U.S. Court of Appeals for the Eleventh Circuit, Hard Candy, LLC, v. Anastasia Beverly Hills, Inc., Docket No. 18-10877

Trademark Infringement

Remedy of an Accounting and Disgorgement of Profits

Remedies of Accounting, Constructive Trust, and Restitution

Injunctive Relief

Jury Trial

Seventh Amendment Right to Trial by Jury

Common Law

Equity

Monetary Damages Available to a Lanham Act Trademark Plaintiff

Fair Use Defense to Infringement

Likelihood of Confusion

Hard Candy filed a complaint in the United States District Court for the Southern District of Florida against Anastasia, claiming trademark infringement under § 32(a) of the Lanham Act, 15 U.S.C. § 1114(1); unfair competition under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); common law trademark infringement; and common law unfair competition. Hard Candy sought an accounting and the disgorgement of Anastasia’s profits, statutory damages, a permanent injunction barring Anastasia’s use of its mark, declaratory relief, and fees and costs. The complaint included a request for actual damages, but, notably, Hard Candy dropped this application before trial. The district court then struck Hard Candy’s jury trial demand because all of the remaining remedies were equitable in nature.

To prevail on each of its claims, Hard Candy had to establish that Anastasia’s use of the words “hard candy” created a likelihood of confusion. See Tally-Ho, Inc. v. Coast Cmty. Coll. Dist., 889 F.2d 1018, 1026 & n.14 (11th Cir. 1989) (noting that the elements of trademark infringement under common law and the Lanham Act “are the same,” and that “an unfair competition claim based only upon alleged trademark infringement is practically identical to an infringement claim”). Applying our seven-factor likelihood of confusion test, the district court determined that Hard Candy had not met its burden. The court also concluded that even if Hard Candy could establish infringement, Anastasia had made out a fair use defense because it used the term “hard candy” in good faith as a description of the product, not as a mark.

This appeal requires us to decide whether the Seventh Amendment right to trial by jury applies when a trademark plaintiff attempts to recover the profits the defendant made by selling the allegedly infringing goods.

A plaintiff is entitled to a jury trial in an action that is “analogous” to a claim that would have been brought in the English law courts at common law, but not if the claims sounded in equity or admiralty. See Tull v. United States, 481 U.S. 412, 417 (1987).

The remedy of an accounting and disgorgement of profits for trademark infringement is equitable in nature and has long been considered that way, so we hold that a plaintiff seeking the defendant’s profits in lieu of actual damages is not entitled to a jury trial.

(…) Injunctive relief is the quintessential form of equitable remedy; it does not entitle a plaintiff to a jury trial.

The monetary damages available to a Lanham Act trademark plaintiff can be divided into five rough categories: recovery of the defendant’s profits, actual business damages and out-of-pocket losses (like corrective advertising), lost profits, punitive damages, and attorneys’ fees.  “Actual damages” in this context covers everything from damages from lost sales or licensing fees due to the infringer’s sale of offending goods to intangible harm like reputational damage and loss of good will. As we have said, a trademark plaintiff “may recover for all elements of injury to the business of the trademark owner proximately resulting from the infringer’s wrongful acts.” Bos. Prof’l Hockey Ass’n, Inc. v. Dallas Cap & Emblem Mfg., Inc., 597 F.2d 71, 75 (5th Cir. 1979).

The Supreme Court has set out a two-part test to determine whether the Seventh Amendment’s guarantee applies to a particular claim: To determine whether a statutory action is more similar to cases that were tried in courts of law than to suits tried in courts of equity or admiralty, the Court must examine both the nature of the action and of the remedy sought. First, we compare the statutory action to 18th- century actions brought in the courts of England prior to the merger of the courts of law and equity. Second, we examine the remedy sought and determine whether it is legal or equitable in nature.

We begin, then, by examining the nature of the action, here trademark infringement and unfair competition based on infringement. “Trademarks and their precursors have ancient origins, and trademarks were protected at common law and in equity at the time of the founding of our country.” Matal v. Tam, 137 S. Ct. 1744, 1751 (2017). Trademark infringement claims began as common law actions for fraud or “deceit.” Sandforth’s Case, heard in an English court of law in 1584, may be the earliest trademark infringement action at common law. See Keith M. Stolte, How Early Did Anglo-American Trademark Law Begin? An Answer to Schechter’s Conundrum, 8 Fordham Intell. Prop. Media & Ent. L.J. 505, 509 (1998); 1 McCarthy § 5:2.

