Opting for Statutory Damages in a Counterfeiting Case May Prevent Your Client From Receiving Attorneys' Fees

Opting for Statutory Damages in a Counterfeiting Case May Prevent Your Client From Receiving Attorneys' Fees

After successful prosecution of a counterfeiting case, a plaintiff may choose between trebled actual damages and statutory damages. The Ninth Circuit has interpreted the Lanham Act damages provision (15 U.S.C. § 1117) to preclude an award of attorneys' fees under Section 1117(b) when the plaintiff chooses to pursue statutory damages in a counterfeiting case. In this commentary, Anne Gilson LaLonde discusses the statutory scheme, case law on the issue, and remaining options for receiving attorneys' fees under the statute:

 
     Sarah Bulat and Steven Dale Wandel sold decals on eBay. But these weren’t smiley face or kitty decals. Bulat and Wandel had created their own, unauthorized decals bearing the logo of K&N Engineering, a manufacturer and distributor of aftermarket automotive air filters and related products.
 
     K&N sued for infringement, counterfeiting, dilution and various state law causes of action. It requested statutory damages rather than actual damages, presumably because the amount of actual damages in the case was so small. The federal district court for the Central District of California granted summary judgment to K&N . . . [and] awarded K&N statutory damages of $20,000 under 15 U.S.C. § 1117(c)(1) and attorneys’ fees of $100,000 under 15 U.S.C. § 1117(b). K&N Engineering v. Bulat, No. CV04-09707 (C.D. Cal. 2006) (judgment on plaintiff’s motion for summary judgment).
 
     . . . [I]n a brief published opinion . . . the [Ninth Circuit] reversed the district court’s decision to award $100,000 in attorneys’ fees to the plaintiff.  K&N Engineering v. Bulat, 510 F.3d 1079 (9th Cir. 2007).
 
According to the author, the Ninth Circuit held that fees are not available under section 1117(c) because that section does not mention attorney fees explicitly. She goes on to explain that:
 
     In addition, the court found that the explicit provision of attorneys’ fees in Section 1117(b) does not authorize attorneys’ fees in conjunction with a statutory damage award, such as the one in this case, because the provision only relates to an award of treble actual damages. Therefore, because the plaintiff in this case had elected statutory damages under Section 1117(c), it could not request attorneys’ fees under Section 1117(b).
 

Subscribers can access the complete commentary on lexis.com. Additional fees may be incurred.


Non-subscribers may purchase the complete commentary on LexisNexis Store.