Addressing a trademark owner’s Rule 59(e) motion to amend the jury’s damage award, the US Court of Appeals for the Seventh Circuit held that the trademark owner was not entitled to an increased damages award after discovering that two of the defendants were not separate companies, but rather divisions of a third defendant. Barrington Music Products, Inc. v. Music & Arts Center, et al., Case No. 18-2945 (7th Cir. Mar. 26, 2019) (Bauer, J).

Barrington Music Products began using the VENTO trademark in connection with musical instruments in 2009, and in 2010 filed an application to register the mark. Guitar Center created a new brand of woodwind and brass instruments made by Eastman Music Company and started selling the instruments under the trademark VENTUS in 2011. In 2016, Barrington sued Guitar Center, Music & Arts Center and Woodwind & Brass as separate entities, as well as Eastman, for trademark infringement. At trial, the evidence established the following sales under the VENTUS marks:

Music & Arts: $4,906,292 Woodwind: $37,680 Guitar Center: $3,228

The jury found that only the sales by Guitar Center were infringing and awarded Barrington $3,228 in damages. Barrington filed a Rule 59(e) motion seeking an amendment to the award of damages after it learned that Music & Arts and Woodwind were divisions of Guitar Center. After the district court denied the motion, Barrington appealed. At the outset, the Seventh Circuit noted that Rule 59(e) motions are properly granted only if (1) the court committed a manifest error of law or fact, or (2) newly discovered evidence precluded entry of judgment. The Court further noted that a Rule 59(e) motion cannot be used by a party to “undo its own procedural failures” or to introduce new evidence that could or should have been presented at trial. The Court found that Barrington named Guitar Center, Music & Arts and Woodwind as separate defendants, an error that remained throughout the case, which resulted in a verdict form listing each defendant separately. As a result, the jury was asked to determine whether each named defendant infringed Barrington’s trademark and to list the amount of damages for each defendant. However, the jury determined that only Guitar Center’s sales were infringing, and Barrington provided no reason for the Court to conclude that the jury’s verdict would have been different if it had known that Music & Arts and Woodwind were divisions of Guitar Center. Accordingly, the Seventh Circuit affirmed the denial of Barrington’s motion.

Practice Note: Prior to filing, determine the relationship, if any, of all potential corporate defendants to ensure that the entities are properly named as defendants.