Case 1 :04-cv—O1278-KAJ Document 230-6 Filed 10/27/2005 Page 2 of Rage 1
1 cf i DOCUMENT ·
TOMMY HILFIGER LICENSING, INC. v. SUPERVALU, INC., et al.
‘ CIVIL ACTION N0. 97-4047
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF
PENNSYLVANIA
1999 U.S. Dist. LEXIS 2625
March 8, 1999, Decided
March 10, 1999, Filed
DISPOSITION: {*1] 'l`hird—Pa1ty Piaintiffsf Motion LexisNexis(R) Headuetes
DENHED with leave t0 renew.
Civil Procedure > Early Pretrial Judgments > Default >
CASE SUMMARY: Entry 0fDefaul1 & Default Judgment
[HN1] A default judgment does not estabiish the amount
Im UH E _ . . . cf damages. Although a defauitjudgment forces a defen- ‘
ggggcxgl Oggd for aiwihgd §;';t);€¥;?l;;;f;i dant tn concede iiability, it does not force it tc concede
ing magnetjxgpdamagcs from thixppaigy dcfcndmits fm- liability fer the amount of damages that a plaintiff has
lowing a negotiated settlement in a trademark infringe- iimgiiibiiagiggcgs a§cH;?;;Og?rl;$5 ii §::g?bt:§€:_3;§
ment action by plaintiff company against defendant com- D E) .. '
mics amages may be awarded only if the record adequately
P ' refiects the basis for award via a hearing or a demen-
" OVERVl.EW_ The lmdcdymg Case involved 3 Ragga- straticn by detailed afiidavits establishing the necessary
ated settlement between plaintiff company and defendant {acm
companies for trademark infringement under the Lanham Trademark Law > Infringement Actions > Remedies >
Act, 15 US.C.S. § 1117(a). Third-party plaintiffs sought Damages > General Overview
indemnification under 13 Pa. Star. Ann. § 2312(c) for [HN2] See 15 US.C.S. § J}17(a). =
damages and att0mey's fees sustained from the sale cf . . .
cicthing purchased from third—party defendant. A default iiziggzark Law > Infnngemmt Among > Remedies > _
judgment had been entered in favor of third-party plain- . . .
tiffs and against thirci—party defendant. The order directed l];1a;;m;r;?,f;I; g;;:g;?ent Admns > Remedies >
third—party plaintiffs tc file a motion for more specific Tmdegwrk Law > Infringement Actions > Remedies >
reiief with substantiaticn. Third party piaintiffs sought Auormg Fees g
damages and att0mey’s fees inthe am0t1nt0f$3{},95G.26. [HN3] {the Lanham Act, I5 U S C S § Ulyw) mmm
Plaintiffs claimed that amount constituted the proportion COMES to award monmar dam; és;. trademark EWG
of the negotiated settkernent attributable t0 third-party . .y . ETS
defendant The Coun denied the motion by third_p2my as compensation where 1EiS equttabie tc do so regardless
piaimigs with leave {O renew as their mgumgms were iw ef the wiiltuiness of the defendanfs infringement. Untike
sufficie nt. Third-party pkaintiffs failed to address the issue ggggmg Oggiiiggaxi (;i?;{g;;€;; $@5 igiggg
cf bad faith, fraud, malice, cr knowing infringement as for mi réwve Ofacwal dama as under 15 U S C S §
it pertained to att0meys' fees. Thus, the court declined to l I NT3) ry g ` ` ` '
rule en their motion at this juncture in the proceeding. `
Trademark Law > Infringement Actions > Remedies >
OUTCOME: The court denied third-party plaintiffs me- Damages > General Overview
tion for more specific reiief, but granted leave tc renew, [HN4] The issue of willful infringement is centraE t0
as they failed to address matters cf had faith and fraud in awarding attcmeys’ fees under the Lanham Act, 15
trademark infringement, which 00uEd affect the alicwance iLS.C.S. § U17. Under the Lanham Act, the prevaiking
of attorneys fees. party has the burden of proving by clear and convincing
evidence that an exceptional case exists such that an award
Case 1:04-cv—01278-KAJ Document 230-6 Filed 10/27/2005 Page 3 of Hess?
1999 U.S. Dist. LEXIS 2625, *1
of attorneys fees is justilied. Anexceptional case requires (Jacobs-Meadway Decl. P 3, Docket No. 26.} CTFs
bad faith, fraud, malice, or knowing infringement on the Ti1ird—Paity Complaint asserts that ADI is obligated to
part ofthe infringing party.Wil1ful infringement involves indemnify CTI, pursuant to 13 Pa. Cons. Stat. § 2312(c),
an aura of indifference to plaintiffs rights or a deliben for all injuries, damages, costs, expenses and attorneys
ate and unnecessary duplicating of a plaintiffs mark in a fees sustained by 'i`hird·»Party Plaintiffs arising out of the
way that was calculated to appropriate or otherwise ben- sale by CTI of articles of clothing of Tommy Hiitiger
ent from the good will the plaintiff had nurtured. Wiilful Licensing, Inc. ("'1`ommy Hilfilger" or "Plaintiff") pur- .
infringement carries a connotation of deliberate intent to chased from ADl./ nl .
deceive.
nt This case stems from a cornptaint filed by
COUNSEL: For TOMMY HILFIGER LICENSING, Tomniy Hilfiger against Supervala, Inc., Laneco,
INC., PLAIENTIFF: M. KELLY TILLERXZ LEONARD, Inc.. Carolina Trading, Inc., and Mark Lewis _
TILLERY AND SCIOLLA, PHILA, PA USA. {collectively, the "Dcfendants"). In its Complaint,
Plaintiff sought injunctive relief and damages for .
