# Reply Brief — Super Duper, Inc. v. Mattel, Inc.

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_2705%3A4

## Record

- **Collection:** Supreme Court brief
- **Document type:** Reply Brief
- **Published:** January 1, 2011
- **Citation:** 562 U.S. 1179

## Text

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LABLE OF AUTHORITIE:

rREDERAL CASES

Duncan v. Walker,
533 U.S. 167 (2001)

George Basch Co. v. Blue Coral, In
968 F.2d 15382 (2d Cir. 1992)

Henry v. Pro 10 Originals, LLC,
698 F. Supp. 2d 1279 (D. Wyo. 2010)..

Inmates of Allegheny County Jail v. Wecht
93 F.3d 1124 (3d Cir. 1996)

Kassbaum v. Steppenwolf Prods., Inc
236 F.3d 487 (9th Cir. 2000)

Lebron v. Natl R.R. Passenger Corp
513 U.S. 374 (1995)

Malletier v. Dooney & Bourke, Inc.,
500 F. Supp. 2d 276 (S.D.N.Y. 2007)

Mr. Water Heater Enters., Inc. v. 1-800-Hot
Water Heater, LLC,
648 F. Supp. 2d 576 (S.D.N.Y. 2009)

Nike, Inc. v. Top Brand Co.
No. 00-civ-8179, 2005 WL 1654859
(S.D.N.Y. July 13, 2005)

Pedinol Pharmacal, Inc. v. Rising Pharms
Inc.,
570 F. Supp. 2d 498 (f.D.N.Y. 2008)

Pennsylvania Dep't Corrs. v. Yeskey,
924 U.S. 206 (1998)

Reed v. Ross,
468 U.S. 1 (1984). 12

Stevens v. Dep't of Treasury,
500 U.S. 1 (1991)......... 1]

Synergistic Intl, LLC v. Korman,
470 F.3d 162 (4th Cir. 2006) ...... Z

Super Duper, Inc. v. Mattel, Inc., No. 6:05-CV
01700-HFF (D.S.C. Sept. 18, 2007) .. 1Q

Super Duper, Inc. v. Mattel, Inc., No. 09-1397
(4th Cir. Oct. 27, 2009) yeaa 3)

Tamko Roofing Prods., Inc. v. Ideal Roofing
Co :
282 F.3d 23 (1st Cir. 2002) o

United States v. Williams,
504 U.S. 36 (1992) . 12

Venture Tape Corp. v. McGills Glass
Warehouse,
540 F.3d 56 (1st Cir. 2008).. O

W. Diversified Servs., Inc. v. Hyundai Motor
Am., Inc.,

127 F.3d 1269 (10th Cir. 2005)

STATUTES

15 U.S.C. § 1117(a) ep

> 1125(a)

S.
sam
LI.

15 U.S.C. § 1125(c)

28 U.S.C. § 2244(d))

MISCELLANEOUS

J. THOMAS MCCARTHY, MCCARTHY ON
TRADEMARK AND UNFAIR COMPETITION
§ 30 (4th ed. Supp. 2010)..

REPLY IN SUPPORT OF PETITION
FOR WRIT OF CERTIORARI

There are several key areas of agreement
between Super Duper and Mattel. Mattel never
disputes that the question presented - the criteria
for awarding “profits” for trademark infringement
is a question of enormous practical significance. As
the petition explains without comment from Mattel,
virtually every one of the thousands of trademark
actions filed each year seeks to recover the
defendant's profits from the infringement. Pet. 24-
26. Mattel also agrees that for many years there
was a “circuit spht” on the criteria for awarding
trademark profits. Resp. 17, 18, 21. Although
Mattel incorrectly argues that an amendment to the
profits provision governing trademark dilution
resolved the long-standing split on the criteria for
profits from trademark infringement, the leading
treatise on trademark law expressly declares that
description of Congressional intent “inaccurate.”

Mattel’s principal arguments against review rely
on inaccurate characterizations of this lhtigation.
Only by resort to the most permissive criteria for
awarding profits, criteria that require proof of
neither willful infringement nor actual customer
confusion, could the Fourth Circuit affirm the
district court’s million dollar profits award in this

infringement case.

*)

—~

THE CIRCUITS ARE DIVIDED OVER
THE CRITERIA FOR AWARDING
PROFITS UNDER THE LANHAM ACT

Mattel tellingly devotes only belated attention to
the circuit split, electing to begin its discussion on
page 17. Mattel’s hesitancy is well-founded.

