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Ninth Circuit Finds Infringement Not Willful, Refuses Award of Profits

HydraMedia Corp. appealed the Central District of California’s finding that Hydra Media Group Inc.’s trademark infringement was not willful.

On Aug. 12, the Ninth Circuit affirmed.

The way the Ninth Circuit tells the story, it’s pretty clear-cut.

“Defendant initially adopted the contested mark, HYDRAMEDIA, before it knew that Plaintiff even existed. When Defendant discovered Plaintiff’s use of a similar mark, it relied on in-house counsel’s opinion that there was little likelihood of confusion based on the companies’ distinct services. Defendant enjoyed a strong reputation and there was no evidence that it sought to mislead consumers or usurp any goodwill associated with Plaintiff’s mark. Under such circumstances, Defendant’s infringement was not willful.”

The Ninth Circuit also affirmed the district court’s refusal to award an accounting of defendant’s profits, which also makes sense given its finding that the infringement was not willful.

“Our decisions regarding an award of profits emphasize the importance of willfulness in the analysis. ‘Indeed, this court has cautioned that an accounting is proper only where the defendant is attempting to gain the value of an established name of another.’ Defendant was not trading off Plaintiff’s name. Defendant’s infringement was not willful. The district court did not abuse its discretion by denying Plaintiff’s motion for an award of profits.”

The case cite is HydraMedia Corp. v. Hydra Media Group Inc., 2010 WL 3190611, Nos. 09-55237, 09-56047, and 09-56050 (9th Cir. Aug. 12, 2010).

Posted on August 24, 2010 by Registered CommenterMichael Atkins | Comments1 Comment

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Reader Comments (1)

Very interesting emphasis on "willfulness" as the central concept. Although the ruling is not meant to be precedent, it does serve as a cautionary tale to plaintiffs. I assume the damages expert did not find support for a "Lost Profits" analysis given the disparate businesses, and I wonder if an analysis of a reasonable royalty would have been justified in light of the grounds for the injunction; if the P's rights to the mark extend beyond their market, enough to warrant the injunction, wouldn't a RR quantify the economic damage due to the use of the mark?
August 25, 2010 | Unregistered CommenterFernando Torres, MSc

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