The U. S. Court of Appeals for the Federal Circuit vacated an award of damages for trademark infringement based on a finding of impermissible double recovery because the plaintiff had already been awarded patent damages on the same set of operative facts. Aero Products International, Inc. v. Intex Recreation Corp., Case No. 05-1283 (Fed. Cir., Oct. 2, 2006) (Schall, J.).
Aero Products asserted both patent and trademark claims. Following a jury trial, the district court entered a judgment of infringement and validity in favor of Aero and ordered a permanent injunction. The damages totaled $6.9 million; $2.95 million was awarded for patent infringement damages, which the district court doubled based upon the jury’s finding of willful infringement, and $1 million was awarded for trademark infringement. Intex Recreation appealed.
The Federal Circuit, finding the damage award represented an impermissible double recovery, vacated the trademark infringement damages. Aero Products argued that the district court’s award of damages was properly allotted between two different wrongdoings, granting a reasonable royalty for patent infringement and a portion of the defendant’s profits for infringement of the "ONE TOUCH" trademark. The Federal Circuit disagreed, finding that on the facts of the case, Aero Products’ recovery of both patent and trademark infringement damages based on the same operative facts amounted to an impermissible double recovery.
First, addressing the appellate jurisdictional question the Court determined that, although the damages question involved trademark law, the unique characteristics of patent damages are properly resolved under Federal Circuit law. Turning to the merits, the Court noted that "double recovery of damages is impermissible," explaining that "[t]he law is clear that the jury may award separate damages for each claim, ‘leaving it to the judge to make appropriate adjustments to avoid double recovery.’"
Aero Products based both its patent and trademark damages solely on sales of the accused mattresses, relying on no other evidence in support of its trademark damages. The Federal Circuit found the only use of the trademark was in connection with the sales of mattresses, which were the same mattresses that formed the basis for Aero Products’ patent infringement claim. The Federal Circuit reasoned that "all of the damages awarded to Aero flowed from the same operative facts: sales of the infringing Intex mattresses." As such, Aero was "fully compensated for defendants’ patent infringement when it was awarded a reasonable royalty for patent infringement based on sales of the infringing Intex mattresses. It could not also be awarded defendants’ profits for trademark infringement based on the same sales of the same accused devices." The court suggested that a Ninth Circuit case in which Nintendo recovered trademark and copyright damages arising from sales of the same video game cartridges was contrary to established Federal Circuit law disallowing double recovery. The Federal Circuit reasoned that "even though damages are claimed based upon separate statutes or causes of action, when the claims arise out of the same set of operative facts, its … there may be only one recovery.’
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