[00:00:37] Speaker 02:
Our next case is number 14, 1856, Romag Fasteners Inc.

[00:00:43] Speaker 02:
versus Fossil Inc.

[00:01:15] Speaker 02:
Mr. Freeman.

[00:01:17] Speaker 05:
Good morning, Your Honor.

[00:01:17] Speaker 05:
May it please the court?

[00:01:18] Speaker 05:
My name is Jonathan Freiman on behalf of ROMAG.

[00:01:21] Speaker 05:
Your Honor, this is a case where 700,000 handbags with counterfeit components were sold over the course of years for millions of dollars by a company that designed the handbags, specified the components, controlled its manufacture at a captive factory in China, and chose not to monitor that factory for counterfeits even though it knew

[00:01:43] Speaker 05:
that counterfeits were rife in China, and that this very factory had infringed trademarks in the past.

[00:01:49] Speaker 05:
The jury found that fossil had infringed.

[00:01:51] Speaker 02:
Your problem is that the Second Circuit in the Bash case decided that you couldn't get profits without showing a willfulness.

[00:02:04] Speaker 02:
And the Merck case, which comes after these two statutory amendments on which you rely in 1996 and 1999,

[00:02:13] Speaker 02:
reaffirmed the Bash approach.

[00:02:18] Speaker 02:
So what are we supposed to do?

[00:02:19] Speaker 02:
Well, how can we depart from that?

[00:02:21] Speaker 05:
Well, Your Honor, the Mercka-Prova case recites the previous standard, which, of course, has been in numerous Second Circuit decisions, because, as Your Honor pointed out, George Bash was the law of the circuit.

[00:02:31] Speaker 05:
But the Mercka-Prova case does not turn in any way on the question of willfulness, because there's no question that there is willfulness in that case.

[00:02:39] Speaker 02:
Do you want us to dismiss what they said as dictum?

[00:02:41] Speaker 05:
It is dictum, Your Honor, because willfulness is established there.

[00:02:45] Speaker 05:
And in Fendi, as I'm sure Your Honor knows, the Second Circuit pointed out that the Second Circuit has not addressed the effect of the 99 amendments, let alone the 96 amendments.

[00:02:54] Speaker 03:
So the question is, if Your Honor looks at the law... So you agree that there's nowhere that the Second Circuit has directly addressed?

[00:03:03] Speaker 05:
The Second Circuit has never directly addressed the language of the 1999 amendment.

[00:03:06] Speaker 05:
Or put differently, Your Honor, the Second Circuit has never directly addressed the statute as it exists now.

[00:03:12] Speaker 05:
It has never addressed the current text of the Latam Act.

[00:03:15] Speaker 05:
And that's, of course, what the Second Circuit would be asked to address and what this court needs to address.

[00:03:19] Speaker 05:
This court needs to address the current text.

[00:03:21] Speaker 05:
And it needs to predict what the Second Circuit would do when confronted with the current text.

[00:03:26] Speaker 05:
Now, I gave your honors a supplemental authority letter a few days ago about a case decided by the Second Circuit just before Christmas.

[00:03:33] Speaker 03:
And I think Maimonides was particularly enlightening.

[00:03:36] Speaker 05:
Well, Maimonides says when Congress uses

[00:03:40] Speaker 05:
two different terms in the same portion of an act, in the same act.

[00:03:45] Speaker 03:
Standard canons of statutory instruction.

[00:03:47] Speaker 05:
It is a standard canon of statutory interpretation.

[00:03:50] Speaker 01:
And the important thing here, Your Honor, is... Isn't that more helpful when the two different parts of the statute are enacted at the same time, which is not the case we have here?

[00:03:59] Speaker 01:
Well, it actually is the case here because the public law of... But they didn't change the portions you're relying on from previous portions.

[00:04:06] Speaker 01:
They just added in another damages remedy to apply to the dilution costs, right?

[00:04:11] Speaker 05:
They did add in another remedy.

[00:04:13] Speaker 01:
Essentially, and I think you agree that prior to this amendment, it had generally been the law for the portions affected by your case that willfulness was required.

