United States District Court, S.D. New York
4 PILLAR DYNASTY LLC and REFLEX PERFORMANCE RESOURCES, INC., Plaintiffs,
NEW YORK & COMPANY, INC. and NEW YORK & COMPANY STORES, INC., Defendants.
OPINION, ORDER, AND AMENDED UUDGMENT
a trial, a jury found defendants New York & Company, Inc.
and New York & Company Stores, Inc. (collectively,
"New York & Company") liable for infringing the
trademark of plaintiffs 4 Pillar Dynasty LLC ("4
Pillar") and Reflex Performance Resources, Inc.
("Reflex"). The Court entered judgment awarding
plaintiffs $5, 593, 011.87 -- three times defendants'
stipulated gross profits from the infringing products -- and
enjoining defendants from using plaintiffs' trademark in
connection with their products (the "Judgment").
Now before the Court is defendants' motion for judgment
as a matter of law and to alter or amend the Judgment, which
seeks to vacate the monetary award. Also before the Court is
plaintiffs' motion for attorneys' fees and for pre-
and post-judgment interest. For the reasons explained below,
the Court amends the Judgment to reduce the monetary award to
$1, 864, 337.29, and also grants plaintiffs' motion and
instructs plaintiffs to submit a calculation of their
attorneys' fees and interest.
relevant facts and background may be briefly summarized as
follows. 4 Pillar and Reflex, two companies owned by Behrooz
Hedvat and his brothers, design and sell women's apparel,
including spandex clothing intended to be used for yoga and
other "activewear." Trial Transcript
("Tr.") 38. On March 12, 2012, plaintiffs applied
to register the trademark "Velocity" (the
"Velocity mark"). Plaintiffs' Trial Ex.
("PX") 1. On March 11, 2014, the Velocity mark was
registered for "clothing and performance wear"
including, as relevant here, leggings, pants, sports bras,
tank tops, and hooded sweatshirts. PX 2; Tr. 50. 4 Pillar
holds the trademark, and Reflex pays a royalty to 4 Pillar to
use the trademark on the goods that Reflex produces. Tr. 38.
Reflex sells clothing with the Velocity mark to retailers
such as TJ Maxx, Marshalls, Ross, and Foot Locker, and it
also sells clothing online, through Amazon.com or its own
website. Tr. 51-52. Plaintiffs maintain a showroom in
Manhattan where buyers representing retailers can view
samples of plaintiffs' products. Id.
2015, a buyer came to plaintiffs' showroom and asked
Hedvat whether 4 Pillar had licensed the Velocity mark to New
York & Company. Tr. 82. Surprised by the question, Hedvat
looked at New York & Company's website and discovered
that New York & Company was marketing a collection of
activewear using the label "NY&C Velocity" (the
"NY&C Velocity mark"). Tr. 82-83; see
thereupon filed this action on April 15, 2016. See
Compl., ECF No. 1. While they asserted several causes of
action under the Federal Lanham Act and New York law, all of
their claims rested on the allegation that defendants'
use of the NY&C Velocity mark infringed plaintiffs'
Velocity mark. Compl. ¶¶ 13-51. In their pre-trial
submissions, plaintiffs made clear that they did not seek to
prove that they suffered actual damages from any
infringement, but rather they sought to recover
defendants' profits from the sale of NY&C Velocity
products. Proposed Pre-trial Consent Order 6, ECF No. 25.
case went to trial on February 6, 2017. In defendants'
opening statement, they asserted that Yelena Monzina and
Christine Munnelly -- respectively the creative director and
the head of merchandising of New York & Company - would
testify that when they decided to use the NY&C Velocity
mark they believed that no consumer would be confused. Tr.