By the time the Seventh Amendment was ratified in 1791, the common law trademark infringement action was well established. See, e.g., Singleton v. Bolton (1783) 99 Eng. Rep. 661, 661; 3 Dougl. 293, 293 (stating that “if the defendant had sold a medicine of his own under the plaintiffs name or mark, that would be a fraud for which an action would lie”). Trademark actions also were brought in courts of equity during the same period. Blanchard v. Hill (1742) 26 Eng. Rep. 692; 2 Atk. 484, is the earliest reported trademark case brought in equity. See Mark P. McKenna, The Normative Foundations of Trademark Law, 82 Notre Dame L. Rev. 1839, 1852 (2007). Shortly thereafter, the accepted rule was “that equity could be invoked to protect the plaintiff’s title to his marks.” See id. at 1854. Early American case law likewise demonstrates that trademark rights could be enforced at equity. See, e.g., Taylor v. Carpenter, 23 F. Cas. 742, 744 (Story, Circuit Justice, C.C.D. Mass. 1844) (No. 13,784). Thus, because when the Seventh Amendment was ratified trademark rights had “been long recognized by the common law and the chancery courts of England,” Trade-Mark Cases, 100 U.S. 82, 92 (1879), this part of the Supreme Court’s test is indeterminate.

The second prong -- the nature of the remedy -- is the “more important” consideration and provides substantially more guidance here. Curtis, 415 U.S. at 196. Hard Candy does not seek actual damages, and it is undisputed that a plaintiff seeking only injunctive relief, costs, and fees would not be entitled to a jury trial. Thus, our analysis centers on Hard Candy’s request for an accounting of Anastasia’s profits and for the accompanying disgorgement of those gains. Our review is necessarily broader than the origins of the statutory remedy contained in the Lanham Act. As the Second Circuit recently explained, “the ancient remedies of accounting, constructive trust, and restitution have compelled wrongdoers to ‘disgorge’ -- i.e., account for and surrender -- their ill-gotten gains for centuries.” S.E.C. v. Cavanagh, 445 F.3d 105, 119 (2d Cir. 2006).

The remedy sought by Hard Candy, an accounting and disgorgement of profits, was historically a matter for courts of equity. (…) In other words, a court of law, limited to providing legal relief, would not be able to provide full redress to a trademark infringement plaintiff, but a court of equity could do so by providing an injunction along with ordering an accounting and disgorgement of the defendant’s profits -- precisely the remedy Hard Candy seeks here.

(…) Likelihood of confusion. The district court applied our seven-factor test (Op. III, A) (…) We look to the: (1) type of mark, (2) similarity of mark, (3) similarity of the products the marks represent, (4) similarity of the parties’ retail outlets and customers, (5) similarity of advertising media used, (6) defendant’s intent and (7) actual confusion.

(…) A defendant is entitled to the fair use defense if it establishes that it used the allegedly infringing term “(1) other than as a mark, (2) in a descriptive sense, and (3) in good faith.”

Secondary authorities: McCarthy on Trademarks and Unfair Competition (5th ed. 2018).

(U.S. Court of Appeals for the Eleventh Circuit, April 23, 2019, Hard Candy, LLC, v. Anastasia Beverly Hills, Inc., Docket No. 18-10877, Circuit Judge Marcus, for Publication)

U.S. Court of Appeals for the Second Circuit, BWP Media USA Inc., v. Polyvore, Inc., Docket No. 16-2825-cv

Procedure

Injunctive Relief

Permanent Injunction

Mootness

Damages

Polyvore’s website appears to no longer exist. (…) Even if that is the case, however, BWP’s core claims for damages are unaffected because, “unlike claims for injunctive relief challenging ongoing conduct, a claim for damages cannot evade review” since “it remains live until it is settled, judicially resolved, or barred by a statute of limitations.” Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 77 (2013). On the other hand, BWP’s request for a permanent injunction would now be moot because Polyvore’s defunct website no longer displays plaintiffs’ photos. See Bank of New York Co. v. Ne. Bancorp, Inc., 9 F.3d 1065, 1067 (2d Cir. 1993) (holding that requests for injunctions are “mooted by the occurrence of the action sought to be enjoined”). (John M. Walker, Jr., Circuit Judge, concurring in the result).

