Fishman Transducers, Inc. v. Paul

684 F.3d 187, 2012 WL 2542879
CourtCourt of Appeals for the First Circuit
DecidedJuly 3, 2012
Docket11-1663
StatusPublished
Cited by36 cases

This text of 684 F.3d 187 (Fishman Transducers, Inc. v. Paul) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fishman Transducers, Inc. v. Paul, 684 F.3d 187, 2012 WL 2542879 (1st Cir. 2012).

Opinion

BOUDIN, Circuit Judge.

This appeal concerns claims by Fishman Transducers, Inc. (“Fishman”), primarily for trademark infringement and false advertising under the Lanham Act, 15 U.S.C. § 1051 et seq. (2006), against HSN Interactive LLC (“HSN”), musician Stephen Paul and his company Daystar Productions. Fishman failed to get the relief it sought in the district court and now appeals. We refer to the Lanham Act throughout by its Title 15 section numbers rather than the sections in the original statute.

Fishman is a developer and manufacturer of electronic equipment, specifically a highly-regarded line of acoustic equipment that can be attached to individual musical instruments to provide sound amplification. Fishman guitar “pickups” often include both a transducer and a preamplifier or equalizer, although the term can also refer to only the transducer. The Fish-man transducer is a small device usually installed inside the guitar where it is not immediately visible.

HSN is a retailer of various consumer goods and sells products on its website; its sister company sells products on the television channel Home Shopping Network; for purposes of this case the two entities were treated as one. In late 2006, HSN sold through the website and television station about 70,000 “Esteban” guitars that it identified in the programming and website- — -inaccurately, it now concedes — as containing Fishman pickups. This trademark violation is the centerpiece of the litigation that led to this appeal.

Esteban is the performance name used by musician Stephen Paul who, with his company Daystar Productions, has collaborated with HSN since 2001 to market and sell Esteban guitar packages (usually a guitar equipped with a pickup as well as accessories such as a strap, case, amplifier and instructional videos). Beginning in October 2006 on the HSN channel, Paul lauded Fishman pickups, emphasized that the guitars included them and boasted that a Fishman pickup alone would sell for as much as the full HSN package. Beginning in the second quarter of 2006, the HSN website simply listed a Fishman pickup as a specification of the guitars.

Several months after the television advertising began, Fishman contacted HSN and Daystar and demanded an end to claims in the broadcasts and on the website that the guitars contained Fishman pickups. HSN complied and ceased to make reference to Fishman pickups in its sales pitches and on its website. Fishman also brought suit in the district court, stating claims against HSN, Paul and Daystar under the Lanham Act for trademark violation and false advertising, the Massachu *190 setts Consumer Protection Act, Mass. Gen. L. ch. 93A, and state common law trademark infringement and unfair competition.

After extensive discovery and shortly before trial, the district court dismissed Fishman’s chapter 93A claim, denied its request to present evidence of “trademark counterfeiting,” 15 U.S.C. § 1114, and ruled that the parties were not in “direct competition” (the latter relevant to damages under the Lanham Act). Fishman Transducers, Inc. v. Paul, No. 07-cv-10071 (D.Mass. Mar. 7, 2011). During the trial, the district court ruled inadmissible key damage evidence proffered by Fish-man, but left open evidence of disgorgement of profits for a separate hearing before the judge, 15 U.S.C. § 1117(a).

During the eight-day trial, defendants did not seriously deny infringing the Fish-man trademark and falsely advertising the guitars as containing Fishman pickups; much of the extensive testimony and argument focused on whether the defendants’ violations were willful. The evidence showed that the guitars in question had been manufactured for HSN in China by Force Limited (“Force”), which had previously made Esteban guitars for HSN using pickups supplied by a company named Belcat.

Then, in 2006, Force substituted another Belcat pickup that Belcat told Force was a Fishman or “Fishman-type” pickup; Force then advised HSN that the guitars contained Fishman pickups and so identified the pickups in the specifications; HSN passed on the information to Paul. Whether or not Fishman made the new Belcat pickup or supplied technology for it, 1 defendants now concede that the HSN advertising and sales in question used the Fish-man trademark without authorization.

At the close of trial, the jury found trademark infringement and false advertising in violation of the Lanham Act; but the jury also found that neither violation was “willful.” In a post-trial decision, Fishman Transducers, Inc. v. Paul, No. 07-10071, 2011 WL 1157529 (D.Mass. Mar. 29, 2011), the judge agreed that willfulness had not been shown, adding that the jury’s finding would bind him anyway. Because the violations were not willful, and separately because of conventional equitable balancing, he chose not to order disgorgement of profits. Id.

Fishman has now appealed. The applicable standard of review varies with the issue and whether the claim was properly preserved. Fishman’s appeal is directed primarily to its claims under the Lanham Act. Section 1125 of the Act creates federal causes of action both for misuse of a trademark and false advertising that misrepresents the source of goods; section 1117 permits trebling of a damage award, a recovery of defendant’s profits, and an award of attorney’s fees in “exceptional” cases. 15 U.S.C. §§ 1117(a), 1125(a). 2

Fishman’s first claim is that the district court mishandled the central issue *191 of willfulness, both in its instructions and in responding to two jury questions. Interestingly, the term “willful” appears in section 1117 only in relation to two provisions not of immediate importance here— one relating to dilution claims (section 1125(c)) and another with counterfeit marks (section 1116(d)), 15 U.S.C. § 1117(a), (c)(2) — and similarly in section 1125 only in relation to dilution of a famous mark and domain name registration, 15 U.S.C. § 1125(c)(5)(B), (d)(2)(D)®.

Rather, the governing language provides:

The court shall assess such profits and damages or cause the same to be assessed under its direction. In assessing profits the plaintiff shall be required to prove defendant’s sales only; defendant must prove all elements of cost or deduction claimed. In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances of the case.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Lontex Corp v. Nike Inc
107 F.4th 139 (Third Circuit, 2024)
Smartling, Inc. v. Skawa Innovation Ltd.
358 F. Supp. 3d 124 (District of Columbia, 2019)

Cite This Page — Counsel Stack

Bluebook (online)
684 F.3d 187, 2012 WL 2542879, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fishman-transducers-inc-v-paul-ca1-2012.