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Variety Stores, Inc. v. Wal-Mart Stores, Inc.

United States District Court, E.D. North Carolina, Western Division

April 18, 2017




         This cause comes before the Court on plaintiffs motion for a pretrial conference and trial setting. [DE 318]. The matter has been fully briefed and is ripe for disposition. For the reasons discussed below, plaintiffs motion is denied and final judgment is entered in this case.


         The Court incorporates by reference as if fully set forth herein the factual and procedural background included in its order granting partial summary judgment. [DE 149].

         On December 8, 2015, the Court granted Variety Stores, Inc.'s (hereinafter "Variety") partial summary judgment in its favor on its claim for trademark infringement and unfair competition under federal law and trademark infringement and unfair and deceptive practices under state law. [DE 149]. In its order, the Court found that Variety owns a protectable interest in the BACKYARD marks and that Wal-Mart Stores, Inc.'s (hereinafter Walmart) competing use created a likelihood of confusion. Id.

         Subsequently, Variety moved for a bench trial focused on an accounting and disgorgement of profits which is an equitable remedy not necessitating a jury trial. [DE 157]. The Court granted this motion, [DE 211], and an evidentiary bench trial on these issues was held on October 11 and 12, 2016. The Court, in a written order issued on November 22, 2016, found that Walmart's sales of infringing products during the relevant time period in the states where Variety and Walmart both operated totaled $395, 316, 314.71, that Walmart proved appropriate costs to be deducted in the amount of $362, 794, 643.31, and therefore found that profit in the amount of $32, 521, 671.40 could be attributed to sales of the infringing mark. [DE 316]. After considering several equitable factors the Court determined, in its discretion, that the profit figure derived above was a just award to plaintiff in these circumstances and ordered that Walmart disgorge the amount to Variety. Id.

         Then, on December 21, 2016, Variety filed the instant motion requesting that the Court set a date for a jury trial on the issue of damages, arguing that the Lanham Act allows it to recover damages in addition to an equitable disgorgement of profits and that it reserved its right to such a jury trial on damages. [DE 318]. Walmart responded in opposition, [DE 321], Varietyvfiled a reply, [DE 328], and the Court's written opinion now follows.


         In this action, Variety asserted claims against Walmart under the Lanham Act, 15 U.S.C. § 1114, 15 U.S.C. § 1125, North Carolina trademark law, N.C. Gen. Stat. § 80-11, at common law, and the North Carolina Unfair and Deceptive Trade Practices Act, N.C Gen. Stat. § 75-1.1 et seq. Following its order on plaintiffs motion for partial summary judgment, in which the Court found Walmart liable for trademark infringement, the Court made an equitable determination of recovery on behalf of the plaintiff. The Court must now consider whether, in addition to its equitable award, Variety is also entitled to a jury trial on actual damages.

         The Lanham Act states in relevant part:

When a violation of any right of the registrant of a mark . . . shall have been established ... the plaintiff shall be entitled .. . subject to the principles of equity, to recover (1) defendant's profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action. The court shall assess such profits and damages or cause the same to be assessed under its direction ... 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. Such sum in either of the above circumstances shall constitute compensation and not a penalty.

15 U.S.C. § 1117(a). In Synergistic Intern., LLC v. Korman, the Fourth Circuit set forth the following six factors for a court to weigh equitably when determining whether monetary relief under the Lanham Act, 15 U.S.C. § 1117(a), is appropriate, and if so, the amount thereof:

(1) whether the defendant had the intent to confuse or deceive; (2) whether sales have been diverted; (3) the adequacy of other remedies; (4) any unreasonable delay by the plaintiff in asserting his rights, (5) the public interest in making the misconduct unprofitable; and (6) and whether this is a case of palming off.

470 F.3d 162, 175-76 (4th Cir. 2006). A court may also consider other factors "that may be relevant in the circumstances, " id. at 176, and "the court has broad discretion to award any monetary relief necessary to serve the interests of justice." Shell Oil Co. v. CommercialPetroleum, ...

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