Finding of willful infringement still doesn’t merit injunction under Herb Reed

A.C.T. Prods., Inc. v. W.S. Indus., Inc., No. 16-0476, 2017
WL 4708152 (C.D. Cal. Jul. 14, 2017)
Herb Reed strikes
again.  The jury found that defendant had
engaged in willful trademark infringement and false advertising, but also that
the four-year statute of limitations had run. The court found that there was
sufficient evidence before the jury to so hold, because of evidence that the
defendant was infringing before the limitations period by being willfully blind
to infringement: it was aware that it was buying the products at issue from a
manufacturer that did not own the mark.
The plaintiff argued that the jury’s findings were
irreconcilably inconsistent, but that wasn’t the case. It was possible to
reconcile the jury’s conclusion as to liability with the factual finding
establishing the affirmative defense because there was evidence that willful
infringement and advertising occurred only from 2010 to 2011.  Once the jury found that the plaintiff knew
before the relevant timeframe, the court could conform the determination of
liability to the factual finding.

In addition, a permanent injunction was unwarranted, because
the plaintiff didn’t show irreparable injury. 
 The plaintiff argued that the
infringement (1) damaged its reputation and goodwill because its witness
testified during trial that its customers called to complain about the
defendant’s inferior goods that they thought were manufactured by the plaintiff;
and (2) caused the loss of business opportunities because the parties
competed.  Economic injury won’t suffice
to show irreparable harm, but intangible injury like loss of customers or
damage to a party’s goodwill can do so, as can lost control over a
business.  Here, the allegations of harm
to business, goodwill, and reputation were in the past tense, and there was no
evidence of continued infringement or an inclination to restart, nor any
evidence of continuing customer complaints, making continuing reputational harm
speculative. The jury’s finding of the affirmative defense of statute of
limitations also weighed against an injunction. 

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