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Blue Martini Founders, LLC v. Sadle Enterprises, Inc.

United States District Court, D. Nebraska

July 25, 2016

BLUE MARTINI FOUNDERS, LLC, Plaintiff,
v.
SADLE ENTERPRISES, INC., a Nebraska corporation doing business as Blue Martini Lounge, Defendant.

          MEMORANDUM AND ORDER

          JOHN M. GERRARD, UNITED STATES DISTRICT JUDGE

         This matter is before the Court on the motion for default judgment (filing 16) filed by the plaintiff, Blue Martini Founders, LLC, with respect to the only remaining defendant, Sadle Enterprises, Inc.[1] The Court will grant the motion, [2] enjoin Sadle from using Blue Martini's marks, and award damages and attorney fees in the amount of $33, 197.24.

         The Court's Memorandum and Order of November 6, 2015, set forth the Court's findings that the admitted allegations of Blue Martini's complaint constitute a legitimate cause of action for both mark infringement and unfair competition under the Lanham Act, 15 U.S.C. § 1051 et seq., and violation of the Nebraska Uniform Deceptive Trade Practices Act (UDTPA). Filing 19 at 2-3. The Court's Memorandum and Order also set forth the Court's finding that Blue Martini was entitled to a permanent injunction, to be entered at final judgment. Filing 19 at 4. The only pending issues that were unresolved by the Court's Memorandum and Order were damages and attorney fees. See filing 19 at 7-8.

         Damages

         The Lanham Act permits a plaintiff to recover the defendant's profits, any damages sustained by the plaintiff, and the costs of the action. 15 U.S.C. § 1117(a). But in a case involving the use of a counterfeit mark, a plaintiff may instead elect to recover

an award of statutory damages for any such use in connection with the sale, offering for sale, or distribution of goods or services in the amount of--
(1) not less than $1, 000 or more than $200, 000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed, as the court considers just; or
(2) if the court finds that the use of the counterfeit mark was willful, not more than $2, 000, 000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed, as the court considers just.

§ 1117(c). Blue Martini has made such an election in this case.

         Blue Martini has moved for an award of $1, 000, 000.00. Filing 16 at 2; filing 21 at 3. As the Court outlined in its previous memorandum and order, § 1117(c) itself does not provide guidelines for the Court in determining an appropriate award, instead leaving it to the Court's discretion to award an amount it "considers just." Filing 19 at 5 (collecting cases). The Court must exercise discretion in examining whatever facts and considerations are available in a setting of limited information. Filing 19 at 5. The plaintiff, however, should not secure a windfall. Filing 19 at 5. And, analogizing to the similarly worded statutory damages provision of the Copyright Act, 17 U.S.C. § 504(c), the Court considers

(1) the defendant's expenses saved and profits reaped; (2) the plaintiff's lost revenue; (3) the value of the trademark; (4) general deterrence; (5) the willfulness of the defendant's conduct; (6) the defendant's cooperation in providing records from which to determine the value of the infringing products; and (7) specific deterrence of the defendant.

Filing 19 at 5-6.

         As the Court has previously noted, Sadle's conduct is clearly willful: Sadle was notified by Blue Martini to cease and desist using its marks and failed to do so, and willfulness may also be inferred from a failure to defend.[3]Filing 19 at 6. And Blue Martini has, at the Court's request, provided additional information pertaining to some of the other relevant factors. See filing 22-2. Specifically, Blue Martini has submitted evidence regarding the value of its marks, as represented by the franchise fees and gross revenues generated in association with the use of its marks. Filing 22-2. That evidence shows Blue Martini to be a lucrative franchise, whose locations are doing very well and whose marks are undoubtedly valuable. Filing 22-2.

         The Court appreciates the effort made by Blue Martini to provide the Court with some frame of reference for an appropriate assessment of statutory damages. But what remains problematic for the Court is that there is no reason to believe-and substantial reason to doubt-that Sadle actually profited from, or that Blue Martini lost revenue from, Sadle's infringement of Blue Martini's marks. That is to say, the Court sees no reason to believe that anyone could or did associate Sadle's midtown Omaha strip-mall establishment with Blue Martini's chain of upscale nightclubs located primarily (although not exclusively) in Florida. And the Court's overarching obligation to award ...


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