The linchpin of Mattel’s circuit discussion is the
suggestion that a 1999 amendment to the trademark
dilution profits statute rendered all the case law
regarding trademark infringement profits magically
uniform in lght of Congress’s “clear” (Resp. 17)
directive.

As a matter of legislative interpretation, Mattel’s
position is meritless. The petition explains (Pet. 19-
20) that in 1999 Congress amended 15 U.S.C.
§ 1117(a) to permit a monetary award only for
“willful” dilution under 15 U.S.C. § 1125(c) (“1999
Dilution Amendment”). This amendment did not
touch the standard for an award of profits for
infringement under 15 U.S.C. § 1125(a). Congress
did not need to make the willfulness requirement
explicit in section 1117(a) because “it is not only
appropriate but also realistic to presume. that
Congress was thoroughly familiar with
precedents from this and other federal courts and
that it expected its enactment to be interpreted in
conformity with them.” Cannon v. Univ. of Chicago,
441 U.S. 677, 699 (1979). See Pet. 18-19.

Mattel gets no support from Duncan v. Walker,
533 U.S. 167 (2001). See Resp. 19. In Duncan, at

issue was the meaning of a_ tolling provision

3

triggered by an “application for State post-conviction
or other collateral review” pursuant to 28 U.S.C.
§ 2244(d)(2). 533 U.S. at 169. Because the text in
nearby provisions specified “Federal” review while
the tolling provision did not so specify, the Court
construed the tolling provision not to provide for
federal review. Jd. at 173. Here, the relevant text
on infringement profits codified the preexisting
judicial understanding of the criteria for awarding
infringement profits. Nothing in Duncan suggests
that such a codification is displaced when Congress
subsequently enacts a separate provision.

In any event, Mattel’s suggestion that the 1999
Dilution Amendment has resolved the split is not an
accurate description of the circuit case law. The
petition describes how the Third, Sixth and Seventh
Circuits have rejected both intentional infringement
and actual confusion as prerequisites for an award of
profits. Pet. 11-13. On the other side of the split,
the petition describes how the First, Second, Ninth,
Tenth, District of Columbia and Federal Circuits all
require either intentional infringement or actual
confusion or both before awarding the defendant’s
profits. Pet. 13-16.

Mattel makes no comment on the Sixth, Seventh
and Tenth Circuit case law cited by the petition. See
Pet. 11-12.! Mattel notes that the Fourth and Fifth

1 See also W. Diversified Servs., Inc. v. Hyundai Motor Am..,
Inc., 427 F.3d 1269, 1273 (10th Cir. 2005) (“[WJe require a
showing that Defendant’s actions were willful to support an
award of profits under 15 U.S.C. § 1117(a)”); Henry v. Pro 10
Originals, LLC, 698 F. Supp. 2d 1279, 1300-01 (D. Wyo. 2010)
(“[T]his circuit holds that an award of a defendant’s profits

4

Circuits’ referred to the 1999 Dilution Amendment.
Resp. 20. But to the extent these circuit courts have
used the dilution amendment to justify their views,
the split has merely become more, not less,
entrenched. Mattel says little regarding the D.C.
Circuit, noting only (Resp. 23) that the D.C. Circunt
had not specifically ruled that actual confusion was
required but not refuting that the D.C. Circuit has

held that it would not award profits in the absence of

a causal link between profits and infringement, a
holding that necessarily requires proof of actual
confusion.2 And, as to the Federal Circuit, Mattel’s
response emphasizes that the Federal Circuit was
applying Eighth Circuit Jaw and did so incorrectly.
Resp. 23. But even if accurate, that would merely
confirm that the circuit courts are in disagreement
about the proper criteria for awarding infringement
profits.

Mattel highlights that the Third Circuit used to
hold that willfulness was a requirement, but pegged
its change of heart to the 1999 Dilution Amendment.
Resp. 19 (discussing Banjo Buddies, Inc. v. Renosky,
399 F.3d 168 (38d Cir. 2005)). In doing so, however,

the Third Circuit expressly recognized the “wealth of

‘requires a showing that defendant's actions were willful or in
bad faith”) (citing Bishop v. Equinox Intl Corp., 154 F.3d 1220,

1223 (10th Cir. 1998)); Cache La Poudre Feeds, LLC v. Land O’

Lakes, Inc., No. 04-cev-329, 2007 WL 2521116 (D. Colo. Aug. 31,

2007) (“The Tenth Circuit further stated that a finding of

willfulness ts required to support an award of profits.”).