(U.S. Court of Appeals for the Second Circuit, April 17, 2019, BWP Media USA Inc., v. Polyvore, Inc., Docket No. 16-2825-cv, Per Curiam)

Kabran v. Sharp Memorial Hosp., S227393

Interpretation of a statute: Mandatory or directory: Obligatory or permissive: Injunctive relief: Mandamus: Jurisdictional:

In interpreting statutory requirements, courts have (…) used the terms “mandatory” and “directory.”  Whether a requirement is mandatory or directory is determined largely by its effect:  “If the failure to comply with a particular procedural step does not invalidate the action ultimately taken . . . the procedural requirement is referred to as ‘directory.’  If, on the other hand, it is concluded that noncompliance does invalidate subsequent action, the requirement is deemed ‘mandatory.’”  (Edwards v. Steele (1979) 25 Cal.3d 406, 410 (Edwards); see People v. Gray (2014) 58 Cal.4th 901, 909 (Gray).)  The mandatory-directory distinction is not to be confused with the distinction between “obligatory” and “permissive” statutory provisions.  (People v. McGee (1977) 19 Cal.3d 948, 959 (McGee).)  The latter distinction concerns whether a governmental entity or party is required to conform to a certain procedure (i.e., obligatory) or whether it “may or may not comply as it chooses” (i.e., permissive).  (Id. at p.  959; see B.H. v. County of San Bernardino (2015) 62 Cal.4th 168, 182.)  By contrast, “ ‘the “directory-mandatory” distinction is concerned only with whether a particular remedy — invalidation of the ultimate governmental action — is appropriate when a procedural requirement is violated.’ ”  (People v. Allen (2007) 42 Cal.4th 91, 101, (Allen); see ibid. [noncompliance with a directory rule does not invalidate the underlying action, but the rule may be enforced by other means, “ ‘such as injunctive relief, mandamus, or monetary damages’ ”].)

Erikson understood “mandatory” as a synonym for “jurisdictional.”  (Erikson, 48 Cal.App.4th at p. 1671.)  This court also has suggested on occasion that the “mandatory” and “jurisdictional” labels refer to the same concept.  (See Edwards, supra, 25 Cal.3d at p. 410; California Correctional Peace Officers Assn. v. State Personnel Bd. (1995) 10 Cal.4th 1133, 1148 (Correctional Peace Officers).)  Where the statutory provision at issue governs a decisionmaking entity’s exercise of authority — like that of an administrative agency — a “mandatory” statute may be “jurisdictional” in the sense that the entity lacks the power to take the action at issue if it does not comply with the statute.  (See Edwards, at p. 410 [hearing deadlines for board of permit appeals]; Gray, supra, 58 Cal.4th 901 [30-day warning period before issuing citations using a newly installed automated traffic enforcement device]; City of Santa Monica v. Gonzalez (2008) 43 Cal.4th 905 [notice to landlord before appointment of a receiver].) 

