percent at the time Clearline filed its motion).) It also argues, in the alternative, that the Court may use, instead of the prime interest rate, the rate Cooper paid for unsecured loans, and urges the Court to presume that rate was five percent, because Cooper has provided no evidence to the contrary. Clearline also asks this Court to use its discretion to compound the interest rate at least annually. If the Court does award interest, Cooper does not disagree with using the prime interest rate, but points out that Clearline's proposed rate is inaccurate and lists its own prime interest rate figures throughout the relevant time period.
The Gorenstein court advised district courts to use the prime rate for fixing pre-judgment interest cases where no statutory interest rate governs. Gorenstein, 874 F.2d at 436. The prime interest rate "is a readily ascertainable figure which provides a reasonable although rough estimate of the interest rate necessary to compensate plaintiffs not only for the loss of the use of their money but also for the risk of default." Id. The Gorenstein court recognized,
The Court further believes that compounding the interest would more closely return Plaintiff to its position absent infringement. After all, returns on an investment may be reinvested and earn further returns. Accordingly, the Court uses its discretion to order that the pre-judgment interest be compounded annually. Gorenstein, 874 F.2d at 437.
The Court is somewhat baffled by the parties' apparent disagreement as to the average prime rate, an easily ascertainable fact. Rather than providing unsupported assertions of the prime rate at random intervals between May 2008 and May 2013, the parties should review the detailed historical data available from the Federal Reserve regarding the prime rate. Once the remaining issue of supplemental damages is resolved, the parties will be expected to consult http://www.federalreserve.gov/releases/h15/data.htm to determine the average prime rate from May 2008 until the date of final judgment. The parties then will be required to submit an agreed proposal detailing the prime rate during the relevant time period and calculating the dollar amount of pre-judgment interest Clearline is owed based on the foregoing.
Finally, Clearline will be entitled to post-judgment interest as provided in 28 U.S.C. § 1961 on the full amount of the money judgment "at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding[] the date of judgment." 28 U.S.C. § 1961. The applicable weekly average 1-year constant maturity Treasury yield should be determined by consulting http://www.federalreserve.gov/releases/h15/current/default.htm. The determination will be made when the Court enters final judgment.
To be entitled to a permanent injunction under the Lanham Act, a party must demonstrate: "(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction." Flowserve Corp. v. Hallmark Pump Co., 2011 WL 1527951, at *9 (S.D.Tex. Apr. 20, 2011) (quoting eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006)).
Some courts have suggested that a finding of likelihood of confusion can satisfy the irreparable harm requirement. See Philip Morris USA Inc. v. Lee, No. P-05-CA-0490-PRM, 547 F.Supp.2d 667, 680 (W.D.Tex.2008); Coach, Inc. v. Brightside Boutique, No. 1:11-CA-2-, 2012 WL
These conflicting precedents make a district court's determination as to the propriety of an injunction in a variety of intellectual property cases more difficult than it perhaps once was. Nonetheless, certain principles provide valuable guideposts. Where the infringement involves direct competitors, a finding of irreparable harm may well be appropriate. See z4 Techs., Inc. v. Microsoft Corp., 434 F.Supp.2d 437, 440 (E.D.Tex.2006). Continuing infringement, even after an adverse verdict, is surely sufficient to show inadequacy of remedies at law. 1 McCarthy on Trademarks and Unfair Competition § 30:2 ("If an injunction were denied, the court would be telling plaintiff to sit by and watch defendant continue to violate the law and infringe upon plaintiff's rights until such time as plaintiff decided to sue again for money damages as compensation for the past injury incurred."). In contrast, a trial court has substantial discretion to deny an injunction where infringement was inadvertent and is not likely to recur. See, e.g., Schutt Mfg. Co. v. Riddell, Inc., 673 F.2d 202, 207 (7th Cir.1982); In re Circuit Breaker Litig., 860 F.Supp. 1453, 1456 (C.D.Cal.1994). Where a district court does issue an injunction, it has substantial discretion to tailor the injunction in light of the equities. See 1 McCarthy on Trademarks and Unfair Competition § 30:3 (collecting cases where the courts have allowed defendants to use infringing marks with a disclaimer, and allowing defendants to sell off existing stock). If the infringement was willful, however, a court does not have to balance the hardships. United States v. Marine Shale Processors, 81 F.3d 1329, 1358-59, 1359 n. 16 (5th Cir.1996); Helene Curtis Indus., Inc. v. Church & Dwight Co., 560 F.2d 1325, 1333-34 (7th Cir.1977). Finally, the "public interest is always served by requiring compliance with Congressional statutes such as the Lanham Act and by enjoining the use of infringing marks." Quantum Fitness Corp. v. Quantum LifeStyle Ctrs., L.L.C., 83 F.Supp.2d 810, 832 (S.D.Tex.1999); see also T-Mobile USA Inc. v. Shazia & Noushad Corp., No. 3:08-CV-00341, 2009 WL 2003369, at *4 (N.D.Tex. July 10, 2009).
