IP Law Daily, TRADEMARK—N.D. Ind.: Forest River awarded $5.56 million disgorged profits post-trial in trademark case against inTech Trailers, (Sep 20, 2024)

By Saurabh Kashyap, B.A., LL.B., LL.M.

Court found inTech's willful trademark infringement made the jury’s award insufficient, leading to enhanced damages for Forest River.

A federal district court in Indiana awarded Forest River, Inc. $5.56 million in enhanced damages in a post-trial trademark decision against inTech Trailers, Inc. The court found that inTech willfully infringed Forest River's trademarks and that the original $2 million jury award was insufficient to deter the infringement. The court enhanced the damages to ensure that inTech did not profit from its willful violation. Additionally, the court awarded Forest River $1.29 million in attorney fees due to the exceptional nature of the case, $244,623 in prejudgment interest to prevent inTech from unjust enrichment, and $51,933 in costs for necessary litigation expenses (Forest River, Inc. v. inTech Trailers, Inc., No. 3:21-cv-00645-DRL (E.D. Pa. Sept. 19, 2024)).

Background. The plaintiff, Forest River, Inc., is a well-known manufacturer of recreational vehicles, including trailers and motorhomes, that operates within the United States and holds a significant position in the RV industry. The plaintiff's brand portfolio includes several trademarks, including the “Della Terra” line of trailers. inTech Trailers, Inc., the defendant, also operates in the recreational vehicle industry, manufacturing trailers under its brand names.

Forest River filed this lawsuit against inTech Trailers in 2021, alleging trademark infringement. Forest River accused inTech of unlawfully using its “Della Terra” and “Mountain Design” trademarks to market and sell trailers. In September 2023, the court denied Forest River’s motion for summary judgment. The jury trial, which spanned five days, concluded with a verdict favoring Forest River, awarding $2 million in profits to be disgorged by inTech. The jury also found the infringement was willful, leading to a request for additional remedies from Forest River. Post-trial, Forest River sought enhanced damages, attorney fees, prejudgment interest, and other costs, which inTech opposed.

Enhanced damages. Forest River argued that the jury’s award of $2 million in disgorged profits was insufficient, considering the willfulness of inTech’s infringement and its remaining profit from the sale of infringing products. Forest River pointed to testimony from inTech’s chief financial officer, who admitted that the company’s net profit from sales of the infringing trailers amounted to $5.56 million. Forest River sought to ensure that inTech did not profit from its infringement, requesting that the court increase the award to reflect the entirety of inTech’s profits.

InTech countered that the original award and the permanent injunction against it were adequate to compensate Forest River and deter future infringement. Additionally, inTech argued that some of its profits were attributable to factors unrelated to the infringement, such as the quality or style of its trailers. However, the court rejected this argument, finding that inTech had failed to present evidence to support an apportionment of profits based on non-infringing factors. Citing Hamilton-Brown Shoe Co. v. Wolf Bros. & Co., 240 U.S. 251 (1916) and Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S. 203 (1942), the court concluded that when the proportion of profit attributable to the infringing trademark cannot be reasonably determined, the entire profit should be awarded to the trademark owner.

Ultimately, the court increased the profit award to $5.56 million, concluding that allowing inTech to retain a significant portion of its profits would undermine the law’s objective of deterring trademark infringement.

Attorney fees. Forest River also sought attorney fees, arguing that the case was “exceptional” due to the willfulness of inTech’s infringement. Under 15 U.S.C. § 1117(a), a court may award reasonable attorney fees to the prevailing party in exceptional cases. Forest River emphasized that inTech knowingly continued to use the infringing marks despite receiving a cease-and-desist letter from Forest River in 2020.

In opposition, inTech argued that the case did not meet the threshold for an award of attorney fees, citing extra-jurisdictional cases to support the contention that something more than willfulness was required. The court disagreed, pointing to established Seventh Circuit precedent, such as Badger Meter, Inc. v. Grinnell Corp., 13 F.3d 1145 (7th Cir. 1994), which held that willfulness alone can justify a finding of exceptionality.

The court ultimately granted Forest River’s request for attorney fees, awarding $1.29 million. The court noted that inTech’s conduct during the litigation, including presenting weak legal arguments and failing to cooperate fully in discovery, further supported the award.

Prejudgment interest. Forest River requested prejudgment interest on the enhanced profit award, arguing that it was entitled to compensation for the time value of the money inTech had wrongfully retained. Although 15 U.S.C. § 1117(b) explicitly provides for prejudgment interest in cases involving counterfeit marks, the statute is silent on the issue in traditional trademark cases.

Nevertheless, the court found that prejudgment interest was appropriate in this case, citing Gorenstein Enters. v. Quality Care-USA, Inc., 874 F.2d 431 (7th Cir. 1989). The court reasoned that awarding prejudgment interest would prevent inTech from being unjustly enriched by retaining profits that rightfully belonged to Forest River. The court awarded Forest River $244,623 in prejudgment interest based on the enhanced profit award.

Costs. Forest River also sought to recover $72,227 in taxable costs, including deposition transcript fees, trial exhibit preparation costs, and real-time trial feed expenses. inTech challenged several of these costs, arguing that they were excessive or unnecessary. For example, inTech objected to the inclusion of real-time trial feed expenses, claiming that they were for the convenience of counsel and not essential to the litigation.

The court agreed with some of inTech’s objections, excluding costs related to real-time trial feeds and other expenses deemed unnecessary. However, the court upheld the bulk of Forest River’s cost request, ultimately awarding $51,933 in taxable costs.

The Case is No. 3:21-cv-00645-DRL.

Judge: Leichty, D.

Attorneys: Jozeff W. Gebolys Phv (Taft Stettinius & Hollister LLP) for Forest River, Inc. Ryan M. Fountain (Law Offices of Ryan M. Fountain) for InTech Trailers, Inc.

Companies: Forest River, Inc.; InTech Trailers, Inc.

Cases: Trademark IndianaNews GCNNews