For SUPERVALU, INC., LANECO, INC., A Division acts of trademark infringement, counterfeiting,
of SUPERVALU, INC., DEFENDANTS: PATRICIA L. dilution and unfair competition engaged in by
DEE, CAPEHEART & SCATCHARD, PA., MOUNT Defendants.
LAUREL, NJ USA.
at Casa]-at- M¤1~¤» as- are ¤AR¤¤—t~A ...si2f‘§.?‘&‘l“ti‘if;lLi3.l;.°§§i§.l‘;?.t‘i.fiZ`I,“.;'§.“§t—f§"§
APPAREL TRADING, INC., MARK LEWIS, .
a atnst ADI (See Order dated Se 10 1998 CIVA
DEFENDANTS: ROBERTA 3ACOBS—MEADWAY§ § 97 4O47` Th *3 O d d. p' d lh T _’ d ' '
mnircn scr-iwaaza tacons &. mont. Plzintfpfs ,,E‘) HE at lm iff; “'°°‘° is h"iTg*‘¥*Y
PH1M¤>ELrH¤A~PA me .i..;i.§, ....‘l.,..i§.i2..,?—;?l‘,.2.,‘;"Zi‘.?trS.f§§,2‘.§.i.;% .13.; ‘
For CAROLENA TRADING, INC- Z/R/3 CAROLINA substantiation in suppoit thereof on or before September
A?PAREL TRADING, INC-, ,H_HRD_PAR,{,Y 18,.1998. (Id.) On ‘Scptember .18, 1993, the Third-Party
PLAIN,1.,H:F_ ROBERTA JACOBS_MEADWAY Plaintiffs tiled the mstant motion requesting more spe-
. ntrurcn lscnwzutzs moons at moat.; EQHC ;?%fO;“‘"’;‘;“‘ ;§€‘;‘° 2£d°I·d}?;1gf (iff, has 9*;*
rnitaonrrntn, PA usa. foiiahigcoug m f“ rw "’ me ff ‘S HOW f`
JUDGES: HERBERT J. BUTTON, I. 1}.. DISCUSSION
OHNIONBY: HERBERT J- HUTTON A. Third-Party Plaintiffs Motion
The Third-Party Plaintiffs request the Court to enter
OPINION: default judgment in favor of CTI and against ADI grant-
MEMORANDUM AND ORDER ing damages and attorney's fees in the amount of thirty-
thousand nine—hundred fifty dollars and twenty-—six cents
HUTTON J ($ 30,950.26.). More specificaliy, CTI seeks twenty-seven .
’ ' thousand three-hundred forty-five dollars and forty-six
March 8, 1999 cents (5 27,345.46) in damages and three-thousand six-
nmi, strait its Ceuta it at unopposed Mss, lgiygijgrjggrfer;j;g;,g;,a§*rdj€¤tS,.<§ %§°3·;¤>;; **2
for More Specific Reiief by Carolina Trading, Inc. ADI fog . dc lib fm F gm mf (ETSFE. Pm
at Me ter
iaw, are rnrra-Party Piamnrtr Metres as naman was . . ‘ ,, E “ . ‘T““ ‘*‘ M50"`
have to renew able in (lrgtht o; the [ éldrecovery Plaintiff would have
` obtaine i it ad prove its case; and (2) the amount
I. BACKGROUND constitutes the proportion ofthe negotiated settlement at-
On October 23, l99“/, Carolina Trading, Inc. and Mark ¤?;;§a:}§;tOOg;?I`;$ ijliponczhis c?gTf;}?; $$*1 lfgliig
rain.; rceiteeuvaty, ··cr1·· or "rntra-pany Plaintiffs") B S Y Y" A "E "·"" _ · · * · _ “
. . {E.D. Pa. I984). This Court finds CTI s arguments insuf-
[*2] served a Third—Party Complaint on Advance §C.€m Ac di I CTFS M t. .5 d . 6 {hl
oitaeuan, inc. r··Ant·· or ··r1nn1-Patty otnnaawy. m;€W‘ mf “g Yt O """ fm “" "’“"€ *0
Case 1:04-cv—O1278-KAJ Document 230-6 Filed 10/27/2005 Page 4 of Rage 3
1999 U.S. Dist. LEXIS 2625, *4
112 $21345.46 plus $3,603.80 equals the prevailing party. ·
$30,949.26.
_ I5 U.S.C. § 1117(ai}.