[00:04:25] Speaker 05:
In the second circuit, yes, Your Honor.

[00:04:26] Speaker 01:
In almost all circuits.

[00:04:28] Speaker 05:
No, Your Honor.

[00:04:28] Speaker 05:
In fact, at the time of the 1999 amendment, there was a split among the circuits.

[00:04:33] Speaker 05:
I believe it was four to three at the time, certainly the 11th circuit.

[00:04:38] Speaker 02:
But suppose that's the case.

[00:04:40] Speaker 02:
Why doesn't the 1999 amendment suggest that Congress didn't want to change anything and intended to leave it as it was?

[00:04:49] Speaker 05:
Well, Your Honor, to be fair, I think that what Congress was indicating in the 1999 amendment

[00:04:54] Speaker 05:
was that it had always understood there not to be a requirement of willfulness in this context.

[00:05:00] Speaker 05:
And Judge Hughes just pointed that.

[00:05:02] Speaker 02:
How did it do that?

[00:05:03] Speaker 05:
Well, it did that.

[00:05:04] Speaker 05:
Your Honor, we need to look at the text of the act as a whole.

[00:05:06] Speaker 05:
And the first thing we need to look at, and this is in regard to Judge Hughes' question, is yes, they added a second part.

[00:05:11] Speaker 05:
But they deleted the old part and added that that portion of the public law, which of course goes into the statute, has this very clear distinction between the requirement of an infringement and a willful.

[00:05:20] Speaker 02:
I just needed some of the language from the old law.

[00:05:22] Speaker 02:
They didn't change it.

[00:05:24] Speaker 02:
But, Your Honor, they chose to delete it.

[00:05:26] Speaker 02:
Wait, wait, wait.

[00:05:27] Speaker 02:
I'm sorry.

[00:05:29] Speaker 02:
With respect to the 43A application, they didn't change the language.

[00:05:34] Speaker 02:
They just repeated it when they enacted this new language with respect to dilution, right?

[00:05:41] Speaker 05:
They did repeat it, but first they removed it.

[00:05:43] Speaker 05:
That is, they didn't just leave it in place.

[00:05:45] Speaker 05:
They took the whole thing out and they put in a whole new thing which distinguished between the need for infringement, for ordinary infringement actions, or willful infringement for dilution actions.

[00:05:54] Speaker 05:
And that's exactly where the old canon that Judge Wallach was referring to and that's referred to in Maimonides comes into play.

[00:06:01] Speaker 05:
And of course, we have to read this in the context not only of the 99 amendments, but, Your Honor, in the 96th Amendment, in the statutory damages section of the Lanham Act, it's very clear that- You make that argument around page 40 of your brief regarding the 96th Amendment.

[00:06:21] Speaker 03:
You say it demonstrates that a showing of willfulness isn't required.

[00:06:25] Speaker 03:
Did you make that argument before the district court?

[00:06:27] Speaker 03:
And if so, where is it in the record?

[00:06:31] Speaker 05:
We've argued all along, Your Honor, that 1117A does not require willfulness.

[00:06:36] Speaker 05:
And we are pointing to this textual support.

[00:06:39] Speaker 05:
We've always made a structural argument.

[00:06:40] Speaker 03:
Did you make the addition of C argument to the district court?

[00:06:45] Speaker 05:
I'm not sure whether we did, Your Honor.

[00:06:46] Speaker 03:
That means you didn't.

[00:06:49] Speaker 05:
It means I'm not sure whether we did.

[00:06:52] Speaker 05:
Your Honor, there's further textual support.

[00:06:53] Speaker 05:
1117b itself allows treble profits for willful infringement, making clear that Congress distinguishes between enhanced damages.

[00:07:01] Speaker 05:
And this is just like the patent context.

[00:07:02] Speaker 02:
So what's your theory that if Congress had wanted to approve the Second Circuit approach, it would have put the same willful violation language in with respect to 43a?

[00:07:17] Speaker 05:
Your Honor, if Congress wanted to make willfulness a prerequisite for profits, it would not have distinguished between the need for willful infringement for profits in the dilution context and plain infringement in the ordinary context.

