Skydive Arizona v. Quattrocchi

A district court, in its discretion, can enter judgment for any sum above the amount found as actual damages, not exceeding three times such amount, however, such sum shall constitute compensation and not a penalty.

Skyride, an Internet and telephone-based advertising service, making skydiving arrangements for customers, and issuing certificates that can be redeemed at various drop zones around the country, was sued by Skydive Arizona, owner of a large skydiving center, for false advertising, trademark infringement and cybersquatting. A jury awarded Skydive Arizona $1 million in actual damages for false advertising, $2.5 million in actual damages for trademark infringement, $2,500,004 in profit resulting from the trademark infringement, and $600,000 for statutory cybersquatting damages. In denying Skyride's motions to reduce the damages award, the district court doubled Skydive Arizona's $1 million actual damages award for false advertising and $2.5 million award for trademark infringement, plus attorney fees and a permanent injunction against Skyride's operations in Arizona. Skyride appealed the decision of the district court, and Skydive Arizona cross-appeals the injunction, seeking a nationwide injunction against Skyride. Under 15 U.S.C. § 1117(a), a judge or jury may award damages up to triple the amount of lost profits, actual damages and costs to compensate a mark holder, however, such cannot be an award of damages to punish an infringer. The Ninth Circuit held that the district court abused its discretion in enhancing Skydive Arizona's actual damages to punish Skyride. The Ninth Circuit reversed with regard to the district court's doubling of actual damages, and reinstated the jury's original actual damages of $1 million for false advertising, and $2.5 million for trademark infringement. Additionally, the Ninth Circuit affirmed the district court on all other claims. AFFIRMED IN PART and MODIFIED IN PART.