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Keywords

plaintiffdefendantdamagesappealwillcompensatory damagesexemplary damages

plaintiffdefendantdamagesequityappealhearingtestimonywillpatenttrademarksustainedcompensatory damagesexemplary damages

Related Cases

Caesars World, Inc. v. Venus Lounge, Inc., 520 F.2d 269, 186 U.S.P.Q. 497

Facts

The plaintiffs, Caesars World, Inc. and Desert Palace, Inc., filed a complaint against Venus Lounge, Inc. for infringing their registered service mark 'CAESARS PALACE'. The district court entered a default judgment against the defendant, enjoining further use of the mark and awarding $1,000 in damages. The defendant appealed, arguing that there was no evidentiary support for the damages awarded, while the plaintiffs contended that the damages were inadequate given the willful infringement.

On August 7, 1972 the plaintiffs filed a single-count complaint which alleges that plaintiff Desert Palace, Inc., is the owner and operator of a nationally famous establishment in Las Vegas, Nevada, providing hotel, restaurant, entertainment and casino services in which it uses the service mark and trade style CAESARS PALACE; that plaintiff Caesars World, Inc., which owns all the capital stock of Desert Palace, Inc. owns all of the service marks, trademarks, and tradenames used by Desert Palace, Inc: that in 1971 CAESARS PALACE was registered in the United States Patent Office on the Principal Register as a service mark for hotel and restaurant services in Class 100 and for night club entertainment services featuring music, dancing and comedy, and casino services in Class 107; that the good will associated with the service mark is worth in excess of $10,000; and that the defendant Venus Lounge, Inc. doing business in Cherry Hill, New Jersey, 'commenced to infringe upon plaintiffs' rights and unfairly compete with plaintiffs by adopting and using the mark and name CAESAR'S PALACE in connection with the operation of a night club or cabaret offering bar services and entertainment.'

Issue

Whether the district court's award of compensatory and exemplary damages under the Lanham Act was supported by sufficient evidence.

Rule

When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled, subject to the provisions of sections 1111 and 1114 of this title, and 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 profits the plaintiff shall be required to prove defendant's sales only; defendant must prove all elements of cost or deduction claimed. 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.

Analysis

The court found that the plaintiffs failed to provide any evidence of actual damages or profits resulting from the infringement. The defendant demonstrated a net loss during the relevant years, which negated any basis for the damages awarded. Since the plaintiffs did not substantiate their claims with evidence, the court concluded that the damages awarded were not justifiable under the Lanham Act.

At the hearing on damages the plaintiffs offered no proof whatsoever of any damages they sustained as a result of the infringement. Plaintiffs did introduce the testimony of Daniel Ragone. That testimony established the gross receipts of the defendant for 1971, 1972 and the first eight months of 1973. Defendant, aided by the court, cross-examined Ragone as to whether or not there was any income to the defendant in the periods in question. That examination disclosed that for each period there was a net loss after depreciation despite a normal gross profit on goods sold, and that the expenses were not out of line for the type of business. Thus, the defendant carried the burden of proving deductions from gross receipts.

Conclusion

The court reversed the judgment regarding damages, stating that no monetary award could be made under the Lanham Act due to the lack of evidence of actual damages.

The judgment appealed from will be reversed.

Who won?

The defendant, Venus Lounge, Inc., prevailed in the appeal regarding damages. The court determined that the plaintiffs did not provide sufficient evidence to support their claim for damages, and thus the award of $1,000 in compensatory damages was set aside. The court emphasized that without evidence of actual damages or profits, the plaintiffs could only seek injunctive relief.

The defendant, Venus Lounge, Inc., was the prevailing party in respect to damages, which was the issue on appeal. The court found that the plaintiffs had not provided any evidence of actual damages or profits, leading to the conclusion that the award of $1,000 in compensatory damages was without evidentiary support and must be set aside.

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