[00:07:27] Speaker 02:
But that's not exactly what they did.

[00:07:30] Speaker 02:
What they did with respect to dilution is they applied the willfulness requirement both to profits and to damages.

[00:07:38] Speaker 02:
So that's different from the 43A approach, as reflected in Bosch, where the

[00:07:45] Speaker 02:
willfulness requirement only applies to profits and not to damages, correct?

[00:07:50] Speaker 05:
Well, Your Honor, even in... Is that true?

[00:07:53] Speaker 05:
It is true, Your Honor, but even in 1117A and the references there, which are to 1111 and 1114, there are these exceptions that are built into 1117A, and they contain targeted exceptions for innocent infringers, someone who marks something on packaging, a domain name, registration... Just to stick with my point for a moment, it is not the case that

[00:08:15] Speaker 02:
Congress would have achieved its objectives in agreeing with the Second Circuit simply to put the willfulness requirement in with respect to 43A, because that would have gone further than Congress clearly wanted to go, because it would have created a willfulness requirement for damages as well, right?

[00:08:35] Speaker 05:
Well, Your Honor, Congress in passing the statute knew that it was saying willful... You're not responding.

[00:08:40] Speaker 05:
I'm sorry, Your Honor, I meant to be responding.

[00:08:42] Speaker 05:
I believe that Congress was, that all of these different parts of the statute are manifesting Congress's intent that there be a difference and a heightened requirement for dilution.

[00:08:52] Speaker 05:
And there are heightened requirements for other things, for treble damages, for higher statutory damages, for treble profits.

[00:08:59] Speaker 05:
All of them require willfulness.

[00:09:01] Speaker 05:
And they're all superfluous if we assume that there's a willfulness requirement for profits across the board in the case of ordinary infringement.

[00:09:08] Speaker 05:
And Congress's enactment in 1999 in having these two

[00:09:11] Speaker 05:
The one modified by Wilful and one not modified by Wilful is consistent with everything else in the statute.

[00:09:17] Speaker 05:
It's consistent with 1117B and the treble profits.

[00:09:19] Speaker 05:
It's consistent with 1117C and the 10 times higher statutory damages.

[00:09:24] Speaker 05:
And it's consistent with the targeted exemptions for innocent infringers in very particular contexts, but not across the board.

[00:09:31] Speaker 05:
Your Honor, I have to add.

[00:09:32] Speaker 03:
Let me ask you a housekeeping question before you add something.

[00:09:36] Speaker 03:
The last seven pages are your break or so.

[00:09:41] Speaker 03:
argued patent infringer cannot invoke latches when the victim has filed suit within the applicable period.

[00:09:52] Speaker 03:
So doesn't SCA hygiene products sort of moot your argument?

[00:10:00] Speaker 03:
in that section.

[00:10:01] Speaker 05:
SCA Hygiene answers the question for the circuit.

[00:10:03] Speaker 05:
I believe the CERC petition is 11 days there.

[00:10:06] Speaker 05:
We preserved the argument because obviously it's expected that a CERC petition will be filed in that case, but there's no reason to re-argue what the en banc court has already decided there.

[00:10:15] Speaker 05:
Again, that case came down during the pendency of this appeal.

[00:10:19] Speaker 05:
I want to turn also... Well, I see I have six minutes remaining, which is what I'd like to preserve for re-bottle.

[00:10:25] Speaker 02:
Okay.

[00:10:25] Speaker 02:
Thank you.

[00:10:32] Speaker 02:
Mr. Dupler, is that how you pronounce it?

[00:10:34] Speaker 04:
Yes, Your Honor.

[00:10:34] Speaker 04:
Thank you.

[00:10:35] Speaker 04:
May it please the Court.

[00:10:37] Speaker 04:
Jeff Dupler on behalf of the Fossil and the Cross Appellants.

[00:10:40] Speaker 04:
As this Court's already observed, the Second Circuit has long held that principles of equity in the Lanham Act in Section 1117A preclude the award of defendants' profits, which is often an extraordinary punitive and largely disproportionate award, unless willful infringement has been shown.

