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Brighton Collectibles, Inc. v. RK Texas Leather Mfg

United States District Court, S.D. California

May 27, 2014

BRIGHTON COLLECTIBLES, INC., Plaintiff,
v.
RK TEXAS LEATHER MFG; K & L IMPORTS, INC.; et al., Defendants, and related cross claims.

ORDER DENYING DEFENDANT AIF CORPORATION, INC'S MOTION FOR JUDGMENT AS A MATTER OF LAW, AND IN THE ALTERNATIVE, FOR A NEW TRIAL [Dkt. No. 393.]

GONZALO P. CURIEL, District Judge.

Before the Court is Defendant AIF Corporation, Inc.'s ("AIF" or "Defendant") motion for judgment as a matter of law, or in the alternative, for a new trial. (Dkt. No. 393.) Plaintiff Brighton Collectibles, Inc. ("Brighton" or "Plaintiff") filed an opposition on March 3, 2014. (Dkt. No. 406.) AIF filed a reply on April 7, 2014. (Dkt. No. 409.) A hearing was held on May 16, 2014. (Dkt. No. 415.) Based on a review of the briefs, the record, hearing arguments by the parties, and the applicable law, the Court DENIES AIF's motion for judgment as a matter of law, and in the alternative, for a new trial.

Background

Starting October 23, 2013, the Court held a five-day jury trial on Plaintiff's Complaint alleging copyright infringement against Defendant AIF.[1] On October 30, 2013, the jury returned a special verdict in favor of Plaintiff and against Defendant AIF. (Dkt. No. 386.) Specifically, the jury found that AIF infringed upon valid copyrights owned by Brighton. (Id.) Out of 51 of AIF's designs, the jury found infringement for 39 of the designs encompassing 11 copyrights. (Id.) The jury also found that AIF did not engage in copyright infringement willfully or innocently. (Id.) For damages, the jury awarded Plaintiff $1, 000, 000 in lost profits and $1, 050, 000 in statutory damages. (Id.)

Plaintiff filed a copyright, trademark, and trade dress infringement complaint on February 24, 2010. (Dkt. No. 1.) AIF was later added to the case, in February 2011, on Brighton's First Amended Complaint solely on copyright infringement. (Dkt. No. 51.)

The issue rased in this motion concerns the lost profit damages assessed against AIF. Therefore, some background as to the discovery of AIF's sales invoices is relevant. Fact discovery in this case closed on March 9, 2012. AIF produced some invoices during discovery and continued to produce sales records after discovery had closed. AIF submitted supplemental invoices to Brighton on June 1, 2012, July 6, 2012, July 10, 2012; July 23, 2012, July 25, 2012, and June 10, 2013.

At first, AIF had difficulty producing invoices because Brighton had not disclosed any SKU numbers that were alleged to have infringed its designs. This was accomplished on December 20, 2011. In addition, AIF had challenges producing invoices because the invoices were all in paper form until AIF adopted Quick Books in 2010. The final production of invoices occurred on September 23, 2013, one month before trial, which amounted to 32, 000 AIF invoices with dates ranging from 2005 to 2009 which were admitted at trial as Exhibits JO, JP, JQ, JR, JS, JT and OP. On October 8, and again on October 21, 2013, AIF's damages expert David Drews submitted a supplemental expert report that took into account the additional invoices produced after the close of discovery. According to Drews' calculations, AIF's gross revenues from its sale of the accused products were $24, 692.46 and its net profits were $3, 640.76. (Dkt. No. 409-4, Walker Decl., Ex. E.)

Over AIF's relevance objection, the Court allowed Plaintiff to admit AIF's total gross revenues of all products from 2004-2010 which totaled $55, 823, 870. This was the only calculation provided by Plaintiff to the jury. As a result, during rebuttal closing argument, Plaintiff's counsel stated, "[t]he fact is we don't know what they have sold of these designs in issue. We don't know if they were $25, 000 or a million dollars, or $5 million." (Dkt. No. 393-4 at 3.)

AIF moves pursuant to Federal Rule of Procedure ("Rule") 50(b), or alternatively, it also moves for a new trial pursuant to Rule 59(a) based on the jury's special verdict of lost profit damages of $1, 000, 000 as speculative, excessive and not supported by substantial evidence.

AIF also argues that the jury's statutory damages of $1, 050, 000 was calculated improperly. It contends that since the jury found only 11 infringing works at issue, and no willful infringement, the statutory award could not be more than $330, 000 as provided in 17 U.S.C. ยง 504(c). Plaintiff does not dispute this and agrees with AIF. However, Plaintiff argues it will be selecting "lost profits" as its damages of choice as long as the Court does not grant AIF's motion.

DISCUSSION

I. Judgment as a Matter of Law

A. Legal Standard

As a threshold matter, the Court must determine whether AIF waived its right to move for judgment as a matter of law by failing to move for judgment as a matter of law at ...


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