Court Finds Trademark and Trade Dress Infringement; Awards Treble Damages and Attorneys' Fees

In a January 6, 2014 ruling, Judge Harold Baer, Jr. entered judgment in favor of the plaintiffs after a four-day bench trial on the plaintiffs’ trademark and trade dress infringement claim over plaintiff Audemars Piguet Holding S.A.’s well-known octagonal watch design.  The plaintiffs contended that two models of the defendants’ watches infringed their trademarks and trade dress in their “Red Oak” line of watches.  In finding in favor of the plaintiffs, Judge Baer found that “the similarities between these watches remain striking.”

In considering the trade dress claim, the Court wrote that a “plaintiff asserting product design trade dress infringement must prove distinctiveness by showing that ‘“in the minds of the public, the primary significance of [the mark] is to identify the source of the product rather than the product itself” (what is known as ‘acquired distinctiveness’ or ‘secondary meaning’).’”  Judge Baer added that to “determine whether a secondary meaning has attached, the court considers six factors:  ‘(1) advertising expenditures, (2) consumer studies linking the mark to a source, (3) unsolicited media coverage of the product, (4) sales success, (5) attempts to plagiarize the mark, and (6) length and exclusivity of the mark’s use.’”  The Court considered each factor in turn, and found that all but one of them favored the plaintiffs.

Having found that the plaintiffs’ trade dress has secondary meaning, the Court conducted a similar analysis to determine whether there was a likelihood of confusion between the plaintiffs’ and the defendants’ watches, using the well-known eight factor Polaroid test.  Finding that four of the factors favored the plaintiffs, the Court concluded that the defendants’ “use of the allegedly infringing designs is likely to cause customer confusion.”

Court Enhances Damages But Declines to Award Fees in Patent Infringement Action

In a December 18, 2013 ruling, Judge Samuel Conti denied the defendants’ motion for a new trial or for judgment as a matter of law following a jury verdict of patent infringement against them, and granted in part the plaintiff’s motion for enhanced damages and attorneys’ fees (in light of the jury’s finding of willful infringement) and for a permanent injunction.

With respect to the new trial motion, Judge Conti rejected the two individual defendants’ challenge to a jury instruction that they contended improperly allowed the jury to impute infringement to them in their individual capacities.  Since the jury found that the individuals are general partners in a partnership that was also found liable for infringement, the individuals could be held liable under general partnership law, mooting the issue about the jury instruction.  The Court also rejected the defendants’ contention that the plaintiff’s expert’s use of demonstrative exhibits that were not disclosed as part of the expert report warranted a new trial, noting that the exhibits merely illustrated points that were included in the report, and the exhibits were not admitted into evidence. 

Judge Conti analyzed the request for enhanced damages under the nine factors set out in Read Corp. v. Portec, Inc., 970 F.2d 816, 826 (Fed. Cir. 1992).  The Court found that the first three factors – whether the infringer deliberately copied the ideas or design of another, whether the infringer acted with knowledge of the patent and formed a good faith belief of non-infringement or invalidity, and whether the infringer engaged in litigation misconduct – all strongly favored the enhancement of damages.  Judge Conti found that the remaining factors did not mitigate against enhancing damages, and accordingly trebled the jury’s $300,000 damages award.  The Court declined to award attorneys’ fees, though, finding that the defendants’ conduct was not egregious, and that “some of the positions advanced at trial by Defendants had merit.”  In a later January 8, 2014 ruling, Judge Conti awarded prejudgment interest at the prime rate (3.25%), rejecting the plaintiff's request to use the 9% rate specified in the New York CPLR.  The Court awarded prejudgment interest only on the $300,000 damages award, not on the enhanced. amount.