Louis Vuitton S.A. v. Pun Yang Lee

875 F.2d 584
CourtCourt of Appeals for the Seventh Circuit
DecidedMay 16, 1989
DocketNo. 88-2835
StatusPublished
Cited by26 cases

This text of 875 F.2d 584 (Louis Vuitton S.A. v. Pun Yang Lee) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Louis Vuitton S.A. v. Pun Yang Lee, 875 F.2d 584 (7th Cir. 1989).

Opinions

POSNER, Circuit Judge.

Louis Yuitton S.A., the French manufacturer of swank luggage, handbags, and other merchandise, appeals the district court’s refusal to award it any damages for the infringement of its registered trademark by the defendants, Mr. and Mrs. Lee. [586]*586Korean immigrants, the Lees own a shop in Chicago that they call K-Econo Merchandise. The shop carries an eclectic, even ragtag, selection of merchandise ranging from gifts, toys, and electronic equipment to handbags and luggage. Mr. Lee speaks no English; Mrs. Lee speaks poor “shopkeepers’ English.” When the events giving rise to the suit occurred the Lees had been living in the United States for four years, had (it appears) been engaged in the retail trade for that entire time, and had been selling luggage and handbags from time to time since opening K-Econo eighteen months previously.

Concerned with the widespread sale of counterfeit Louis Vuitton goods in American cities, Vuitton’s counsel engaged an investigator, Melvin Weinberg. On May 29, 1985, accompanied by an employee of Gucci (a coplaintiff, Gucci did not appeal), Weinberg visited K-Econo and bought a counterfeit Louis Vuitton camera case for $37.80 — a fraction of the price of the genuine item — and paid for it with a Master-charge credit card. The Gucci employee bought a counterfeit Gucci camera case.

Vuitton and Gucci filed this suit on June 18, seeking treble the Lees’ profits from the sale of the counterfeit merchandise, a permanent injunction, and attorney's fees. See 15 U.S.C. §§ 1116, 1117(a), (b). Two days later, executing an ex parte order that the district judge had issued under 15 U.S. C. § 1116(d)(1)(A), the plaintiffs seized three articles of counterfeit Vuitton merchandise and three articles of counterfeit Gucci merchandise from the Lees’ store. At her deposition Mrs. Lee stated through an interpreter that customers had told her before the raid (indeed, before she sold the counterfeit camera case to Weinberg) that her Vuitton and Gucci merchandise was counterfeit. And at the opening of the trial on February 24, 1986, the parties submitted to the court a written stipulation (copied from the final pretrial order) that “with at least constructive notice of plaintiffs’ federal registration rights, defendants have knowingly and wilfully offered for sale, sold and distributed various types of luggage, handbags and accessories upon which are imprinted imitations and copies of plaintiffs’ registered trademarks. Plaintiffs have never authorized or consented in any way to the use by defendants of their registered trademarks.” Shortly before the trial the district judge had issued an uncontested permanent injunction to prevent the Lees from further infringing the plaintiffs’ trademarks, and the final pretrial order listed only a single issue for trial: “The parties dispute the amount of income generated by defendants as a result of the sale of counterfeit Vuitton and Gucci merchandise.” The order lists no witnesses to be called by the defendants, no exhibits to be presented by them at trial, no findings of fact or conclusions of law proposed by them.

At trial Weinberg testified that he had seen “approximately 40 Louis Vuitton counterfeit handbags and 35 Gucci counterfeit handbags.” Although Mrs. Lee had not signed her deposition, the parties had in the final pretrial order stipulated to its admissibility at trial; it was duly admitted and excerpts from it read to the judge, including the admission that she had known that the merchandise was counterfeit before she sold it. Testifying live at the trial, the Lees claimed they had bought only six fake Vuitton and six fake Gucci items, all from the back of the van of an itinerant Korean peddler, and had not known till the raid that the items were counterfeit. At the end of the trial the judge asked counsel for both sides whether “the statute requires the intentional sale of counterfeit [items].” When they agreed it did, he intoned: “The Court finds for the defendants.” He did not elaborate, nor did he ever enter findings of fact and conclusions of law, as required in a bench trial by Fed.R.Civ.P. 52(a).

The defendants appealed, and we vacated the district court’s judgment and sent the case back to the judge for compliance with Rule 52. See 813 F.2d 133 (7th Cir.1987). The judge took his time; it was not until August 19, 1988 — almost eighteen months after we vacated his original judgment and two and a half years after the bench trial had ended — that he entered findings of fact and conclusions of law. 692 F.Supp. 906 [587]*587(N.D.Ill.1988). Prefacing his discussion with the comment that this was an “unfortunate case,” id. at 907, the judge chose to credit Mrs. Lee’s testimony at trial that she hadn’t known before the raid that the items were counterfeit, rather than the contrary testimony (also admitted as evidence at the trial) in her deposition. The judge waved aside the stipulation that the Lees had knowingly and willfully sold counterfeit merchandise, remarking that maybe all the stipulation meant was that the Lees had knowingly sold the merchandise, as opposed to knowing it was counterfeit merchandise. Alternatively he deemed the final pretrial order, from which the stipulation had been drawn, to have been modified by the course of the trial because the plaintiffs had not objected to the Lees’ testifying contrary to the stipulation. The judge disbelieved Weinberg’s testimony and indeed opined that he had come perilously close to committing perjury. The way was now prepared for the judge’s conclusion (692 F.Supp. at 911-12):

Having determined that defendants did not “intentionally us[e] a mark or designation, knowing such mark or designation [was] a counterfeit mark,” § 1117(b), this court has concluded that, for reasons of equity, it should deny plaintiffs monetary relief under § 1117(a). Defendants, who speak little English, did not realize they were violating plaintiffs’ rights until they were so informed in June, 1985; once they knew, they immediately agreed to terminate their misconduct. Furthermore, out of the hundreds of items at K-Econo, only eight were shown to be counterfeits of Gucci and Vuitton.
In short, nothing in this case suggests that defendants were actively engaged in palming off counterfeit products as a substantial part of their business. There simply was no need for this case to have gone to trial on the issue of monetary relief. The permanent injunction sufficed to apprise defendants of their wrongdoing and ensure that they would not violate plaintiffs’ rights in the future. The trademark laws entitled plaintiffs to protect their merchandise, as they did and should, but this court need not, and

The master of sword and mace asks us to reverse and remand for a new trial on monetary relief before a different judge.

The district judge’s handling of this case has left much to be desired. He had no justification for entering judgment for the defendants without complying with Rule 52(a). He also had no justification for interpreting the stipulation to mean only that the defendants had knowingly sold the merchandise in question.

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875 F.2d 584, Counsel Stack Legal Research, https://law.counselstack.com/opinion/louis-vuitton-sa-v-pun-yang-lee-ca7-1989.