USCA Ninth Circuit, February 25, 2009 (not for publication)

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In a copyright infringement suit involving watch and belt designs, a jury verdict, an award of maximum statutory damages, and a new trial, the Ninth Circuit summarily addressed several issues relating to damages.

The court held that the district court did not abuse its discretion by denying the defendant’s motion for a new trial on the plaintiff’s watch design infringement claim. A district court has broad discretion to award a plaintiff up to $150,000 in statutory damages for each instance in which a defendant “willfully” infringed the plaintiff’s copyright. In this case, the evidence established that the defendant continued to sell infringing watches after receiving notice of the plaintiff’s lawsuit. The court rejected the defendant’s argument that its infringement of the plaintiff’s copyrights was not willful because the plaintiff’s notice failed to identify with specificity the copyrights that the defendant’s watches allegedly infringed. According to the Ninth Circuit, “[t]he Copyright Act imposes no such duty on [plaintiff] Leegin.”

The Ninth Circuit also rejected the defendant’s argument that the district court erred in imposing the maximum statutory damages. The defendant did not point to any basis for concluding that such an award was an abuse of discretion, and “it is well established that statutory damages may be imposed for both punitive and compensatory purposes.”

The Ninth Circuit held that the district court did not err by entering judgment in favor of the defendant on the plaintiff’s belt-design infringement claims, but the court did allow the plaintiff to challenge the district court’s prior rulings on actual damages because the plaintiff’s stipulation to entry of judgment “was not a voluntary dismissal of its belt-infringement claims, only a dismissal of its claim for defendant’s wrongful profits as a result of the belt-design infringement.”

The Ninth Circuit held that the district court did not err in granting the defendant’s motion for a new trial and subsequently granting the defendant’s motion for summary judgment on the issue of actual damages for the plaintiff’s belt-design infringement claims. The plaintiff failed to present sufficient evidence of actual damages to create a genuine issue of material fact that could survive summary judgment; furthermore, none of the evidence adduced at trial established a causal connection between the defendant’s infringement and any lost goodwill or lost sale by the plaintiff. “Although Leegin presented evidence that Nadim sold infringing products, no testimony or other evidence supported Leegin’s argument that a purchaser of such infringing products would have bought Leegin’s products had the infringing versions not been available. In the context of determining damages under § 504(b), ‘mere speculation does not suffice to link the losses to the infringement.’” (citing Polar Bear Prods., Inc. v. Timex Corp., 384 F.3d 700 (9th Cir. 2004)).

The Ninth Circuit also concluded that the district court did not abuse its discretion in granting the defendant’s motion for a new trial, even though the district court based its ruling on the erroneous ground that no evidence supported the jury’s $245,275 award for wrongful profits. According to the Ninth Circuit, it is well established that the decision of a lower court must be affirmed if the result is correct although the lower court relied upon a wrong ground or gave a wrong reason. The Ninth Circuit reasoned that “[n]either the Supreme Court, nor any decision of our court, has suggested this long-standing rule is inapplicable to a district court’s grant of a motion for a new trial.”

The Ninth Circuit vacated the district court’s denial of both parties’ motions for attorneys’ fees and costs because it did not provide any reasons for its decision and instructed the district court to provide a reasoned order on these motions.