I. Analysis [HN3} The Lanham Act permits courts to award
[HNI} "A default judgment does not establish the nwnetafy dtmigfs Ki trademark Owners as compensa-
.. . . tion where it as equitable to do so regardless of the
amount of damages. United States v. Shtpco Gen., Inc., . , . .
. ., willfulness of the defendants uifrzngement. See 5 5.
814 I€2d 1011, IOI4 (5:}: Cir: 1987). Although a de- .
. . . . . Thomas McCarthy, McCarthy on Trademarks and Unfair
fault judgment forces a defendant to concede iiahility, it . . ,, .
. . . . Competition § 30.75 at 30-128 (4th Ed. 1996) ( Unhke
does not force it to concede isabtlity for the amount of ,
. . . ,, recovery of defendants profits, attorney fees and treble
damages that a plaintiff has ciaamed. Shepherd va Am. . . .
. damages, no wrongful intent or state of mind rs needed
Broadcasting C0., Inc., 862 FI Supp. 486, 491 (D.D.C.
. . ,,. . for the recovery of actual damages [under I5 USC. §
1994). Damages are improper for a ciaim that is so irn- 1, I Nm) T,)
plausible that as a matter of law it must be denied." Id. ` `
at 492. "Damages may be awarded oniy if the record ad- Conversely, {HN4] the issue of willful infringement
equately reflects {*5} the basis for award via 'a hearing is central to awarding attorneys fees under the Lanham
V or a demonstration by detailed affidavits establishing the Act. Under the Lanham Act, the prevailing party has the
necessary facts.’" Adofph Coors Co. v. Movement Against burden of proving [*7] by clear and convincing evidence _
Racism & The Klan, 777EZd 1538, 1544 (Nth Cir 1985) that an exceptional case exists such that an award of at~ I
(quoting United Artists Corp. it Freeman, 605 E2d 854 torneys' fees is justified. See, e.g., Seven-Up C0. it Coca-
(5:}: Cir: I979)). †Coin, C0., 86 E3d 1379, 1390 (5th Cir: 1996}. The Third
Circuit has held that an "exceptionai case" requires "bad
2'Lanhgn Act faith, fraud, malice, or knowing infringement" on the
{HN2} Section 35 of the Lanham Act, 15 USC. § part of the infringing party. See Ferrero (LSA. v. Ozak
I117 provides in pertinent part that: Trading, Inc., 952 FI2d 44, 47 {3d Cin 1991}. The Second
Circuit described willful infringement as involving "an
When a violation of any right of the regis· aura of indifference to plaintiffs rights" or a "deliberatei]
trant of a mark registered in the Patent and and unnecessary duplicating [of a] plaintiffs rnark in a
Trademark Office, or a violation under sec· way that was calculated to appropriate or otherwise ben—
tion 43(a), shall have been estabiished in any ent from the good wiil the piaintiff had nurtured." WE.
civil action arising under this Act, the plain— Bassett Co. it Revlon, Inc., 435 FI2d 656, 662 (2d Cir:
tiff shall be entitled, subject to the provi~ 1970) (citation omitted); see also Rolex Watch USA, Im:.
sions of sections 29 and 32 and subject to it Mecca, 158 F3d 816, 823 {Sth Cin 1998) ("willful in-
the principles of equity, to recover (1) de- fringernent carries a connotation of deliberate intent to
fendanfs proiits, {2) any damages sustained deceive.") (quoting Lindy Pen C0. u Bic Pen Corp., 982
by the plaintiff, and (3) the costs of the ac- E2d 1400, 1405 (9th Cir.), cert. denied, 510 US. 815, 126
tion. The court shail assess such profits or L, Ed. 2d 34, I 14 S. Cr. 64 {1993)}.
gauge the Same {9 be assessed uniici ms dl- In the instant motion, CTI does not address the issue
rection. In assessing profits the plaintiff shall . . . . .
. . of had [*8] faith, fraud, malice, or knowing infringement
be required to prove defendants sales only; . . , ,
as it pertains to attorneys fees. Thus, the Th1rd-Party
defendant must prove all elements of cost of . . , . . .
. . . Plaintiffs Motxon must be denied with Eeave to renew.
reduction claimed. In assessang damages the
court may enter judgment, according to the An appropriate Order foiiows.
circumstances ofthe case, for any sum above
[*6} the amount found as actual damages, ORDEX
not exceeding three times such amount. if AND NOW, this Sth day of March, 1999, upon consid· -
the court shall find that the amount of recov— eration of the unopposed Motion for More Specific Relief
ery based on profits is either inadequate or by Carolina Trading, Inc. and Mark Lewis (cotlectively,
excessive the coun may in its discretion en- "CTI" or "Third—Party Plaintiffs") (lbocket No. 28), IT
ter judgment for such sum as the court shall IS HEREBY ORDERED that the “i`hird-Party Plaintiffs
find to be just, according to the circumstances Motion is DENIED with leave to renew.
of the case. Such sum in either of the above BY THE COURT:
circumstances shall consutute compensation
and not a penalty. The court in exceptional HERBERT 3. HUT'1`ON,J.
cases may award reasonable attorney fees to
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