United States District Court, E.D. Texas, Sherman Division
MEMORANDUM OPINION AND ORDER
L. MAZZANT, UNITED STATES DISTRICT JUDGE
before the Court is Defendant Younique, LLC's Motion to
Strike Plaintiff's Damage Claims and Jury Demand (Dkt.
#85). After reviewing the relevant pleadings and motion, the
Court finds the motion should be granted in part.
August 2016, Plaintiff Luci Bags, LLC applied for federal
trademark protection for tote bags. This application did not
mature to registration until April 26, 2016. From December
2015 through February 2016, Defendant participated in a
“Welcome Back” promotion. As a part of the
promotion, Defendant distributed Welcome Back Kits, which
included a Younique-branded tote bag. On June 7, 2016,
Plaintiff filed suit against Defendant for alleged violations
of 15 U.S.C. §§ 1114 and 1125(a), common law trade
dress infringement, and unfair competition (Dkt. #1).
October 11, 2017, Defendant filed its Motion to Strike
Plaintiff's Damage Claims and Jury Demand (Dkt. #85). On
October 18, 2017, the parties filed a Stipulation to Non-Jury
Trial (Dkt. #103). Plaintiff filed its response (Dkt. #104)
on October 25, 2017. Defendant filed its reply (Dkt. #109) on
November 1, 2017. Plaintiff filed its sur-reply (Dkt. #110)
on November 3, 2017.
argues that Plaintiff is not entitled to monetary relief
because Plaintiff did not abide by the notice requirements in
15 U.S.C. § 1111. Further, Defendant claims Plaintiff is
precluded from recovering punitive damages. The Court
addresses each argument in turn.
claims that Plaintiff is precluded from recovering monetary
relief because it did not comply with the notice requirements
in 15 U.S.C. § 1111. Plaintiff argues notice, as
required by § 1111, applies only to infringement that
occurs after registration, and since the relief Plaintiff
seeks relates to events prior to registration, § 1111 is
U.S.C. § 1125(a) “governs infringement of
unregistered marks.” Dwyer Instruments, Inc. v.
Sensocon, Inc., 873 F.Supp.2d 1015, 1027 (N.D. Ind.
2012) (citing Two Pesos, Inc. v. Taco Cabana, Inc.,
505 U.S. 763, 768 (1992)). 15 U.S.C. § 1117(a), states
that a violation under § 1125(a) entitles a plaintiff to
recover the defendant's profits, damages sustained by the
plaintiff, and costs of the action, subject to the provisions
of §§ 1111 and 1114. Section 1111 requires that in
order to recover profits or money damages in an infringement
suit, the trademark registrant must give “notice”
of registration. Notice is provided by “displaying with
the mark the words ‘Registered in U.S. Patent and
Trademark Office' or ‘Reg. U.S. Pat. & Tm.
Off.' or the letter R enclosed within a circle, thus
®.” 15 U.S.C. § 1111. However, when a
registrant fails to provide such notice of registration,
“no profits and no damages shall be recovered . . .
unless the defendant had actual notice of the
registration.” Id. Although § 1117
statutory damages for a violation of § 1125(a) are
“subject to” the notice requirements of §
1111, such requirements only apply to registered marks.
McCarthy on Trademarks & Unfair Competition
§ 19:144 (4th ed.). As a result, the § 1111 notice
requirement is “not a limitation on recovery of damages
under a [§ 1125(a)] count for infringement of an
unregistered mark.” Id. Stated differently,
§ 1111 notice applies to infringement of registered
marks (§ 1114), but is not a limitation of infringement
of an unregistered mark (§ 1125(a)).
Plaintiff seeks Defendant's profits from Defendant's
Welcome Back promotion that took place from December 2015 to
February 2016, before Plaintiff's application for
registration matured. As explained above, the notice
requirement in § 1111 applies to damages sought for the
infringement of registered marks. Although Plaintiff's
mark is now registered, at the time of the alleged
infringement, Plaintiff's mark was unregistered. As a
result, because the relief Plaintiff seeks involves alleged
infringement prior to the mark's registration, the §
1111 notice requirements do not apply.
argues that “[b]y expressly incorporating Section 1111
into Section 1117, the Lanham Act mandates that a registrant
relying on its registration cannot claim monetary damages
until it provides marks [of] trademark or gives actual notice
to the alleged infringer.” (Dkt. #85 at p. 7). In other
words, Defendant claims that since Plaintiff's mark is
now registered § 1111 applies, regardless of when the
alleged infringement occurred. In making this argument,
Defendant relies heavily on Coach, Inc. v. Asia Pac.
Trading Co., Inc., 676 F.Supp.2d 914 (C.D. Cal. 2009),
but such reliance is misplaced. In Coach, Plaintiffs
sued on a registered mark under both 15 U.S.C. § 1114
and § 1125(a). Coach, 676 F.Supp.2d at 918. The
court held that the “[p]laintiffs' recovery of
profits or damages under § 1125(a) [was] limited to the
period after which [the d]efendant had ‘actual
notice' of [the p]laintiffs' registration.
Id. at 925. Despite Defendant's reliance on the
holding in Coach, the Court finds the analysis in
Coach belies Defendant's contention.
making its ruling, the court in Coach cites to
McCarthy, which, in relevant part, states
“‘[b]ecause the [§ 1111] requirement of
notice only applies to registered marks, it is, of course,
not a limitation on recovery of damages under a [§
1125(a)] count for infringement of an unregistered
mark.'” Id. at 925 (alteration in
original) (quoting McCarthy, § 19:144).
Further, McCarthy discussed the difficult
“‘question [of] whether a registrant who proves
infringement under both [§ 1114(1)] (registered mark)
and [§ 1125(a)] (unregistered mark) can avoid the notice
limitation imposed by [§ 1111] by claiming all of its
damages fall under the [§ 1125(a)] count.'”
Id. (alteration in original) (quoting
McCarthy, § 19:144). In holding that
“‘a registrant cannot avoid the [§ 1111]
damage limitation by using [§ 1125(a)], '”
McCarthy simply stated the obvious, that a plaintiff
who sues on a registered mark cannot skirt the marking
requirement by relying solely on § 1125(a) for all of
its damages. Id. (alteration in original) (quoting
McCarthy, § 19:144). Further, the court in
Coach cites to GTFM, Inc. v. Solid Clothing,
Inc., 215 F.Supp.2d 273 (S.D.N.Y. 2002). GTFM
held that for any infringement occurring before the
mark's registration, plaintiff could recover profits and
damages under § 1125(a), but for infringement occurring
after registration, plaintiff needed to satisfy the notice
requirements of § 1111. GTFM, 215 F.Supp.2d at
306. As such, the holding in Coach precluded the
plaintiffs from avoiding the § 1111 notice requirements
by pleading § 1125(a) when evidence of infringement
prior to registration failed to exist. However, the court did
not, as Defendant argues it did, rule that § 1111 notice
applies to unregistered marks.
there is no evidence that Plaintiff attempted to recover all
of its relief under “§ 1125(a) or otherwise use
§ 1125(a) in an attempt to avoid the damage
limitation.” Dwyer, 873 F.Supp.2d at 1028.
Rather, Plaintiff asserts a “violation of §
1125(a) as the mechanism to recover for infringement that
occurred before” its application for registration
matured. Id. As such, the Court finds that Plaintiff
is eligible to recover damages under § 1125(a) for