Clearline argues that it is entitled to a permanent injunction enjoining Cooper
This record supports a finding of irreparable harm from Cooper's use of an infringing black and yellow color scheme. The jury found likelihood of confusion, and here, Clearline and Cooper are direct competitors. At the time Clearline filed its motion, Cooper's website continued to advertise the black and yellow DURA-BLOKs™. (Doc. No. 157-1 ¶ 4.) Furthermore, at oral argument, Cooper admitted that it continued to sell the infringing DURA-BLOKs™ to this day. Cooper's sales of its infringing rooftop support products have continued to exclude Clearline from reaching certain customers, supporting a finding of irreparable harm. See z4, 434 F.Supp.2d at 440. Furthermore, this is a clear case where remedies at law are inadequate. Cooper has continued to sell the DURA-BLOKs™ despite a jury verdict against it. Denying Clearline an injunction would leave it in the untenable position of continuously suing for past damages.
One factor weighing somewhat against issuing a permanent injunction is Cooper's apparent intention to transition, in the very near future, to a different color scheme. Clearline alerted the Court that, in an April 19, 2013 email blast to its distributors, Cooper announced that it was switching to a red and black color scheme on its DURA-BLOKs™. (See Doc. No. 192-1.) At oral argument, Cooper confirmed that it would be introducing the new color scheme sometime around June 10, 2013. "It is within the discretion of the trial court to grant or deny an injunction against conduct which has ceased and is not likely to recur." See, e.g., Schutt, 673 F.2d at 207; K & G Men's Co. v. Carter, No. 10-309-JJB-SCR, 2010 WL 4135202, at *1 (M.D.La. Oct. 19, 2010). However, here, Cooper has only taken steps to cease its infringing conduct, but has not actually done so. Indeed, Cooper's actions come months after ignoring a jury verdict against it. Furthermore, at oral argument, Cooper indicated that, while it was developing a new color scheme, it would prefer to keep using the yellow and black color scheme. Given Cooper's disregard of the jury verdict to date, the Court is not at all convinced that Cooper would not revert to its original color scheme if it was unhappy with the red and black color scheme.
As discussed previously, the evidence can sustain the jury's finding of willfulness. See supra Part II.B.2. However, as noted supra Part II.B.2, Cooper also presented evidence that it merely combined two functional features with desirable benefits. While the Court need not, on the basis of this evidence, grant judgment as a matter of law on the question of willfulness, Cooper's evidence is sufficient to convince this Court that this is not a clear case of willful infringement. See infra Part VII.B. As such, the Court declines to use its discretion in a manner that does not balance the equities. Cf. Marine Shale Processors, 81 F.3d at 1358-59 (recognizing that in cases where a defendant's conduct was willful, a court was not required to balance the equities). Balancing the equities, however, poses little difficulty in this instance. Cooper has already been working on a new color scheme for several months, and will not have difficulty transitioning. Finally,
The factors support a permanent injunction enjoining Cooper from continued use of the infringing black and yellow color scheme. However, Clearline is not entitled to the broad injunction it seeks barring Cooper from using any black and yellow color scheme. While the facts support a conclusion that the particular combination of black and yellow was not functional and likely to cause confusion, see supra Part II.B. 1.a-b, the jury verdict cannot, and should not, be interpreted to mean that all black and yellow color schemes are off-limits. After all, the jury found the yellow reflective striping used by Cooper functional and not likely to cause confusion, and the record contains evidence that the black color was functional. (Doc. No. 151 at 2, 4; Trial Tr. 849:8-851:6.) It is entirely possible that another combination of these features would be either functional or not likely to cause confusion. Accordingly, Cooper is immediately and permanently enjoined from using the particular black and yellow color scheme it has been using on its DURA-BLOKs™, and any other black and yellow color scheme that would be confusingly similar to the black and yellow color scheme Clearline has been using on its C-PORTs®.
In contrast, the record does not warrant permanently enjoining Cooper from using the C-PORT® mark. The evidence showed that Cooper had recognized the need to remove the C-PORT® mark from its internet code and tradeshow catalogues, and taken steps to do so, well before the jury verdict, although it had clearly missed some references. (See, e.g., Trial Tr. 806:4-809:22, 899:25-900:9, 933:19-935:14, 1174:17-1175:11.) Cooper represented, at oral argument, that it no longer retained any references to the C-PORT® mark in its internet code or its tradeshow catalogues. Clearline agreed that it was not aware of any continuing infringement of its trademark. In circumstances like these, where the infringement may well have been inadvertent and recurrence is unlikely, an injunction is not warranted. See, e.g., Schutt, 673 F.2d at 207; Circuit Breaker Litig., 860 F.Supp. at 1456.
