United States District Court, S.D. New York
April 26, 2005.
NILE RODGERS, Plaintiff,
ALFA ANDERSON, NORMA JEAN WRIGHT & LUCI MARTIN, Defendants.
The opinion of the court was delivered by: ANDREW PECK, Magistrate Judge
REPORT AND RECOMMENDATION
To the Honorable Richard J. Holwell, United States District
Plaintiff Nile Rodgers, one of the founders of the 1970's disco
era musical group "Chic," and owner of the registered service
mark "Chic," commenced this action against defendants Alfa
Anderson, Norma Jean Wright and Luci Martin, who were employed as
vocalists in "Chic," for their performing under the name "Chic,"
thereby violating plaintiff's trademark rights. (See generally
Dkt. No. 1: Compl.) On December 23, 2004, Judge Holwell granted
Rodgers a default judgment including injunctive relief against
defendants, and referred the matter to me for an inquest as to
damages and attorneys' fees. (Dkt. No. 17: 12/23/04 Default
Judgment.) Plaintiff submitted papers on the inquest seeking
statutory damages and attorneys fees. (Dkt. Nos. 21-23,
26.)*fn1 Defendants have not submitted any opposition papers, and the deadline for
doing so has long passed. (See Dkt. Nos. 18 & 20: Scheduling
For the reasons stated below, the Court should award plaintiff
Rodgers $250,000 in statutory trademark damages.
"Where, as here, `the court determines that defendant is in
default, the factual allegations of the complaint, except those
relating to the amount of damages, will be taken as true.'"
Chen v. Jenna Lane, Inc., 30 F. Supp. 2d 622, 623 (S.D.N.Y.
1998) (Carter, D.J. & Peck, M.J.) (quoting C. Wright, A. Miller &
M. Kane, Federal Practice & Procedure: Civil 3d § 2688 at 58-59
(3d ed. 1998)).
In 1977, plaintiff Nile Rodgers founded a partnership with
Bernard Edwards under the name "Chic" and obtained a service mark
for "Chic." (Dkt. No. 1: Compl. ¶¶ 10-12; Dkt. No. 22: Rodgers
Aff. ¶¶ 2-3.)*fn2 They performed under that name, with
defendants Anderson, Wright and Martin as employee backup
singers. (Compl. ¶ 14; Rodgers Aff. ¶ 7.) "At all times
defendants occupied the status of employee, and never were they
grant [sic] any right or permission to use the Trademark in any
fashion." (Compl. ¶ 14; see also Rodgers Aff. ¶ 7.) "`Chic' was
one of the top groups of the disco era in the 1970's, and had
. . . many Top 10 hits." (Rodgers Aff. ¶ 2.) Indeed, Chic has
been described as "disco's greatest band." See Steve Huey, "All
Music Guide," Chic: Bio, available at http://www.MTV.com. Beginning in November 2003, Rodgers learned that defendants
were performing as "Chic" or "Chic Live!," without Rodgers'
consent. (Compl. ¶¶ 15-18; Rodgers Aff. ¶¶ 8-9 & Exs.
B-J).*fn3 The complaint asserts claims under the federal
trademark laws (Compl. ¶¶ 21-32) and state law claims (id. ¶¶
As noted above, on December 23, 2004, Judge Holwell granted
plaintiff a default judgment and permanent injunction against
defendants Anderson, Wright and Martin, and referred the matter
to me for an inquest to "determine the amount of damages and
attorneys' fees due plaintiff as a result of defendants'
infringement on plaintiff's `Chic' trademark." (Dkt. No. 17:
The Second Circuit has approved the holding of an inquest by
affidavit, without an in-person court hearing, "`as long as [the
Court has] ensured that there was a basis for the damages
specified in the default judgment.'" Transatlantic Marine Claims
Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir.
1997) (quoting Fustok v. ContiCommodity Servs., Inc.,
873 F.2d 38, 40 (2d Cir. 1989)).
Plaintiff Rodgers seeks $500,000 in statutory damages pursuant
to 15 U.S.C. § 1117(c). (See Dkt. No. 21: Rodgers Br. at 5-6.)
Section 1117(c) provides:
(c) Statutory damages for use of counterfeit marks
In a case involving the use of a counterfeit mark (as
defined in section 1116(d) of this title) in
connection with the sale, offering for sale, or
distribution of goods or services, the plaintiff may elect, at any
time before final judgment is rendered by the trial
court, to recover, instead of actual damages and
profits under subsection (a) of this section, an
award of statutory damages for any such use in
connection with the sale, offering for sale, or
distribution of goods or services in the amount of
(1) not less than $500 or more than $100,000 per
counterfeit mark per type of goods or services sold,
offered for sale, or distributed, as the court
considers just; or
(2) if the court finds that the use of the
counterfeit mark was willful, not more than
$1,000,000 per counterfeit mark per type of goods or
services sold, offered for sale, or distributed, as
the court considers just.