33, 36-37. Specifically, defendants asserted that Monzina
would testify that after she came up with NY&C Velocity
as a name she ran a trademark search that turned up several
trademarks including the word "Velocity, " but that
she did not recall encountering plaintiffs' mark. Tr.
called only one witness, Hedvat, who testified during his
direct examination about the creation and registration of the
Velocity mark and the products on which it was used. See
generally Tr. 37-91. After describing his discovery of
the products bearing the NY&C Velocity mark following the
buyer's inquiry about a licensing arrangement between 4
Pillar and New York & Company, Hedvat testified that he
called his lawyers and asked them to request that New York
& Company stop using the Velocity mark. Tr. 86. He
further testified that defendants did not stop using the mark
after being contacted by plaintiffs' lawyers,
id., though on cross examination he could not recall
whether the lawyers sent defendants a cease-and-desist letter
or simply initiated this action, Tr. 210-11. After
Hedvat's examination concluded, plaintiffs read into
evidence a stipulation by the parties that defendants'
gross profits from the sale of products bearing the NY&C
Velocity mark were $1, 864, 337.29. Tr. 275.
then rested, and defendants moved for judgment as a matter of
law, which the Court denied:
THE COURT: All right. Does plaintiff rest?
MR. SOLOMON: Yes, your Honor.
THE COURT: Okay. The defense will call their first witness.
MR. O'REILLY: Your Honor, before we do that, we'd
just like to move for a judgment --
THE COURT: Ah, yes, okay. That motion is properly made and is
equally properly denied.
MR. O'REILLY: As expected. Thank you, your Honor.
Tr. 276. Defendants then rested without putting on any
evidence, id., despite their earlier representation
that they would call Monzina and Munnelly.
the same day, while the Court discussed with the parties the
instructions of law for the jury, defendants expressed their
position that an award of profits under the Lanham Act
required a finding of willfulness. Tr. 301-02. Both sides
agreed that the determination of whether any infringement was
willful was a matter for the Court to decide. Tr. 300-01. The
Court decided, however, that it would seek an advisory
verdict from the jury on the issue of willfulness (as well as
the binding verdict on the issue of infringement).
February 10, 2017, the case was submitted to the jury with
instructions as to the determination of whether there was
infringement and, if so, whether such infringement was
willful. Tr. 336-49. The jury returned a verdict of
infringement with an advisory finding that the infringement
was willful. Tr. 354. That same day, the Court entered
judgment "agree[ing] with the jury's opinion as to
willfulness" and "holding defendants jointly and
severally liable to plaintiffs in the amount of $5, 593,
011.87, " as well as "enjoin[ing] defendants from
using in connection with their products the term
'NY&C Velocity' as well as the term
'Velocity, ' alone or in conjunction with other
words." Judgment (Feb. 10, 2017), ECF No. 34. The
Judgment indicated that an opinion explaining the reasons for
the rulings therein would issue shortly. Id.
February 22, the Court granted defendants' request that
the Court stay the execution of the Judgment and forebear
issuing an opinion pending the disposition of defendants'
post-trial motion. Memo Endorsement (Feb. 22, 2017), ECF No.
39. On February 24, plaintiffs filed a motion seeking a
declaration that they were entitled to attorneys' fees, a
fourteen-day period in which to submit their invoices for
those fees, and an award of pre- and post- judgment interest.
Notice of Mot. (Feb. 24, 2017), ECF No. 40; Decl. of Aaron J.
Solomon in Supp. of Mot. ("Solomon Decl. dated Feb 24,
2011"), ECF no. 41. on March 2, defendants riled their
motion. Notice of Mot. (Mar. 2, 2017), ECF No. 52; Mem. of
Law (1) in Supp. of Defs.' Mot. for J. as a Matter of Law
and to Amend or Alter the J., and (2) in Opp. to Pls.'
Mot. for Att'ys' Fees and Pre-J. Interest
("Defs. Mem."), ECF. No. 53.
Court turns first to defendants' motion, which is styled
as a motion for judgment as a matter of law dismissing
plaintiffs' claim for damages under Federal Rule of Civil
Procedure 50(b) and to alter or amend the Judgment under Rule
59(e). The relief defendants seek is straightforward: they do
not challenge the jury's determination of infringement,
and they therefore accept the injunction contained in the
Judgment,  but they seek to vacate the monetary award
on the ground that there is no legal basis for such an award.
Specifically, they contend that a monetary award under ...