         But a party’s failure to comply with a mandatory requirement “does not necessarily mean a court loses fundamental jurisdiction resulting in ‘an entire absence of power to hear or determine the case, an absence of authority over the subject matter or the parties.”  (Allen, supra, 42 Cal.4th at p. 101, fn. 5, quoting Abelleira, 17 Cal.2d at p. 288.)  It is a “misuse of the term ‘jurisdictional’ . . . to treat it as synonymous with ‘mandatory’ ” as a general matter.  (Witkin, Cal. Procedure, Jurisdiction, § 4, p. 578.)  “There are many time provisions, e.g., in procedural rules, that are not directory but mandatory; these are binding, and parties must comply with them to avoid a default or other penalty.  But failure to comply does not render the proceeding void” in a fundamental sense.  (Ibid.; see Poster v. Southern Cal. Rapid Transit District (1990) 52 Cal.3d 266, 274–275; City of Santa Clara v. Superior Court (1971) 4 Cal.3d 545, 551, fn. 2 (Santa Clara) [Courts of Appeal “erred in reasoning that the limitation, because mandatory, was necessarily jurisdictional.”].)  The high court has similarly recognized, as a matter of federal law, that “mandatory” rules should not always “be given the jurisdictional brand.”  (Henderson v. Shinseki (2011) 562 U.S. 428, 435; see Arbaugh v. Y & H Corp. (2006) 546 U.S. 500, 510; Eberhart v. United States (2005) 546 U.S. 12, 17–18; see also Bowles v. Russell (2007) 551 U.S. 205, 216–217 (dis. opn. of Souter, J.).)

For example, a statute of limitations may be “mandatory in the sense that the court may not excuse a late complaint on grounds of mistake, neglect, or the like,” but “it is not ‘jurisdictional.’ ”  (Santa Clara, supra, 4 Cal.3d at p. 551, fn. 2.)  A properly raised objection to an untimely complaint may require that the court dismiss it, and the court’s failure to dismiss is reversible on appeal.  But a party cannot raise the untimeliness for the first time on appeal or in a collateral attack.  If an untimely complaint results in a judgment, the judgment will not be disturbed on timeliness grounds if the defendant did not properly preserve a statute of limitations defense.  (See Samuels v. Mix (1999) 22 Cal.4th 1, 8; cf. Gonzalez v. Thaler (2012) 565 U.S. __, __ [132 S.Ct. 641, 651] [“calling a rule nonjurisdictional does not mean that it is not mandatory or that a timely objection can be ignored”].)

In sum, jurisdictional rules are mandatory, but mandatory rules are not necessarily jurisdictional.  Noncompliance with a mandatory rule can result in invalidation of the action so long as the noncompliance is properly raised; a party can forfeit its challenge to the noncompliance by failing to object.  Noncompliance with a jurisdictional rule cannot be excused or forfeited; a party may assert such noncompliance for the first time on appeal or in a collateral attack as a ground for invalidating the action.  In addition, a court may decide on its own motion that it lacks authority over the action because of noncompliance with a jurisdictional rule.  (See Abelleira, 17 Cal.2d at pp. 302–303.)

Sections 657, 659, and 660, which govern on what ground and in what time period a litigant may seek a new trial, fall into the jurisdictional category. 

The question here is whether section 659a’s deadlines (30-day aggregate period) are similarly jurisdictional.  We hold that they are not.  As explained below, the Court of Appeal correctly concluded that the Hospital cannot challenge Kabran’s alleged noncompliance for the first time on appeal.

(Cal. S.C., January 19, 2017, Kabran v. Sharp Memorial Hosp., S227393).

Interprétation de la loi au sens formel, différences entre une exigence contraignante, une règle d'ordre, une exigence obligatoire, et un acte admis :

En interprétant les exigences de la loi, les Tribunaux ont utilisé le terme "contraignant" et le concept de simples règles d'ordre. Savoir si une exigence relève de l'une ou l'autre de ces notions se détermine avant tout par les effets de l'exigence : si manquer à respecter une étape procédurale particulière n'invalide pas une action ultérieure, alors l'exigence procédurale n'est qu'une règle d'ordre ("directory"). Mais si manquer à respecter invalide une action subséquente, l'exigence est contraignante ("mandatory"). La distinction "mandatory"-"directory" ne doit pas être confondue avec la distinction entre obligatoire (obligatory) et admis ("permissive"). La notion de "mandatory" revient à se demander si une entité gouvernementale est tenue de se conformer à une certaine procédure ou si elle peut choisir de s'y conformer ou non. Par contraste, la distinction "mandatory"-"directory" ne se préoccupe que de savoir si une conséquence particulière – l'invalidation de la dernière action du gouvernement – est ou non appropriée lorsqu'une exigence procédurale est violée. En particulier, manquer à respecter une règle "directory" n'invalide pas l'action, mais il est possible de faire respecter la règle par d'autres moyens, tels une injonction, un mandamus, ou une action en dommages-intérêts.