15 U.S.C. § 1117(c)(1)-(2).
The rationale for this section is the practical inability to
determine profits or sales made by counterfeiters. See, e.g.,
Silhouette Int'l Schmied AG v. Chakhbazian, 04 Civ. 3613,
2004 WL 2211660 at *2 (S.D.N.Y. Oct. 4, 2004) (Peck, M.J.);
Gucci America, Inc. v. Duty Free Apparel, Ltd.,
315 F. Supp. 2d 511, 520 (S.D.N.Y. 2004) ("Congress added the statutory
damages provision of the Lanham Act in 1995 because
`counterfeiters' records are frequently nonexistent, inadequate,
or deceptively kept . . ., making proving actual damages in these
cases extremely difficult if not impossible.'") (quoting Senate
report); Tiffany (NJ) Inc. v. Luban, 282 F. Supp. 2d 123, 124
(S.D.N.Y. 2003) (same); Polo Ralph Lauren, L.P. v. 3M Trading
Co., 97 Civ. 4824, 1999 WL 33740332 at *4 (S.D.N.Y. Apr. 19,
1999) ("It is often the case that `counterfeiters' records are
nonexistent, inadequate or deceptively kept in order to willfully
deflate the level of counterfeiting activity actually engaged in,
making proving actual damages in these cases extremely difficult
if not impossible.'"); Sarah Lee Corp. v. Bags of New York,
Inc., 36 F. Supp. 2d 161, 165 (S.D.N.Y. 1999) ("Statutory damages are most appropriate when infringer
nondisclosure during fact finding leaves damages uncertain.").
Section 1117(c) "`does not provide guidelines for courts to use
in determining an appropriate award,' as it is only limited by
what `the court considers just.' 15 U.S.C. § 1117(c). However,
courts have found some guidance in the caselaw of an analogous
provision of the Copyright Act, 17 U.S.C. § 504(c), which also
provides statutory damages for willful infringement." Gucci
America, Inc. v. Duty Free Apparel, Ltd.,
315 F. Supp. 2d at 520 (citations omitted).*fn4 Among the appropriate factors
particularly relevant here are the deterrent effect on defendants
and others, and the defendants' failure to produce records from
which more traditional damages could be computed. See, e.g.,
Gucci America, Inc. v. Duty Free Apparel, Ltd.,
315 F. Supp. 2d at 520; see also cases cited in n. 4 above.
In this case, defendants have defaulted and by virtue of their
default, are deemed to be willful infringers. While Rodgers seeks
$500,000, he has not provided any basis for that figure nor any
cases in analogous situations that would support such an amount.
The Court believes that $250,000 in statutory damages based on
willful infringement is sufficient and appropriate to deter
defendants and others. This amount is consistent with (indeed,
lower than) awards in similar cases. E.g., Silhouette Int'l
Schmied AG v. Chakhbazian, 2004 WL 2211660 at *2 (awarding
$250,000 for more clearly willful trademark infringement); see,
e.g., Gucci America, Inc. v. Duty Free Apparel, Ltd.,
315 F. Supp. 2d at 520-21 ($2 million award for use of two
counterfeit marks); Tiffany (NJ) Inc. v. Luban, 282 F. Supp. 2d at 124-25 (Awarding plaintiff
the $550,000 in statutory damages sought by plaintiff because
"[b]y virtue of the default, [defendants'] infringement is deemed
willful, and therefore the Court has discretion to award anywhere
between $500 and $1,000,000 per counterfeit mark per type of good
sold," and amount plaintiff sought was "within the range of
awards in similar cases."); Rolex Watch U.S.A., Inc. v.