[00:10:57] Speaker 04:
The Basch Court in 1992 established this principle

[00:11:01] Speaker 04:
They went through a Second Circuit precedent.

[00:11:03] Speaker 04:
They went through a Supreme Court precedent dating back to 1916.

[00:11:06] Speaker 00:
If Congress had intended to abrogate the Second Circuit's rule, how would it have done it?

[00:11:13] Speaker 04:
Well, Your Honor, if Congress had intended to abrogate the rule of the Second Circuit and of other circuits that apply that same principle, they could have done so in so many words and simply said, willful infringement is no longer required for an award of defendant's profits under 1117.

[00:11:27] Speaker 01:
But that's an odd kind of sentence to put into a statute

[00:11:30] Speaker 01:
That's not the way Congress usually writes statutes.

[00:11:33] Speaker 01:
They usually write them on what's required to show a violation.

[00:11:36] Speaker 01:
And here, the language just says you need infringement, not willful infringement.

[00:11:41] Speaker 04:
Well, it does.

[00:11:43] Speaker 04:
What it says is that the three monetary remedies set forth in 1117A are all subject to principles of equity.

[00:11:51] Speaker 04:
And obviously, if the plaintiff is seeking its own actual damages, those principles of equity apply differently.

[00:11:56] Speaker 04:
If it's seeking costs, certainly it applies differently.

[00:11:59] Speaker 04:
However, if it's seeking an award of defendant's profits, then those principles of equity long developed through the common law tradition and codified in the Lanham Act and then developed through the courts hold that it's, willful infringement is required.

[00:12:14] Speaker 02:
In some circuits, well... Has this circuit conflict been presented to the Supreme Court for a resolution?

[00:12:20] Speaker 02:
Have there been cert petitions?

[00:12:21] Speaker 04:
There has been one cert petition filed in the Contessa case in 2005.

[00:12:25] Speaker 04:
A cert was not granted and obviously no conclusions could be drawn from that.

[00:12:28] Speaker 04:
Which circuit did that come from?

[00:12:30] Speaker 04:
I believe the fifth.

[00:12:32] Speaker 04:
I'm not sure.

[00:12:32] Speaker 04:
I believe the fifth.

[00:12:34] Speaker 04:
The case was called Contessa.

[00:12:35] Speaker 01:
Is it they require willful this or not?

[00:12:38] Speaker 04:
The fifth circuit in the Quick Technologies decision in 2002

[00:12:42] Speaker 04:
continue to apply the Pebble Beach Factors.

[00:12:44] Speaker 04:
The answer to your question, Your Honor, is that they don't have a threshold requirement, although they consider willfulness to be an important factor and a strong factor.

[00:12:52] Speaker 04:
The Fifth Circuit in 98 applied the Pebble Beach Factors, which included very similar to the George Bash Factors, but didn't have a threshold requirement.

[00:13:02] Speaker 04:
Other circuits, certainly the First Circuit with respect to discouragement of profits under an unjust enrichment theory or deterrence theory, those

[00:13:11] Speaker 04:
That circuit certainly would apply it.

[00:13:13] Speaker 04:
The 10th Circuit has applied it post the 99 amendments.

[00:13:18] Speaker 04:
Your Honor has asked some questions about those 99 amendments, and I think the Court recognizes that those amendments were designed by definition to address the dilution remedy discrepancies that had developed when they passed the Dilution Act three years earlier.

[00:13:34] Speaker 04:
The legislative history is replete with explanations about it, the title of the Act suggested,

[00:13:38] Speaker 04:
Senator, Representative Cummings' remarks express exactly what Congress was doing.

[00:13:44] Speaker 04:
And so these concepts of statutory construction that, for instance, the Third Circuit applied in banjo buddies are unnecessary in terms of where Congress has given a clear expression of their intent as to what they were trying to do in passing that act.

