Nearly a month after Judge Shira Scheindlin of the U.S. District Court in the Southern District of New York awarded $4.7 million in damages to Gucci for its trademark infringement suit against Guess Inc. and its licensees, she has changed her mind.
The judge issued an amended opinion and order late on Monday, reducing Marc Fisher’s liability in the suit to about $456,000, from about $2 million previously.
Simultaneously, the judge also redistributed some burden of damages to other Guess licensees — Swank Inc., Signal Products Inc. and Max Leather Group. Gucci will still be awarded $4.6 million in damages, a far cry from the $221 million it was seeking.
Marc Fisher Footwear’s lawyer, Darren Saunders of Manatt, Phelps & Phillips, told Footwear News, “We see this dramatic reduction as a victory because we thought the damages were inflated to begin with. We’re very happy the judge listened to what we had to say.”
In a statement, Marc Fisher said, “We are pleased with the judge’s decision to reduce the damages, although we are disappointed in the finding that any footwear infringed. Gucci clearly was overreaching, as reflected by the fact that more than 90 percent of Gucci’s claims were thrown out, leaving a minor dispute that could have been resolved years ago without litigation.”
The marks at issue in the lawsuit involved a total of five Gucci designs: the green-red-green stripe; the repeating GG Pattern, along with the Diamond Motif Trade Dress; the Stylized G; and the Script Gucci.
Judge Scheindlin wrote in her opinion, “Due to certain mathematical errors and oversights in identifying infringing styles, the court is revising its original opinion to adjust the damage award. However, the legal analysis is unchanged from the initial opinion and order.”
While the judge concluded that the defendants “intentionally and willfully copied [Gucci’s] Quattro G Pattern executed in brown/beige colorways from the Diamond Motif Trade Dress [and is therefore] entitled to an accounting of profits” that they made on the infringing SKUs, “Gucci has no evidence of, and hence can only speculate about, actual damages in the form of lost sales or harm to brand value. Accordingly, the only possible basis for recovery of actual damages is a reasonable royalty.”
The judge maintained her finding that Marc Fisher Footwear “acted in bad faith … because [it] made the conscious decision to continue shipping and selling shoes [with the offending marks] after it was directed to stop doing so.”
According to the revised calculations, Marc Fisher Footwear’s profit from sales of infringing products totaled $456,183, which it must pay to Gucci. This is because only seven men’s shoe models designed and manufactured by Fisher Footwear in 2008 bore the offending marks, instead of the more than 300 SKUs Gucci had initially cited in its suit, Saunders explained.
Saunders also dismissed the possibility of a loss of credibility on Marc Fisher Footwear’s part as a result of being party to this suit.
“It was Guess’ logo that they designed and handed down to its licensees, including Marc Fisher. It’s not like Marc Fisher went out and copied someone else,” he said.
Meanwhile, Signal must pay $1.8 million; Max Leather $24,700; and Swank $18,800. Guess itself must pay $2.3 million. In sum, Gucci is due to receive $4.6 million.
The judge also noted, “The conclusions of infringement and dilution made above give rise to a presumption that Gucci has suffered irreparable harm in that it has lost goodwill toward its unique brand, as well as the ability to control its reputation in the marketplace. Because these injuries cannot be quantified or fully remedied by a monetary award, I conclude that Gucci lacks an adequate remedy at law.”