Fishman Transducers, Inc. v. Paul

When parties are not in direct competition, evidence linking a loss in profits to the trademark infringement is required.

Opinion (Boudin): Fishman Transducers (Fishman) produces guitar pickups. Stephen Paul (Paul) sells guitars through the Home Shopping Network (HSN). Paul’s guitars are produced by a company named Force. In 2006, Force substituted the pickup used in its guitars, and erroneously informed Paul that the new pickups were Fishman pickups. Paul appeared on HSN claiming that his guitars contained Fishman pickups. Fishman contacted HSN to demand that Paul cease using the Fishman name. HSN and Paul complied, but Fishman still filed suit claiming trademark infringement. The district court refused to admit Fishman’s key evidence showing damages resulting from the infringement, and refused to force HSN to disgorge profits because the jury had found that the infringement was not willful. Fishman appealed. On appeal, the Circuit court ruled that: (1) although the district court’s failed inform the jury that “objective recklessness” was also a basis for a finding of willfulness, the findings of the jury should not be overturned because no reasonable jury could find that HSN’s infringement had been willful; (2) the First Circuit requires a finding of willfulness to award more than single damages or profit disgorgement; and (3) due in part to the fact that Fishman and Paul are not in direct competition, the evidence had failed to show how the infringement had diverted profits from Fishman, thus giving the jury no basis for determining a damages award. Therefore, although all parties admitted trademark infringement took place, no damages were awarded and the district court’s ruling was AFFIRMED.