[00:13:59] Speaker 04:
They had the, the scores also recognized already that the language was not, the language that George Bash addressed was not in any way changed

[00:14:08] Speaker 04:
It was still a violation of the Act, subject to principles of equity, and those subject to principles of equity remained.

[00:14:16] Speaker 02:
How do you agree that the Congress in the 1999 amendments meant to leave things in the mess that they were before?

[00:14:25] Speaker 04:
Well, I don't know that it was a mess.

[00:14:27] Speaker 04:
It was certainly that different circuits took differing views.

[00:14:30] Speaker 04:
All circuits

[00:14:32] Speaker 04:
for decades have considered willfulness to be an important factor.

[00:14:36] Speaker 04:
Is your view that they intended to leave things alone?

[00:14:39] Speaker 04:
It's my view, Your Honor, and Fossil's view that, in fact, Congress did not intend to do anything.

[00:14:44] Speaker 04:
To leave things alone, their intent was to fix a drafting error that had resulted from a statutory cause of action they created three years earlier.

[00:14:52] Speaker 04:
And so their intent was focused strictly on the dilution act.

[00:14:55] Speaker 04:
And the legislative history supports that.

[00:15:00] Speaker 04:
To the extent that this court were to take up the ROMEX offer to predict what the Second Circuit would do, 12 district courts, including our court and the court below, have addressed this issue.

[00:15:13] Speaker 04:
And they have squared up and analyzed the legislative history.

[00:15:17] Speaker 04:
They've taken the heavy lifting that some of the other circuits, the third, the fourth, and fifth, haven't done and gone behind the legislation to figure out what exactly the 99 amendments were all about.

[00:15:27] Speaker 04:
And 10 of the 12 district courts that have addressed this

[00:15:30] Speaker 04:
have decided that with the conclusion, have come to the conclusion that the George Bass standard continues to apply and that willfulness continues to be a threshold requirement.

[00:15:41] Speaker 03:
I'd like you to address, because I find it disturbing and I intend to ask your opposing counsel about it, the history of, Romek's history of obtaining temporary restraining orders and the similarity, the shocking similarity, if I may, in the

[00:15:59] Speaker 03:
language of the various applications in which the corporate officer presently claims that he is surprised and shocked each time and the timing of them.

[00:16:12] Speaker 04:
Yes, Your Honor.

[00:16:13] Speaker 04:
As the court made clear, the court below made clear in both its memorandum decision and in its post-trial order, August 8th, the first one being July 2nd, ROMAG three of the four years prior, this case was brought originally in 2010,

[00:16:29] Speaker 04:
In 2007, in the same district court, and it turns out in front of the same district judge, this plaintiff came before the court and said, I need a temporary restraining order because I'm shocked and surprised to find counterfeit versions of by magnetic snap fasteners in products on the shelves.

[00:16:47] Speaker 04:
And 22 days later, that case was settled lucratively.

[00:16:51] Speaker 04:
The TROs... The timing of them as well.

[00:16:54] Speaker 04:
They were... I'm sorry.

[00:16:56] Speaker 04:
Yes, Your Honor.

[00:16:56] Speaker 04:
It was timed shortly before Black Friday.

[00:16:59] Speaker 04:
During the trial of this case, plaintiff's principal testified, although he was well familiar with the... The CEO had never heard of, right?

[00:17:06] Speaker 04:
That's right.

[00:17:07] Speaker 04:
He testified that he had never heard of Black Friday, despite his involvement in the retail apparel industry for over 15 years.

[00:17:15] Speaker 04:
In addition, this case was brought... The complaint was filed on November 22nd.

[00:17:21] Speaker 04:
The T.R.O.

[00:17:21] Speaker 04:
motion was brought on November 23rd.

[00:17:24] Speaker 04:
Black Friday was that Friday.

[00:17:26] Speaker 04:
And the similar principle was held, the same approach, the same attempt to extract a lucrative as the court below found.

[00:17:34] Speaker 04:
The inescapable conclusion was that they strategically timed the suit to increase their leverage and to extract a profitable settlement.