2 See also Breaking the Chain Found., Inc. v. Capitol Educ.
Support, Inc., 625 F. Supp. 2d 1, 2 (D.D.C. 2009) (“To recover a
defendant’s profits under the Lanham Act, the plaintiff must
show the defendant acted ‘willfully or in bad faith.”) (internal

citations omitted)

contrary authority” in other circuits. Banjo Buddies,
399 F.3d at 174.

Moreover, the leading scholar in trademark law
has expressly rejected the reasoning of the Banjo
Buddies’ decision, concluding that the 1999
Amendment did not “removie] willfulness as a
requirement for an award of profits in a classic
infringement case.” 5 od. THOMAS MCCARTHY,
MCCARTHY ON TRADEMARK AND UNFAIR COMPETITION
§ 30:62 (4th ed. Supp. 2010) (“courts have leveraged
this statutory change beyond its intended scope to
adjust the equities in ordinary infringement cases in
order to make it easier for a trademark owner to
recover profits.”). Mattel asserts that this is
Professor McCarthy’s “personal view” (Resp. 21 n.5),
but McCarthy writes: “By 2005, a split of authority
developed such that while most circuits required
some showing of wuilfulness, the Third and Fifth
(and perhaps the Seventh and Eleventh) held that
while relevant, willfulness was not essential or
indispensable to a recovery of profits.” Jd.

As to the First Circuit's decision in Venture Tape
Corp. v. McGills Glass Warehouse, 540 F.3d 56 (1st
Cir. 2008), cited by Mattel, that decision did not
disturb the wilfulness requirement stated in Jamko
Roofing Prods., Inc. v. Ideal Roofing Co., 282 F.3d
23, 36 n.11 (1st Cir. 2002)

As to the Second Circuit, Mattel cites a single
district court decision, Nike, Inc. v. Top Brand Co.,
No. 00-civ-8179, 2005 WL 1654859 (S.D.N.Y. July
13, 2005), that 1s demonstrably out of step with
Second Circuit law. Since Nike, numerous district

6

courts in the Second Circuit have continued to follow
George Basch Co. v. Blue Coral, Inc., 968 F.2d 1532
(2d Cir. 1992), see Pet. 14, while expressly rejecting
Nike. See, e.g., Pedinol Pharmacal, Inc. v. Rising
Pharms., Inc., 570 F. Supp. 2d 498, 503 (E.D.NLY.
2008) (“court holds, therefore, that the Second
Cireuit’s interpretation of Section 1117(a) in Basch,
which construed the same statutory language that
existed prior to the 1999 Amendment of the statute,
remains good law”); Malletier v. Dooney & Bourke,
Inc., 500 F. Supp. 2d 276, 281 (S.D.N.Y. 2007)
(“addition of ‘willful violation under section 1125(c),’
does not indicate that 1t was Congress’s intention to
simultaneously sub silentio overturn the weight of
authority with respect to section 1125(a)”) Gnternal
citation omitted); Mr. Water Heater Enters., Inc. v. ]-
800-Hot Water Heater, LLC, 648 F. Supp. 2d 576,
590 (S.D.N.Y. 2009).

As to the Ninth Circuit, Mattel again highlights a
one-off district court opinion. Resp. 20. But, since
1999, the Ninth Circuit has restated its requirement
of willfulness on at least two occasions. See Contessa
Food Prods. Inc v. Lockpur Fish Processing Co., 123
Fed. Appx. 747, 751 (9th Cir. 2005) (“[Wle deny
Contessa’s request for disgorgement of profits
because of an absence of any evidence supporting a
reasonable inference that any of the Defendants
wilfully infringed its alleged trademark”);
Kassbaum v. Steppenwolf Prods., Inc., 236 F.3d 487,
492 (9th Cir. 2000) (“Actual consumer confusion is
not required for profit recovery; it is sufficient to
show a likelihood of confusion combined with willful
infringement.”). Consequently, district courts in the
Ninth Circuit have continued to require willful

‘

infringement for an award of profits. See also
Bellagio Jewelry, Inc. v. Croton Watch Co., No. CV
06-6672, 2008 WL 3905895, at *12 (C.D. Cal. Aug.
20, 2008) (“Generally, a plaintiff must establish that
the defendant engaged in willful misconduct to
obtain a defendant’s profits.”).