Brown, 01 Civ. 9155, 2002 WL 1226863 at *2 (S.D.N.Y. June 5,
2002) (Peck, M.J.) (awarding $1 million damages despite
defendant's use of multiple Rolex marks) (& cases cited therein);
Rolex Watch U.S.A., Inc. v. Jones, 99 Civ. 2359, 2002 WL
596354 at *6 (S.D.N.Y. Apr. 17, 2002) ("In short, statutory
damages of less than $1 million but more than $25,000 per
category of trademarked goods are appropriate to compensate the
plaintiffs for their losses and to deter [defendant] from
violating the plaintiffs' trademarks anew upon his release from
jail." Recommends award of $500,000 for infringement of Rolex
trademarks and $100,000 for infringement of Ralph Lauren
trademarks); Sarah Lee Corp. v. Bags of New York, Inc.,
36 F. Supp. 2d at 170 (awarding $750,000 in statutory damages).
Attorneys' Fees and Costs
Plaintiff Rodgers seeks attorneys' fees (see Dkt. No. 21:
Rodgers Br. at 6-7; see also Dkt. No. 26: 3/30/05 Cinque Aff.),
which may be awarded in "exceptional cases." See, e.g.,
Microsoft Corp. v. Black Cat Computer Wholesale, Inc.,
269 F. Supp. 2d 118, 124 (W.D.N.Y. 2002) ("The Lanham [A]ct specifically
provides that `the court in exceptional cases may award
reasonable attorney fees to the prevailing party.'
15 U.S.C. § 1117(a). A willful infringement may be considered an exceptional
case under the Lanham Act.") (citing Second Circuit authority);
GTFM, Inc. v. Solid Clothing Inc., 215 F. Supp. 2d 279,
305-06 (S.D.N.Y. 2002) ("`Exceptional' circumstances include willful infringement. . . . [Defendant]
Solid engaged in willful infringement. If defendant's bad faith
alone were not sufficient to make this an exceptional case, its
continued sales between March and November 2001, its conduct
during discovery, and its perjury during deposition and at trial
make this an exceptional case. GTFM is entitled to reasonable
attorney's fees."); Rolex Watch U.S.A., Inc. v. Brown, 2002
WL 1226863 at *3 (citing cases).
This Court has previously noted that there is some question as
to the availability of attorneys' fees where statutory damages
are awarded under § 1117(c) as opposed to § 1117(a) or (b). See
Rolex Watch U.S.A., Inc. v. Brown, 2002 WL 1226863 at
*3.*fn5 While at least one judge has declined to award
attorneys' fees under § 1117(c), see, e.g., Gucci America,
Inc. v. Duty Free Apparel, Ltd., 315 F. Supp. 2d at 522, most
decisions have awarded attorneys' fees even where the damage
award is pursuant to § 1117(c). See, e.g., Tiffany (NJ)
Inc. v. Luban, 282 F. Supp. 2d at 125 (Gucci judge awards
attorneys' fees without discussion); Rolex Watch U.S.A., Inc. v.
Jones, 2002 WL 596354 at *6; Sarah Lee Corp. v. Bags of New
York, Inc., 36 F. Supp. 2d at 170-71. The Court need not resolve that issue here. The Court finds
that the award of enhanced statutory damages of $250,000 under §
1117(c) more than suffices in this case to make plaintiff Rodgers
whole, including for the $15,697.35 claimed for attorneys' fees
and disbursements (see Dkt. No. 26: 3/30/05 Cinque Aff. ¶¶
6-7), and serves as a sufficient deterrent to these defendants
For the reasons set forth above, the Court should award
plaintiff Rodgers statutory trademark damages of $250,000.
Plaintiff's counsel is to serve this Report and Recommendation
on defendants and file proof of service with the Clerk of Court.
FILING OF OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal
Rules of Civil Procedure, the parties shall have ten (10) days
from service of this Report to file written objections. See
also Fed.R.Civ.P. 6. Such objections (and any responses to
objections) shall be filed with the Clerk of the Court, with
courtesy copies delivered to the chambers of the Honorable
Richard J. Holwell, 500 Pearl Street, Room 1950, and to my
chambers, 500 Pearl Street, Room 1370. Any requests for an
extension of time for filing objections must be directed to Judge
Holwell. Failure to file objections will result in a waiver of
those objections for purposes of appeal. Thomas v. Arn,
474 U.S. 140, 106 S. Ct. 466 (1985); IUE AFL-CIO Pension Fund v.
Herrmann, 9 F.3d 1049, 1054 (2d Cir. 1993), cert. denied,
513 U.S. 822, 115 S. Ct. 86 (1994); Roldan v. Racette,
984 F.2d 85, 89 (2d Cir. 1993); Frank v. Johnson, 968 F.2d 298, 300 (2d Cir.),
cert. denied, 506 U.S. 1038, 113 S.Ct. 825 (1992); Small v.
Secretary of Health & Human Servs., 892 F.2d 15, 16, (2d Cir.
1989); Wesolek v. Canadair Ltd., 838 F.2d 55, 57-59 (2d Cir.
1988); McCarthy v. Manson, 714 F.2d 234, 237-38 (2d Cir.
1983); 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72, 6(a), 6(e).