No Prejudgment Interest for Statutory Damages

“Prejudgment interest serves to compensate for the loss of use of money due as damages from the time the claim accrues until judgment is entered, thereby achieving full compensation for the injury those damages are intended to redress.” West Virginia v. United States, 479 U.S. 305, 310 n.2 (1987); see also City of Milwaukee v. Cement Div., Nat’l Gypsum Co., 515 U.S. 189, 195 n.7 (1995). “[I]n other words, to make the plaintiff whole as of the date of the injury.” Lakin v. Watkins Assoc. Indus., 6 Cal. 4th 644, 663 (1993).

In Y.Y.G.M. SA v. Redbubble, Inc., No. 21-56150, 2023 WL 4697350 (9th Cir. July 24, 2023), the Ninth Circuit held that prejudgment interest is not available for statutory damages for trademark counterfeiting under 15 U.S.C. § 1117(c).

Statutory damages differ meaningfully from actual damages: while actual damages only compensate the victim, statutory damages may compensate the victim, penalize the wrongdoer, deter future wrongdoing, or serve all those purposes. See Nintendo of Am., Inc. v. Dragon Pac. Int’l, 40 F.3d 1007, 1011 (9th Cir. 1994); Skydive Ariz., Inc. v. Quattrocchi, 673 F.3d 1105, 1114–15 (9th Cir. 2012) (reversing enhancement of actual damages because district court enhanced damages to punish rather than compensate).

            Allowing prejudgment interest on statutory damages may inflate them to amounts disproportionate to what Congress thought fit to remedy those harms. . . . Given the lack of textual authority and the potential to upset the balance Congress struck in setting the statutory amounts, we hold that prejudgment interest is not allowed under § 1117(c). Cf. Matter of Marshall, 970 F.2d 383, 385–86 (7th Cir. 1992) (“There is no reason to think that adding prejudgment interest improves upon the accuracy of [a statutory damages provision’s] rough guess [on the actual damages].”).

The Court also noted that the express allowance of prejudgment interest in 15 U.S.C. § 1117(b) for the intentional use of a counterfeit mark, further supported its conclusion.


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