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Scott Mollen

Landlord Hit with $1.1 Million Statutory Damage Award Based on Building’s Connection with Counterfeiting and Trademark Violations—Landlord Was Willfully Blind as to the Identity of Potential Infringers—Plaintiff Need Not Show Actual Damages Since It Only Claimed Statutory Damages Which Were Permitted by the Lanham Act

A building owner (landlord) appealed from a judgment which awarded $1.1 million in statutory damages to a plaintiff watch manufacturer, based on the landlord’s “contributory infringement” of the plaintiff’s trademarks, arising from the sales of counterfeit watches at the owner’s property in Manhattan. The landlord challenged the trial court’s denial of its pre-trial motion for summary judgment, jury instructions on the elements of contributory infringement, numerous evidentiary rulings and the scope of a permanent injunction. The United States Court of Appeals (Second Circuit) (Court) affirmed the trial court judgment and injunction. One judge concurred in part and dissented in part.

Following a jury trial, which included evidence that the landlord “knew of counterfeiting at its leased…property for years, a jury awarded $1.1 million in statutory damages” to the plaintiff, a watch company, based on the landlord’s “contributory infringement of (plaintiff’s) trademarks.” On appeal, the landlord primarily argued that the trial court failed to require the plaintiff “to identify a specific vendor to whom (landlord) continued to lease property despite knowing or having reason to know of counterfeiting by that same vendor.”

The court rejected the landlord’s appeal based on the trial court’s denial of the landlord’s pre-trial motion for summary judgment. It found that such “interlocutory decision is not appealable,” stateing that “once the case proceeds to a full trial on the merits, the trial record supersedes the record existing at the time of the summary-judgment motion, and there’s no basis for this court to review issues raised in a denied motion overtaken by trial.”

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