New Certainty in an Area of Uncertainty

3 Apr

On November 22, 2006, Louis Vuitton Malletier S.A. sued the defendants, Ly USA, Inc., CoCo USA Inc., Marco Leather Goods Ltd., Chong Lam and Joyce Chan in the United Stated District Court in the Southern District of New York for importing and selling counterfeit luxury goods bearing infringing versions of Louis Vuitton’s trademarks. Vuitton asserted various trademark claims under Sections 32 and 43 of the Lanham Act and various state law related claims. Vuitton moved for summary judgement on all claims and the court granted summary judgement on the trademark counterfeiting and infringement claims. After the grant of summary judgement, Vuitton elected to receive statutory damages and additionally sought attorneys’ fees, which lead to the appeal and the question – was Vuitton entitled to the award of attorneys’ fees after electing statutory damages over actual damages?

The US Court of Appeals for the Second Circuit considered whether a plaintiff in a civil trademark counterfeiting action who elects statutory damages instead of actual damages may recover reasonable attorneys’ fees? Section 35 of the Lanham act permits a plaintiff in a counterfeiting action to seek either actual damages or statutory damages, but not both, and provides for the award of reasonable attorneys’ fees in exceptional cases in Section (a). Section (c) falls silent on the issue of attorneys’ fees. After interpreting the language of Sections 35 (a) and 35 (c) and the legislative history of Section 35 (c), the court concluded that the attorneys’ fees in this case was appropriate because the defendant’s conduct was willful as it involved fraud and bad faith.

Those trademark counterfeiting plaintiffs who elect statutory damages over actual damages in the Second Circuit now have assurance that they are not forfeiting their ability to recover attorneys’ fees in exceptional cases.

To read a case summary of the opinion of the Second Circuit, click here.

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