La jurisprudence a parfois compris le terme "mandatory" comme synonyme de "jurisdictional". Certes, quand la loi régit la procédure menant à une décision administrative, une disposition légale "mandatory" peut-être "jurisdictional" en ce sens que l'autorité administrative est dépourvue de la compétence d'agir si elle ne se conforme pas à dite disposition. Mais si une partie ne respecte pas une exigence "mandatory", le Tribunal ne perd pas nécessairement sa compétence. "Jurisdictional" n'est ainsi pas synonyme de "mandatory".

Il existe de nombreux délais, par exemple dans le droit procédural, qui ne sont pas "directory" mais "mandatory". Ces délais sont contraignants, et les parties doivent les respecter pour éviter de perdre un droit ou pour éviter d'autres pénalités. Mais ne pas respecter le délai ne rend pas toute la procédure caduque. Par conséquent, il serait erroné de conclure qu'un délai contraignant est nécessairement "jurisdictional". La Cour Suprême fédérale a reconnu de manière similaire, en droit fédéral, que les règles "mandatory" ne doivent pas toujours être qualifiées de "jurisdictional". Une objection déposée contre une requête hors délai peut impliquer une décision judiciaire d'irrecevabilité de dite requête, et la cour d'appel peut annuler le jugement si le Tribunal ne prononce pas l'irrecevabilité dans ces circonstances. Mais si la requête hors délai a tout de même fait l'objet d'un jugement au fond, une partie ne peut pas pour la première fois invoquer avec succès l'échéance du délai en appel ou en procédure collatérale. C'est que si une requête hors délai fait tout de même l'objet d'un jugement au fond, le jugement ne sera pas modifié pour des raisons de délais si le défendeur n'a pas préservé un moyen de défense à cet égard. Et donc qualifier une règle de "nonjurisdictional" ne signifie pas qu'elle ne soit pas "mandatory" ou qu'une objection soulevée à temps peut être ignorée.

En résumé, les règles juridictionnelles sont "mandatory", mais les règles "mandatory" ne sont pas nécessairement juridictionnelles. Ne pas se conformer à une règle "mandatory" peut entraîner une invalidation de l'acte aussi longtemps que la partie invoque l'absence de conformité. Dite partie peut abandonner son moyen de défense en ne le soulevant pas dans le cadre d'une objection. Mais ne pas se conformer à une règle juridictionnelle ne peut pas être excusé, et le moyen de défense ne peut pas être abandonné ; ainsi, l'absence de conformité peut être invoquée pour la première fois en appel ou dans une procédure collatérale comme motif d'irrecevabilité ; en outre, un Tribunal peut décider de lui-même qu'il n'est pas compétent en raison d'une règle juridictionnelle qui n'a pas été respectée.

Supreme Court: appellate jurisdiction, Direct appeal

Jurisdiction, U.S. Supreme Court: appellate jurisdiction: 1. Writ of Certiorari (discretionary); 2. Appeal (mandatory): the U.S. Supreme Court hears the cases that comes before it by appeal, available only as to decisions released by three-judge federal district court panels that grant or deny injunctive relief (28 USC Sec. 1253 ,  TITLE 28 - JUDICIARY AND JUDICIAL PROCEDURE,   PART IV - JURISDICTION AND VENUE,  CHAPTER 81 - SUPREME COURT :   Sec. 1253).

Direct appeals from decisions of three-judge courts:   except as otherwise provided by law, any party may appeal to the Supreme Court from an order granting or denying, after notice and hearing, an interlocutory or permanent injunction in any civil action, suit or proceeding required by any Act of Congress to be heard and determined by a district court of three judges (June 25, 1948, ch. 646, 62 Stat. 928).

Juridiction de la Cour Suprême fédérale : elle est discrétionnaire s’agissant de la procédure qui débute par un writ, mais elle est obligatoire dans les procédures d’appel. L’appel n’est à disposition que dans le cadre des décisions rendues par une cour de district fédérale à trois Juges, décision qui accorde ou refuse une injonction sollicitée par une partie en cours de procédure civile.