Samara Bro's v. Wal-Mart Stores, Inc.

165 F.3d 120, 49 U.S.P.Q. 2d (BNA) 1260, 1998 U.S. App. LEXIS 32239
CourtCourt of Appeals for the Second Circuit
DecidedDecember 28, 1998
DocketDocket Nos. 97-7933(L), 97-9003(CON)
StatusPublished
Cited by39 cases

This text of 165 F.3d 120 (Samara Bro's v. Wal-Mart Stores, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Samara Bro's v. Wal-Mart Stores, Inc., 165 F.3d 120, 49 U.S.P.Q. 2d (BNA) 1260, 1998 U.S. App. LEXIS 32239 (2d Cir. 1998).

Opinions

PARKER, Circuit Judge:

Appellant Wal-Mart Stores, Inc. (“Wal-Mart”) appeals from a judgment of the United States District Court for the Southern District of New York (Denny Chin, Judge) entered July 17, 1997, after a jury trial, denying Wal-Mart’s Motion for Judgment as a Matter of Law on appellee Samara Brothers’ claims of violations of the Copyright Act, 17 U.S.C. § 101 et seq., section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and New York deceptive trade and unfair competition laws. Wal-Mart also seeks a new trial claiming that the district court erred in its jury instructions.

' I. BACKGROUND

Samara is a manufacturer of children’s clothing. The core of Samara’s business is its line of spring/summer seersucker children’s garments. Wal-Mart is a national chain of retail stores which sells a variety of items, including children’s clothes. In 1995, Wal-Mart contracted with Judy-Philippine, Inc. (“JPI”) to have JPI manufacture for Wal-Mart a large quantity of children’s seersucker garments to be offered for sale under Wal-Mart’s house label, “Small Steps,” in the 1996 spring/summer season. The samples on which the Wal-Mart buyers’ orders of JPI garments were based were actually Samara garments. In other words, the Wal-Mart paperwork preparatory for placing an order bears photographs of the garments being ordered, and in many of those photographs the name “Samara” is readily discernible on the hangtags and/or neck labels of the garments.

When JPI manufactured the clothes, it copied sixteen of Samara’s garments with some small modifications to produce the line of clothes required under its contract with Wal-Mart. Wal-Mart then sold these items in its stores under the “Small Steps” label. Samara holds copyright registrations on thir[123]*123teen of the sixteen garments copied. Sales of these items generated over $1.15 million in gross profits for Wal-Mart during the 1996 selling season.

In early June 1996, a buyer at J.C. Penney, one of a number of stores which sells Samara’s clothing under contract with Samara, called Samara’s offices to complain that she had seen Samara garments on sale at Wal-Mart for a retail price lower than J.C. Penney could charge under its contract with Samara. Samara advised the caller that it did not supply clothing to Wal-Mart. At that point, Samara representatives investigated the children’s clothes racks at Wal-Mart and other similar stores — K MART, Caldor, Hills and Goody’s — and determined that garments that appeared to be copies of Samara garments were being sold at each of the stores. Wal-Mart alone sold the JPI garments under its own house label. The other stores sold the garments under the JPI label, “Cutíes by Judy.”

After sending unsuccessful cease and desist letters, Samara brought suit against the stores and JPI asserting claims for copyright infringement, trade dress infringement, violations of the New York consumer fraud statute and the New York common law of unfair competition. Wal-Mart asserted cross-claims against JPI for indemnification. JPI and all of the defendant stores except Wal-Mart settled with Samara.

Samara’s claims against Wal-Mart proceeded to a week-long trial at the conclusion of which a jury found Wal-Mart liable on each of Samara’s four claims. The jury found that Wal-Mart had wilfully infringed Samara’s rights, awarding Samara $912,-856.77 on the copyright claims, $240,458.58 for the Lanham Act violation and $50 for the state law violations. Wal-Mart then moved for judgment as a matter of law and Samara moved for injunctive relief, enhancement of damages, an award of attorneys’ fees and prejudgment interest.

The district court denied Wal-Mart’s motion, choosing to address by opinion the trade dress claim which the court stated was the most difficult issue in the case. See Samara Brothers, Inc., v. Judy-Philippine, Inc., 969 F.Supp. 895 (S.D.N.Y.1997). The district court granted Samara’s request for injunc-tive relief, electing to draft its own injunction rather than accepting Samara’s proposed injunction. The district court awarded Samara attorneys’ fees of $275,000 and costs of $33,-196 based on the Lanham Act and pendent state law judgments but denied the motion for enhancement of damages and prejudgment interest.

II. DISCUSSION

On appeal, Wal-Mart asserts that the district court erred in the following four decisions: (1) failing to set aside the verdict on the Lanham Act claim; (2) refusing to give Wal-Mart’s requested jury instruction on labels in the clothes; (3) declining to find the state law claims preempted by the Copyright Act; and (4) rejecting the assertion that certain of Samara’s copyrights are invalid as a matter of law.

A. Standards ofRevieiv

With the exception of the jury instruction claim, all issues raised on appeal arise from the district court’s denial of WalMart’s Motion for Judgment as a Matter of Law. This Court reviews a district court’s denial of a Motion for Judgment as a Matter of Law “de novo and ... view[s] the evidence in a light most favorable to the non-movant, granting that party every reasonable inference that the jury might have drawn in its favor.” Schlaifer Nance & Co. v. Estate of Warhol, 119 F.3d 91, 98 (2d Cir.1997). This Court “will set aside a jury’s verdict and award judgment as a matter of law only when the evidence is such that, without weighing the credibility of the witnesses or otherwise considering the weight of the evidence, there can be but one conclusion as to the verdict that reasonable jurors could have reached.” Id. (quotation and citations omitted). Judgment as a matter of law “is reserved for those rare occasions when there is such a complete absence of evidence supporting the verdict that the jury’s finding could only have been the result o[f] sheer surmise and conjecture.” George Basch Co. v. Blue Coral, Inc., 968 F.2d 1532, 1536 (2d Cir.1992) [124]*124(alteration in original, quotation and citations omitted).

Wal-Mart argues on appeal that we should not strictly observe this standard of review because the “trend” in intellectual property law is to reserve issues similar to the protectability of a claimant’s trade dress as a task for the court, not a jury, to decide. For this proposition, Wal-Mart cites Markman v. Westview Instruments, Inc., 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). Without asking the Court to take the trade dress issue away from the jury, Wal-Mart seeks application by this Court of a lower level of deference for the jury’s verdict in light of the so-called “trend” created by Markman.

We find no such “trend” reflected in the case law nor do we find any law to support enforcement of a more rigorous review of a jury verdict in a trade dress case. The Court in Markman held only that judges, not juries, are charged with construction of a patent, that is, deciding what the “words in the [patent] claim mean.” Id. at 374, 116 S.Ct. 1384 (quotation and citation omitted). The Court specifically noted, however, that “there is no dispute that infringement cases today must be tried to a jury, as their predecessors were more than two centuries ago.” Id. at 377, 116 S.Ct. 1384.

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Bluebook (online)
165 F.3d 120, 49 U.S.P.Q. 2d (BNA) 1260, 1998 U.S. App. LEXIS 32239, Counsel Stack Legal Research, https://law.counselstack.com/opinion/samara-bros-v-wal-mart-stores-inc-ca2-1998.