Clearline seeks attorneys' fees under the Lanham Act. "The court in exceptional cases may award reasonable attorney fees to the prevailing party." 15 U.S.C. § 1117(a). "The prevailing party has the burden to demonstrate the exceptional nature of a case by clear and convincing evidence." Seven-Up Co. v. Coca-Cola Co., 86 F.3d 1379, 1390 (5th Cir.1996) (citing CJC Holdings, Inc. v. Wright & Lato, Inc., 979 F.2d 60, 65 (5th Cir.1992)). "An exceptional case is one where the violative acts can be characterized as `malicious,' `fraudulent,' `deliberate,' or `willful.'" Id. (citing Moore Bus. Forms, Inc. v. Ryu, 960 F.2d 486, 491 (5th Cir.1992)); see also Taco Cabana, 932 F.2d at 1127. The Fifth Circuit has recognized that many courts "require a showing of a high degree of culpability on the part of the infringer, for example, bad faith or fraud," before a case can be found exceptional. Seven-Up, 86 F.3d at 1390 (citing Tex. Pig Stands, Inc. v. Hard Rock Café Int'l, 951 F.2d 684, 696-97 & n. 25 (5th Cir.1992); Moore, 960 F.2d at 491 & n. 2.). It is not clear whether the Fifth Circuit has itself adopted such a requirement. Compare Moore, 960 F.2d at 492 (applying the standard requiring a high degree of culpability, such as bad faith or fraud) with Tex. Pig Stands, 951 F.2d at 697 n. 25 (declining to draw a "bright line" requiring that a case
Clearline also moves for attorneys' fees under the Illinois Uniform Deceptive Trade Practices Act ("DTPA"). The standard for liability under the DTPA is the same as that under the Lanham Act. Tarin v. Pellonari, 253 Ill.App.3d 542, 192 Ill.Dec. 584, 625 N.E.2d 739, 745-46 (1993). The DTPA provides that "[c]osts or attorneys' fees or both may be assessed against a defendant only if the court finds that he has willfully engaged in a deceptive trade practice." 815 Ill. Comp. Stat. 510/3. "[A]ttorneys' fees are awarded to the prevailing party under the DTPA under a similar analysis as the Lanham Act." Neuros Co., Ltd. v. KTurbo, Inc., No. 08-cv-5939, 2013 WL 1706368, at *4 (N.D.Ill. April 17, 2013).
Clearline argues that it is entitled to attorneys' fees under the Lanham Act or, in the alternative, under the DTPA because this case is exceptional, pointing to the jury's finding of willfulness. It requests approximately $1.5 million in attorneys' fees. Cooper argues that attorneys' fees are inappropriate because Clearline should not be the prevailing party for the reasons argued in Cooper's JMOL. These arguments have been thoroughly addressed. See supra Part II.B. Cooper next argues that this case is not exceptional because Cooper merely copied functional features, and this case does not involve the high level of culpability generally found in cases where attorneys' fees are awarded. It also argues that Clearline's proof of fees is inadequate.
The Court agrees with Cooper that this case is not exceptional. Although the jury was presented with sufficient evidence to conclude that that the infringement was willful by a preponderance standard, see supra Part II.B.2, the Court does not find that Cooper infringed willfully by a clear and convincing standard. Seven-Up, 86 F.3d at 1390. The record also contains a significant amount of evidence that the black recycled rubber and the yellow color were each selected for their functional benefits. See supra Part II.B.2. This evidence suggests that Cooper may have infringed on a nonfunctional combination of these functional features unintentionally, out of a desire to obtain the benefits of the individual functional features. Although the Court does not find indefensible the jury's determination that Cooper's infringement under a preponderance standard, it does believe that, at most, there was only enough evidence to support a finding of willfulness by a preponderance, and not by clear and convincing evidence.
Furthermore, the Court does not agree with Clearline that this is a case of bad faith and "brazen imitation." Taco Cabana, 932 F.2d at 1128. Unlike Taco Cabana, which involved infringement of the trade dress a plaintiff had in the appearance of a chain of Mexican restaurants, this case involves a combination of features that, independently, are likely functional. Cooper may well have copied Clearline's trade dress because it, in good faith, believed there was nothing protectable about it. While the jury ultimately concluded that the combination was protectable, Cooper has surely presented "what it in good
Based on the foregoing, the Court concludes this is not an exceptional case. Accordingly, Clearline's request for attorneys' fees under the Lanham Act is denied. Because attorneys' fees are provided under the DTPA under a similar analysis as the Lanham Act, and because the Illinois statute similarly vests this Court with discretion to award or not award fees even in cases of willful infringement, the Court also declines to award fees in this case under the DTPA. See 815 Ill. Comp. Stat. 510/3; Neuros, 2013 WL 1706368, at *4.
For the reasons discussed above, the Court holds as follows:
