Actual Profits Award Where No Causal Connection Between Diverted Sales and Infringement
In Mazelmints, Inc. v. It’s a Wrap, LLC, et al., Case No. 1:10cv1117 (July 20, 2011), found here, Judge Liam O’Grady found against Defendant for infringing Plaintiff’s trademarks but held that the Plaintiff’s inability to prove that it was entitled to earn damages greater than the actual profits that Defendants earned from the infringing use of the marks resulted in a damages award of only $670.42.
Plaintiff owned two marks – Engagemints and Anouncemint – which it used to sell novelty metal tins of mint candy. In late 2008, Defendants began selling decorative mint tins under the name “Engage-Mints” on its website. Plaintiff sent Defendant a cease and desist letter demanding that Defendant remove any Engagemint and Announcemint marks from its website. Defendant complied, but its website management tool, which automatically generates metatags used by web search engines, would not permit Defendants to make any changes to the metadata on the website. At trial, Plaintiff was able to present evidence that Defendants’ failure to remove the references to Engagement marks from the metadata of the website caused that website to appear in a web search even after Defendants ceased offering the brand mints for sale on the site.
After its liability finding, the Court considered the damages award using the six factors in Synergistic Intern., LLC v. Korman, 470 F.3d 162, 176 (4th Cir. 2006). Importantly, because Defendant was able to prove that it sold only 1,161 Engage-Mint tins, the Court found that Defendant could not be responsible for Plaintiff’s alleged decrease in volume of 237,000 units. Finding no causal link between Plaintiff’s damages and the infringement, the Court limited damages to Defendants’ actual profits from the infringing use of the mark, concluding that any award greater than actual damages would constitute a penalty.