Il. THIS CASE IS AN IDEAL VEHICLE TO
CLARIFY THE CRITERIA FOR
AWARDING PROFITS UNDER THE
LANHAM ACT

Mattel saves most of its effort for a rambunctious
attempt to show that the question presented is not
suitably presented. Resp. 11-17. By any objective
analysis, however, the criteria for awarding
trademark profits is squarely presented in this case
where the jury’ found neither intentional!
infringement nor actual confusion yet the district
court awarded $1 mullion in trademark protits and
the Fourth Circuit summarily affirmed based solely
on the trademark infringement finding. Matte’
notes (Resp. 11) the numerous issues that Super
Duper is “not challenging,” inadvertently confirming
that this is suitable vehicle for considering the
important questions presented.

a. Mattel’s reading of the jury verdict form is
refuted by the form itself. Mattel denies that the
jury found Super Duper’s infringement not
intentional. Resp. 13-14. But the jury answered
“no” to the question “Do you find that Super Duper’s
infringement and unfair competition was
intentional?” App. 43a. Mattel argues that, given
the jury’s answer of “no” to Question 2 (which asked

re

whether Super Duper committed unfair
competition), the jury's answer of “no” to Question 3
was inevitable given the conjunctive phrasing of
Question 3. Resp. 13. But Question 2 of the verdict
form instructs the jury that “If you answer NO,
proceed to Question 5.” App. 43a. The jury,
therefore, would not have answered Question 3 if it
had answered “no” to Question 2. Only because the
jury had answered “yes” to Question 1 (which asked
whether Super Duper committed infringement) did
the jury answer Question 3 (regarding intent) in the
negative. App. 42a.

Similarly, Mattel’s belated suggestion that the
jury found actual confusion is wrong. Even a cursory
review of the record leaves no doubt as to the
absence of any evidence of actual confusion. See,
e.g., J.A. 514, 763 (“I haven’t been confused”); 733 (in
twenty years had “never seen any sign of confusion”);
983 (Super Duper’s unrebutted expert testimony

3 Mattel selectively quotes from the record in an
unpersuasive post-hoc effort to establish willful infringement
The opinion of counsel that Mattel highlights (Resp. 4)

approved Super Duper’s mark. J.A. 1542-43 (“[I]t is our
opinion that your proposed mark SEE IT! SAY IT! is available
for your use and registration.”). Although Super Duper

“engaged different outside counsel” the following year (Resp. 4),
this was because the trademark attorney had died. J.A. 823
(“Ralph got suddenly terminally il] and he passed away
sometime in 2002, 2001, and we had to go to a new trademark
attorney.”). Mr. Webber’s “numerous sworn statements,” which
concerned his familiarity with the SEE ‘N SAY marks
specifically, were not shown to be false by any later admission
See J.A. 869 (“I didn’t realize that the SEE ‘N SAY was that
little pull toy. . . It just didn’t mean anything to me in 1997 in

connection with the name being a pull toy.”)

that “since 1987 they have been in the marketplace
together, and you don’t have any evidence of
confusion”). For this reason, Mattel did not claim
lost sales at trial. J.A. 1278-79 (“[Wle are saying we
are only claiming defendant’s profits. We are not
claiming actual damages through lost sales of
Mattel. We are not claiming that.”). The district
court expressly ruled actual confusion not relevant
App. 27a (“Factor two, whether sales been diverted
is Inapplhicable.”). Mattel agreed. Brief of Appellee
Mattel, Inc. at 56, Super Duper, Inc. v. Mattel,
Inc., No. 09-1397 (4th Cir. Oct. 27, 2009), ECF
No. 33. (“The district court correctly determined
that the second factor whether sales have been
diverted — was inapplicable"). The Fourth Circuit’:
opinion also assumes no actual confusion finding
App. 5a (“inference to be drawn from Mattel’s lack
of evidence of actual confusion”) (emphasi;
added)

Tellingly, Mattel ignores the photograph:
depicting Super Duper's educational product next to
Mattel’s toy. See Pet. 5-6. By its silence, Mattel
concedes what leaps off the page: the products look
nothing alike. As the amicus brief filed in support of
Super Duper’s petition confirms, Super Duper is
known and loved among the_ special needs
community, not because it peddles knocks-offs of
pull-toys — in fact, it does not sell a single pull-toy
but because its products are innovative and the state
of their art, having helped many children overcome
challenges that range from simple stuttering to
severe apraxia. See J.A. 532-34, 551-63. Moreover,
as Mattel argued during the course of this litigation,

