Copyrights and Trade Dress Are Not Mutually Exclusive

In Jason Scott Collection, Inc. v. Trendily Furniture, LLC, No. 21-16978, — F.4th — (9th Cir. May 30, 2023), the Ninth Circuit recently reiterated that copyright and trademark claims are not mutually exclusive. See, e.g., Wal-Mart Stores v. Samara Bros., 529 U.S. 205, 208 (2000) (involving claims for both copyright and trade dress infringement); Art Attacks Ink, LLC v. MGA Entertainment, Inc., 581 F.3d 1138, 1142 (9th Cir. 2009) (same); Mattel, Inc. v. Walking Mountain Productions, 353 F.3d 792, 796 (9th Cir. 2003) (same); Rachel v. Banana Republic, Inc., 831 F.2d 1503, 1504 (9th Cir. 1987) (same).

That copying must be proven to establish copyright infringement and may be relevant to the analysis of secondary meaning to prove trade dress infringement does not mean that the trademark and copyright laws remedy the same wrongs.

The District of Arizona granted summary judgment on the copyright claim for certain ornate furniture designs, and awarded damages in the amount of $19,995 to Jason Scott Collection (“JSC”) which were Trendily’s profits on the infringing sales.

After a bench trial on the trade dress claim for that furniture, the district court concluded that JSC’s ornate furniture designs had acquired secondary meaning. JSC was awarded $132,747 in damages from JSC’s lost profits over a period of three years from lost sales to Coyote Candle, a business relationship that was lost as a result of the lawsuit. The district court also awarded $132,571.50 in reasonable attorneys’ fees to JSC.

Inferring Secondary Meaning from Intentional Copying

On appeal, the Ninth Circuit concluded that the district court did not clearly err in finding that JSC established secondary meaning, noting that “[p]roof of copying strongly supports an inference of secondary meaning.” P & P Imports LLC v. Johnson Enterprises, LLC, 46 F.4th 953, 961 (9th Cir. 2022) (quoting Vision Sports, Inc. v. Melville Corp., 888 F.2d 609, 615 (9th Cir. 1989)); see also adidas Am., Inc. v. Skechers USA, Inc., 890 F.3d 747, 755 (9th Cir. 2018); Audio Fid., Inc. v. High Fid. Recordings, Inc., 283 F.2d 551, 558 (9th Cir. 1960) (“There is no logical reason for the precise copying save an attempt to realize upon a secondary meaning that is in existence”).

The Court noted some other circuits have imposed an “intent to confuse” requirement when considering the intentional copying factor in the secondary meaning analysis because, for example, competitors may have intentionally copied wholly functional features for those features’ intrinsic economic benefits. See Thomas & Betts Corp. v. Panduit Corp., 65 F.3d 654, 663 (7th Cir. 1995) (“Copying is only evidence of secondary meaning if the defendant’s intent in copying is to confuse consumers and pass off his products as the plaintiff’s.”); Yankee Candle Co., Inc. v. Bridgewater Candle Co., LLC, 259 F.3d 25, 45 (1st Cir. 2001) (same); Groeneveld Transport Efficiency, Inc. v. Lubecore Int’l, Inc., 730 F.3d 494, 514 (6th Cir. 2013) (same). But neither the Ninth nor the Fourth Circuits have adopted this requirement for secondary meaning when there is intentional copying. See, e.g., Fuddruckers, Inc. v. Doc’s B.R. Others, Inc., 826 F.2d 837, 844 (9th Cir. 1987) (deliberate copying is relevant to secondary meaning, and “in appropriate circumstances . . . may suffice to support an inference of secondary meaning”) and M. Kramer Mfg. Co., Inc. v. Andrews, 783 F.2d 421, 448 (4th Cir. 1986) (“evidence of intentional, direct copying establishes a prima facie case of secondary meaning”).

In addition, citing P & P Imports, 46 F.4th at 961, the Court noted that Mr. Scott’s “longstanding and well-known presence in the high-end furniture market supports the district court’s finding of secondary meaning.”

Presuming Confusion from Intentional Copying

Although there was no evidence of actual confusion, the Ninth Circuit noted that courts may “presume a likelihood of confusion based on a showing of intentional copying,” citing Fuddruckers, Inc. v. Doc’s B.R. Others, Inc., 826 F.2d 837, 846 (9th Cir. 1987) and M. Kramer Mfg. Co., Inc. v. Andrews, 783 F.2d 421, 448 n.24 (4th Cir. 1986). See also Restatement Third, Unfair Competition § 22, comment c (“[I]f there is proof of intentional copying with no alternative explanation, an intent to benefit from the other’s good will through confusion may be inferred.”).

And the copying in this case is so blatant that it is hard to imagine any other reason for it than Trendily’s desire to take advantage of JSC’s good will. . . . Plus, “the failure to prove instances of actual confusion is not dispositive against a trademark plaintiff, because actual confusion is hard to prove; difficulties in gathering evidence of actual confusion make its absence generally unnoteworthy.” Perfumebay.com, Inc. v. eBay, Inc., 506 F.3d 1165, 1176 (9th Cir. 2007) (citation omitted).

Also, actual confusion “in the trade” (by retailers as opposed to their consumers), could support finding a likelihood of confusion. AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 352 (9th Cir. 1979).

Retrospective Gross Profits & Prospective Lost Profits

Even though the $132,747 award of lost annual profits over a period of three years for trademark infringement was six times the $19,995 in Trendily’s profits that JSC had been awarded for copyright infringement; the Ninth Circuit held that this was not an abuse of discretion because the copyright damages were assessed based on Trendily’s retrospective gross profits from the infringement—the amount of money Trendily made off the infringing pieces—whereas the trade dress damages were assessed based on JSC’s prospective lost profits—the amount of money JSC would have made but for the trademark infringement.

            Additionally, § 1117(a) “confers a wide scope of discretion upon the district judge in fashioning a remedy.” Skydive, 673 F.3d at 1113 (quoting Maier Brewing Co. v. Fleischmann Distilling Corp., 390 F.2d 117, 121 (9th Cir. 1968)). . . . This is because “it is essential that trial courts carefully fashion remedies which will take all the economic incentive out of trademark infringement.” Playboy Enterprises, Inc. v. Baccarat Clothing Co., Inc., 692 F.2d 1272, 1275 (9th Cir. 1982). For instance, we have held that a court may grant “a just monetary award” under § 1117 even where a plaintiff cannot prove actual damages, “so long as it constitutes compensation for the plaintiff’s losses or the defendant’s unjust enrichment and is not simply a penalty for the defendant’s conduct.” Southland Sod, 108 F.3d at 1146 (internal quotation marks and citation omitted); see also Restatement (Third) of Unfair Competition § 36, comment h (1995) (a defendant may be held liable “even for unanticipated consequences of its wrongful conduct”). And while a court may not impose a penalty, “[w]hen the defendant intentionally seeks to confuse or deceive,” as was the case here, “the court may accept less certain proof of loss in order to discourage similar behavior in the future.” Restatement (Third) Unfair Competition § 36, comment j (1995).

Citing Earthquake Sound Corp. v. Bumper Indus., 352 F.3d 1210, 1216–17 (9th Cir. 2003) (collecting cases), the Ninth Circuit also held that the district court did not abuse its discretion in awarding attorneys’ fees because “such willful and brazen infringement, paired with the strength of JSC’s trade dress claim, constitutes an exceptional case.”

 

The attorneys at Thomas P. Howard, LLC litigate trademark cases nationwide including in Colorado.