CHAPTER 10 - § 10.04

• Jurisdiction: United States

§ 10.04 RECOVERY OF PLAINTIFF'S ACTUAL DAMAGES

The Lanham Act also permits monetary recovery for "any damages sustained by the plaintiff."¹⁰⁸ Like all monetary damages available under the Lanham Act, plaintiff's damages are awarded on basis of equity. As a result, the six Pebble Beach factors discussed above apply equally in determining whether an award of plaintiff's damages is equitable and appropriate.

In order to recover for lost profits, a plaintiff must prove that the defendant's infringing activities directly caused the plaintiff to lose profits. This may be accomplished, for example, by first establishing a pre-infringement "base period," referred to as a "basis," and then using the profits earned during the basis to determine the amount of profit the plaintiff would have made during the period in which the defendant infringed the plaintiff's trade dress.¹⁰⁹ The plaintiff's lost profits would then be calculated by subtracting the amount of profit the plaintiff actually made during the infringement period from the amount of profit the plaintiff would have made (as calculated from profits earned during the basis). Alternatively, the plaintiff may establish its lost profits by multiplying its profit per item by the number of infringing items sold by the defendant.¹¹⁰

In addition, a plaintiff must show that it was damaged by actual consumer confusion or deception resulting from the acts of the defendant.¹¹¹ While the standard varies by circuit, direct evidence that one or more consumers have actually been confused is not strictly required.¹¹² Consumer confusion sufficient to grant monetary damages may be found in circumstantial sources such as consumer surveys and defendant's intent to confuse customers.¹¹³

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Notes:

^[108] Lanham Act § 35(a), 15 U.S.C. 1117(a).

^[109] MCCARTHY, supra chap. 1, note 2, at § 30:79, citing Borg-Warner Corp. v. York-Shipley, Inc., 293 F.2d 88 (7th Cir. 1961).

^[110] MCCARTHY, supra chap. 1, note 2, at § 30:79, citing Intel Corp. v. Terabyte Int'l, 6 F.3d 614 (9th Cir. 1993).

^[111] Australian Gold, Inc. v. Harfield, 436 F.3d 1228, 1241 (10th Cir. 2006).

^[112] MCCARTHY, supra chap. 1, note 2, at § 30:74; PPX Enterprises, Inc. v. Audiofidelity Enterprises, Inc., 818 F.2d 266 (2d Cir. 1987); Shen Mfg. Co. v. Suncrest Mills, Inc., 673 F. Supp. 1199 (S.D.N.Y. 1987).

^[113] Schutt Mfg. Co. v. Riddell, Inc., 673 F.2d 202 (7th Cir. 1982) (customer reliance may be proven by actual diversion of sales, surveys, or...