Summary
The Eleventh Circuit held that a trademark plaintiff seeking an accounting and disgorgement of the defendant's profits in lieu of actual damages is not entitled to a jury trial because that remedy is equitable in nature. The court also affirmed the district court's findings that the defendant's use of “hard candy” did not create a likelihood of confusion and was protected by the fair-use defense. The judgment was affirmed.
Topics
Practice areas
Questions Presented
- Whether a trademark plaintiff seeking an accounting and disgorgement of the defendant's profits in lieu of actual damages is entitled to a jury trial under the Seventh Amendment.
- Whether the district court clearly erred in finding no likelihood of confusion under the Eleventh Circuit's seven-factor test.
- Whether the district court clearly erred in finding that Anastasia's use of “hard candy” qualified for the fair use defense.
Holdings
- A plaintiff seeking an accounting and disgorgement of a defendant's profits for trademark infringement, without seeking actual damages or other legal relief, is seeking an equitable remedy and has no Seventh Amendment right to a jury trial.
- The district court did not clearly err in finding that Anastasia's use of “hard candy” did not create a likelihood of consumer confusion.
- The district court did not clearly err in finding that Anastasia used “hard candy” fairly: other than as a mark, in a descriptive sense, and in good faith.
Key quotations
“The remedy of an accounting and disgorgement of profits for trademark infringement is equitable in nature and has long been considered that way, so we hold that a plaintiff seeking the defendant’s profits in lieu of actual damages is not entitled to a jury trial.” (921 F.3d at 1345)
“All of this leads us to the conclusion that an accounting and disgorgement of a defendant’s profits in a trademark infringement case is equitable in nature and does not carry with it a right to a jury trial.” (921 F.3d at 1368)
“The historical evidence reveals that the particular remedy sought by Hard Candy -- an accounting and disgorgement of Anastasia’s profits as an alleged infringer -- is a creature of equity.” (921 F.3d at 1378)
Factual background
Hard Candy continuously used the HARD CANDY mark for cosmetics sold through Walmart and held multiple federal trademark registrations. Anastasia sold a limited-edition cosmetics palette containing a shade labeled “hard candy,” using the words on the back and inside of the package and in marketing materials. Hard Candy sent a cease-and-desist letter, then sued after Anastasia continued selling the product. Anastasia sold approximately 248,075 kits, generating more than $5 million in revenue, but Hard Candy presented no evidence of actual consumer confusion.
Procedural history
Hard Candy sued Anastasia in the Southern District of Florida for Lanham Act and common-law trademark infringement and unfair competition. Hard Candy sought an accounting and disgorgement of profits, injunctive and declaratory relief, damages, fees, and costs, but abandoned its claim for actual damages before trial. The district court struck the jury demand, conducted a bench trial, found no likelihood of confusion, alternatively found fair use, and entered judgment for Anastasia. The Eleventh Circuit affirmed.