[00:17:43] Speaker 04:
And in 2008, a similar lead-up had happened, where once again in November, shockingly and surprisingly,

[00:17:52] Speaker 04:
This plaintiff discovered counterfeit versions of what it thought were counterfeit versions of its snaps in products on shelves, this time at a store called Designer Warehouse.

[00:18:02] Speaker 04:
And because it turned out at trial that they were friends, the plaintiff's principal were friends of the person who had supplied the snaps, there was a settlement reached, but no lawsuit was filed in that case.

[00:18:14] Speaker 04:
So in 2007, 2008, and in 2010, all in November, all before Black Friday,

[00:18:22] Speaker 04:
cases were either brought or threatened to be brought.

[00:18:25] Speaker 04:
Seasoned assist letters were sent.

[00:18:26] Speaker 01:
Well, of course.

[00:18:26] Speaker 01:
I mean, even if this is kind of shady litigation tactics, you could avoid this by not purchasing counterfeit snaps and exercising better control on your part, too, couldn't you?

[00:18:37] Speaker 04:
Yes, Your Honor.

[00:18:38] Speaker 01:
I mean, you're not disputing that these are all counterfeit and that you're liable.

[00:18:42] Speaker 04:
We are not disputing that the jury determined they were counterfeit under the definition of counterfeit under the Lanham Act.

[00:18:47] Speaker 04:
And we're certainly not disputing that the jury found us to be liable.

[00:18:51] Speaker 04:
We never purchased any SNAPs.

[00:18:53] Speaker 04:
The manufacturer they described as a captive manufacturer is far from it.

[00:18:57] Speaker 04:
The record shows that it was a third party manufacturer pursuant to an agreement we had done business with for 20 years, independently owned.

[00:19:04] Speaker 04:
Unlike the Monsanto case, for instance, where the factory at issue was truly a captive factory, this was a third party manufacturer who made independent purchasing decisions.

[00:19:14] Speaker 04:
The type of SNAP or brand of SNAP was never specified.

[00:19:17] Speaker 04:
And so Fossil never purchased any of these SNAPs.

[00:19:21] Speaker 04:
Your honor's mentioned the, I'm sorry, opposing counsel mentioned the Fendi decision.

[00:19:37] Speaker 04:
Obviously, the Fendi decision is a summary decision.

[00:19:39] Speaker 04:
It was used in the brief to suggest that the Second Circuit has somehow acknowledged there's this open question that's just not the case.

[00:19:48] Speaker 04:
The Second Circuit and Fendi

[00:19:49] Speaker 04:
was simply acknowledging that counsel was making an argument and that the question had been raised to them, but they didn't need to decide it because, of course, willfulness had already been found on summary judgment in that case.

[00:20:02] Speaker 04:
And finally, to briefly address what we received late in the day on Wednesday, the Mamamides Supplemental Authority, we agree it stands for a very unremarkable proposition.

[00:20:12] Speaker 04:
It doesn't confirm anything or affirm anything.

[00:20:14] Speaker 04:
It simply cites a 1983 Supreme Court case, stands for the unremarkable proposition,

[00:20:19] Speaker 04:
that different words mean different things.

[00:20:21] Speaker 04:
And if Your Honor is having any questions with respect to the willfulness, non-willfulness argument in the 99 amendments.

[00:20:26] Speaker 01:
You might have a harder case if Congress had enacted this statute all at once.

[00:20:31] Speaker 01:
Absolutely.

[00:20:31] Speaker 01:
And used willful in one part and not willful in another.

[00:20:34] Speaker 04:
That's absolutely the case, Your Honor.

[00:20:36] Speaker 04:
If this was a fresh statute that had been enacted with no prior history, no common law history, no legislative history, all fresh, written as it appears now, that's absolutely the case.

[00:20:48] Speaker 04:
However, that's not the case.

[00:20:50] Speaker 04:
This is a statute that has a long, rich history, both interpretations from the Supreme Court and many interpretations from the Second Circuit.

[00:20:59] Speaker 04:
And I see that I've gone into my reserve.

[00:21:02] Speaker 04:
So if you have any other further questions, please let me know.

[00:21:08] Speaker 02:
All right.