“other trademarks have no bearing upon any fact

that 1s pertinent to the ultimate resolution of thi
action.” Defendant and Counterclaimant's Motion in
Limine No. 6 at 4, Super Duper, Inc. v. Mattel
Inc., No. 6:05-CV-01700-HFF (D.8.C. Sept. 18, 2007)
ECF No. 212 Accord App. 27a (district court
“considered only” conduct “that is the subject of thi

ult)

b. Mattel mischaracterizes the decision below in
arguing that the Fourth Circuit's affirmance of the
profits award was also “based on Super Duper
waiver of any challenge to basing the profits award

on dilution.” Resp. 16 n.3

Contrary to Mattel’s suggestion, the sole reason
the Fourth Circuit affirmed the profits award below
was its (mistaken) view of the infringement profit:
provision As the petition explains (Pet. 9), the
Fourth Circuit found the dilution error waived and
thus reviewed “this issue only for plain error.” App
13a. The Court declined to “exercise [its] discretion
to correct the [dilution] error,” solely because the
“award of profits and attorneys fees and costs in thi:
case was independently justified by the jury’s
“infringement” finding App. l13a-l4a (emphasi
added). Because the district court was permitted, in
the Fourth Circuit's view, to award profits based on
infringement, it would not correct the legal error

Super Duper has simply failed to establish that the

district court's award of lost profits would have
differed had it not considered the jury’s finding of
trademark dilution.” App. 14a. Thus, only because
the infringement profits were found proper did the
court decline to use its plain error authority to

correct the error on dilution

vViattel al misinvoke tn) _ourt Walvel

rule Mattel cite Walver case whnere tne } ue
presented to this Court was never ruled on by th
court of appeal and did not constitute well-settl

law in the circuit. See Adickes vu. S.H. Kress & Co
98 U.S. 144 (1970) (declining to consider overruling
the Civil Right (Case where circuit had not
addre ed question) Pennsylvania Dep't (Lor?

Yeskey, 524 U.S. 206, 212 (1998) (declining to reviev
whether the Amencan Disabiliti Act applicati n
LO tate prison } a constitutional exerciss oO]
Congre power under either the Commerce Claus
or the 14th Amendment; circuit authority had not
ruled on the question ee Inmates of Allegheny

County Jail Wecht 93 F.3d 1124 (3d Cu
1996)) Here tne } ue wa pa eda on bot! U!
ise and i prior circult irt dec i(
he district court awarded the infringem«:
protit (App 25a-26a) and the Ourt of appeal
iffirmed the award (App. 14a) The question

whether the infringement profits award 1s proper
thu quarely pre ented. See, e.g., Stevens t Dep't yf

’

freasury, 500 U.S. 1. & (1991) (The Distmect Cour

heard the case on the merit The Court
Appeals in its turn specifically referred [to the
timeline question We thu ar¢ itishied that
the ue is properly befor
Moreover. the Fourth Cuircult posit the

question presented | lear As the petition ¢ xplain
ind as Mattel does not deny, the Fourth Circuit ha
clearly decided that intentional infringement and
actual confusion are not required lor an award
niringvement rotit Pet 1d ee Synerevistic /nt

| )

LLC v. Korman, 470 F.3d 162, 175 (4th Cir. 2006)
Here, the Fourth Circuit apphed that settled and
binding circuit law in an unpubhshed disposition
Add. 15a n.8 (discussing Syneryistic). Thus, it
matters not that Super Duper did not previously
press the proper criteria for trademark
infringement. The court of appeals had ruled on the
issue previously and applied that ruling 1n this case
See Lebron v. Natl R.R. Passenger Corp., 513 U.S
374, 379 (1995) (“Our practice ‘permit[]s review of an
issue not pressed so long as 1t has been passed upon

(citations omitted); United States v. Williams,
504 U.S. 36, 41 (1992) (“permitting review of an
issue not pressed so long as it has been passed

upon”). Any effort by Super Duper to raise these

issues below would have been futile. See Reed
Ross, 468 U.S. 1, 16-20 (1984)

13
CONCLUSION
lhe petition for review should be granted

Respectfully submitted

THOMAS ZELLERBACH KH. JOSHUA ROSENKRANZ
KHAI LEQUANG Counsel of Record
ORRICK, HERRINGTON MARK DAVIES

& SUTCLIFFE LLP ORRICK, HERRINGTON
1000 Marsh Road & SUTCLIFFE LLP
Menlo Park, CA 9402! 51 West 52nd Street
(650) 614-7400 New York, NY 10103

rosenkranz@orrick.com
(212) 506-5000

December ous

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_2705%3A4. Public record. Not legal advice.