[00:21:08] Speaker 02:
Thank you.

[00:21:09] Speaker 02:
Thank you.

[00:21:13] Speaker 05:
Your Honor, I'd like to start with that last point, the question of what the courts would do and what this court should do.

[00:21:18] Speaker 03:
Mr. Chairman, I want you to start with what I asked, which is I want you to address the pattern of business with which your client acted, the filing of word-for-word similar affidavits at almost precisely similar times

[00:21:42] Speaker 03:
in the sales year in which the president of your clients swore to certain things that appeared to me to be patently in bad faith.

[00:21:53] Speaker 05:
Yes, Your Honor.

[00:21:54] Speaker 05:
The district court found that the principle of ROMAG had, in fact, not been truthful on the stand with regard to that.

[00:22:03] Speaker 05:
And as a result, she said that she would reduce the award by 18%, which was the amount of time from when he learned that these were, in fact, counterfeit snaps until the time

[00:22:11] Speaker 05:
that he sued because it was her view that he had timed the suit to come before Black Friday, so she would not allow a recovery of profits or damages for that period.

[00:22:19] Speaker 05:
That's not on appeal before this court, in part, obviously, because of the standard of review of such things.

[00:22:27] Speaker 05:
So that's the answer as to that, Your Honor.

[00:22:29] Speaker 05:
It appears, I was not trial counsel, but it appears there was a boilerplate affidavit that had been previously used and perhaps to save expenses was used again.

[00:22:37] Speaker 05:
I honestly don't know.

[00:22:38] Speaker 05:
But in any event, the court already took care of that,

[00:22:41] Speaker 05:
on review.

[00:22:43] Speaker 05:
I do want to go to this question of all at once.

[00:22:44] Speaker 05:
Of course, it would be the Second Circuit's obligation, and it's this court's obligation, to construe the statute as it stands now all at once.

[00:22:51] Speaker 05:
It has to be construed harmoniously, not in a piecemeal manner.

[00:22:55] Speaker 05:
And all at once, there are, of course, exceptions for innocent infringers and enhanced damages for willful violators.

[00:23:02] Speaker 05:
So it can't be that profits can be available only if there is willfulness.

[00:23:07] Speaker 05:
It can be and is an important factor in the Pebble Beach analysis that Mr. Dupler mentioned and in the analysis that seven of the circuit courts now use, which is the traditional equitable balancing that the Supreme Court recently affirmed in Octane Fitness is the correct approach to use when looking at Congress's textual commitment to equity.

[00:23:30] Speaker 05:
And here we have multiple textual commitments to equity in the statute.

[00:23:33] Speaker 05:
It says, there's specific mention in 1117A

[00:23:37] Speaker 05:
the circumstances of the case, to what the court believes is just.

[00:23:41] Speaker 05:
And of course, there's the distinction between infringement and willful infringement.

[00:23:45] Speaker 05:
As to the George Prudential issues, the question of what this court should do in light of George Bash's interpretation of the previous language of the statute, the now superseded language of the statute, I would point out that other circuit courts have done the same thing.

[00:23:59] Speaker 05:
The Third Circuit in Banjo Buddies, the Third Circuit had previously held that willfulness was a requirement.

[00:24:04] Speaker 05:
It then said, as the Second Circuit did in Fendi, the question's open.

[00:24:08] Speaker 05:
And then the next time the question came before it and it needed to be resolved, it said, willfulness is not required.

[00:24:13] Speaker 05:
That's clear under the language of the statute.

[00:24:15] Speaker 05:
As things stand right now, seven of the courts of appeals have that position.

[00:24:19] Speaker 05:
Only one, the Tenth Circuit, has after the 1999 amendment come to the conclusion that the old willfulness standard still stands.

[00:24:26] Speaker 05:
Now, with regard to the question of the principles of equity and whether prior to the

[00:24:31] Speaker 05:
enactment of the Lanham Act, they required willfulness.

[00:24:34] Speaker 05:
I point your attention to the Mishawaka case by the US Supreme Court, which was decided just four years before the Lanham Act was enacted.

[00:24:43] Speaker 05:
In that case, the Supreme Court clearly permitted an order, profits in a trademark infringement case, despite there being no willfulness.

[00:24:53] Speaker 02:
So we're supposed to disregard the Second Circuit decisions because a spread court decision that came long before them is inconsistent with that?

[00:25:01] Speaker 05:
No, Your Honor, I'm responding here to Mr. Dupler's argument that somehow the principles of equity were brought into the statute at the time of its enactment, and those necessarily require willfulness.

[00:25:12] Speaker 05:
I'm saying we know that's not true, but what I'm asking you to do is to say that the Second Circuit, on the language of the statute as it currently exists, and under the Supreme Court's directive in octane fitness, that discretion be given to the courts and not restrained through overly rigid frameworks, as a willfulness requirement is on this statutory text.

[00:25:30] Speaker 05:
I'm asking you to find that willfulness is not required.

[00:25:33] Speaker 05:
The Second Circuit would not find it required.

[00:25:43] Speaker 05:
Returning for a moment to the jurisprudential question, because obviously this court is concerned about its longstanding principle of interpreting the law in accord with the regional circuit when it's a non-patent doctrine.

[00:25:57] Speaker 05:
I want to point out again that Banjo Buddies switched, and it didn't need to go en banc to do so.

[00:26:01] Speaker 05:
And the Second Circuit precedent itself, as we've pointed out in our briefs in the Mercouris case, United States versus Mercouris, and in the Prober case, United States versus Prober, has said, when an argument wasn't presented to a prior panel, or when the law has changed in the interim, a panel does not need to go en banc in order to come to a different conclusion than the previous panel.

[00:26:24] Speaker 05:
In both Prober and Mercouris, the court said,

[00:26:27] Speaker 05:
a subsequent panel can interpret and decide what was never interpreted or decided by our court in the past, by a previous panel of our court.

[00:26:36] Speaker 05:
They did so.

[00:26:37] Speaker 05:
And in neither of those cases was there a statutory change.

[00:26:40] Speaker 05:
In one case, it was just different arguments that hadn't been presented to the court.

[00:26:44] Speaker 05:
And in the other, it was an intervening change in precedent, in Supreme Court precedent.

[00:26:48] Speaker 05:
Here we have something clearer, I would posit, which is the statutory change itself.

[00:26:54] Speaker 05:
And that is why, of course, some of the district courts in the Second Circuit have themselves found themselves able to find that under the current language of the Latom Acts, there is no bright line, rigid, formalistic willfulness requirement.

[00:27:07] Speaker 05:
It is merely as the overwhelming majority of circuits now hold one of the factors for the court to consider when balancing the equities.

[00:27:16] Speaker 05:
Unless there are any further questions.

[00:27:18] Speaker 05:
Thank you, Your Honors.

[00:27:24] Speaker 04:
Your Honor, I understand the cross-appeal was not discussed and my rebuttal would be limited to that unless the court has any questions regarding the cross-appeal.

[00:27:33] Speaker 02:
No, I'll adjust that it seems to be an improper cross-appeal because it's giving another ground for not awarding lost profits.

[00:27:40] Speaker 04:
Well, Your Honor, it was done, it's certainly a conditional cross-appeal.

[00:27:43] Speaker 04:
We did not understand it and we didn't certainly intend it to be considered an improper cross-appeal.

[00:27:48] Speaker 04:
It was done as a protective measure in the event and the unlikely, hopefully unlikely, invent of a remand

[00:27:53] Speaker 04:
because the deterrence award or the advisory deterrence award that was there was seriously flawed.

[00:28:01] Speaker 04:
And if there were to be a remand, the district judge would need to understand, hopefully this court would instruct it so.

[00:28:07] Speaker 04:
We were trying to expand our rights under the judgment and decrease ROMAX in the event of a remand, strictly in the event of a remand.

[00:28:16] Speaker 02:
Thank you, Your Honor.

[00:28:18] Speaker 02:
I thank both counsels.

[00:28:18] Speaker 02:
The case is submitted.