Unpublished Disposition, 841 F.2d 1129 (9th Cir. 1988)

MEMORANDUM^* 

ROBERT J. BRYAN, District Judge, Presiding.

OVERVIEW

Plaintiff-Appellant La Victoria Foods, Inc. (La Victoria) appeals from the judgment of the district court denying its request for damages, profits, costs and attorneys fees in this trademark infringement action against Defendants-Appellees Curtice-Burns, Inc. and La Suprema Distributing Company (Curtice-Burns). We affirm.

La Victoria produces a chili salsa under the registered trademark "Salsa Suprema." In 1984, Curtice-Burns decided to produce a competing salsa under the name "La Suprema." Curtice-Burns ordered a trademark search on "La Suprema" and discovered La Victoria's "Salsa Suprema" mark. It determined that use of the name "La Suprema" would not infringe upon La Victoria's trademark because the visual presentation of the label of the Curtice-Burns salsa was to be highly dissimilar from the one used by La Victoria. Accordingly, Curtice-Burns concluded that consumers would not confuse the two products and began marketing its competing salsa.

Soon thereafter, La Victoria brought this action for trademark infringement. La Victoria sought to enjoin Curtice-Burns from using the La Suprema name. La Victoria also sought damages, profits, costs and attorney's fees under 15 U.S.C. § 1117 (1982) which allows district courts the discretion to award such monetary relief in cases where a "willful" intent to trade upon goodwill is displayed. Bandag, Inc. v. Al Bolser's Tire Stores, Inc., 750 F.2d 903, 917-21 (Fed. Cir. 1984) (applying Ninth Circuit law); see Playboy Enter., Inc. v. Baccarat Clothing Co., 692 F.2d 1272, 1276 (9th Cir. 1982) (attorneys fees awards are only available " 'in exceptional cases, i.e., infringement cases where the acts of infringement can be characterized as ... "willful" ' ") (quoting S.Rep. No. 93-1400, 93rd Cong., 2d Sess. (1974), reprinted in 1974 U.S.Code & Ad.News 7133).

This matter was tried to the court commencing in July of 1986. The court found the La Suprema name infringed La Victoria's trademark. Curtice-Burns was enjoined from using the words "suprema" or "salsa suprema" on its salsa products. The court refused, however, to award La Victoria damages, profits, costs or attorneys fees because it found Curtice-Burns's had not willfully intended to trade upon La Victoria's goodwill. The district court found that "the defendant did not intend to engender confusion between the products or profit or trade on the goodwill of [La Victoria's] product, but simply to market its own product independently. The defendant did not have actual intent to cause confusion, mistake or deception."

La Victoria appeals challenging the propriety of the district court's denial of its request for monetary relief.

La Victoria contends the district court's denial of its request for monetary relief is premised upon two erroneous conclusions of law. First, it contends that the evidence establishes a willful infringement as a matter of law. Second, it contends that the district court's finding that Curtice-Burns did not willfully intend to trade on its goodwill is tainted by the court's failure to view the facts from the correct legal standard.

We review a district court's refusal to award monetary relief under 15 U.S.C. § 1117 for abuse of discretion. Bandag, Inc., 750 F.2d at 917; Playboy Enter., 692 F.2d at 1275. "Abuse of discretion occurs if the district court rests its conclusions ... on erroneous legal conclusions." International Olympic Comm. v. San Francisco Arts & Athletics, 781 F.2d 733, 738 (9th Cir. 1986), modified, 789 F.2d 1319, 1320 (9th Cir. 1986), aff'd, U.S. ----, 107 S. Ct. 2971 (1987); see Shakey's Inc. v. Covalt, 704 F.2d 426, 437 (9th Cir. 1983) ("this court can freely overturn an exercise of discretion based on an erroneous conclusion of law"). We review de novo the question whether the district court's exercise of discretion rests on an erroneous conclusion of law. See Sports Form, Inc. v. United Press Int'l, Inc., 686 F.2d 750, 752 (9th Cir. 1982).

La Victoria claims Curtice-Burns's infringement was willful as a matter of law because "Curtice-Burns offered no objective evidence such as opinion of counsel or consumer survey data in support of its assertion of good faith." La Victoria cites eight patent cases, including Kloster Speedsteel AB v. Crucible Inc., 793 F.2d 1565 (Fed. Cir. 1986), cert. denied sub nom., Stora Kopparbergs Bergslags AB v. Crucible, Inc., --- U.S. ---, 107 S. Ct. 882 (1987), in support of its claim that "objective" evidence of innocent intent, such as evidence of consultation with counsel, is a prerequisite to a finding of non-willful infringement. These cases do not support its claim. Kloster, for example, stands for the opposite proposition. In Kloster, the Federal Circuit held:

Though it is an important consideration, not every failure to seek an opinion of competent counsel will mandate an ultimate finding of willfulness." King Instrument Corp. v. Otari Corp., 767 F.2d 853, 867, 226 USPQ 402, 412 (Fed. Cir. 1985), cert. denied, --- U.S. ----, 106 S. Ct. 1197, 89 L. Ed. 2d 312 (1986) (court "should always look at the totality of the circumstances"). Conversely, that an opinion of counsel was obtained does not always and alone dictate a finding that the infringement was not willful.

Id. at 1579.

Thus, contrary to La Victoria's claim, under the patent law a finding of non-willful infringement does not hinge upon the introduction of objective evidence of innocent intent. Instead, " [a] finding of willful infringement is based on a totality of the circumstances." Orthokinetics, Inc. v. Safety Travel Chairs, Inc., 806 F.2d 1565, 1580 (Fed. Cir. 1986)

Our opinions in the trademark area are in accord with the patent cases on the question of the evidence necessary to sustain a finding of willfulness. We have applied a "totality of the circumstances test" on numerous occasions to uphold findings of non-willful infringement which were supported only by "subjective" declarations of innocent intent. See e.g., Golden Door, Inc. v. Odisho, 646 F.2d 347, 351 (9th Cir. 1980), overruled on other grounds, Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352, 1355 (9th Cir. 1985) (en banc); Alpha Indus., Inc. v. Alpha Steel Tube & Shapes, Inc., 616 F.2d 440, 446 (9th Cir. 1980), overruled on other grounds, Levi Strauss, 778 F.2d at 1355; see also Bandag, Inc. v. Al Bolser's Tire Stores, 750 F.2d 903, 915-21 (overturning an award of damages and attorneys fees on the basis of, inter alia, the infringor's "subjective" declarations of innocent infringement). The district court did not err in finding non-willful infringement on the basis of Curtice-Burns's "subjective" declarations of innocent intent.

Finally, we are not persuaded by La Victoria's reliance on Fleischmann Distilling Corp. v. Maier Brewing Co., 314 F.2d 149 (9th Cir. 1963), where we reversed the district court's finding of non-infringement based on our holding that the district court's finding of subjective good faith was clearly erroneous. In Fleischmann, the court was discussing intent as it related to a finding of infringement; the court specifically acknowledged that its determination did not decide the question of monetary relief. 314 F.2d at 162. In addition, in Fleischmann the marks were identical, whereas here, Curtice-Burns used a somewhat different mark, a fact which tends to support its claim that it did not intend to cause confusion. On these facts, we cannot say that the court erred in declining to hold Curtice-Burns's infringement "willful" as a matter of law.

La Victoria contends the district court failed to view Curtice-Burns's evidence of innocent infringement "with suspicion," as the law requires, but instead "uncritically accepted ... [Curtice-Burns's] bald assertions of subjective good faith." La Victoria acknowledges that the district court properly could have denied it monetary relief even if the court had viewed Curtice-Burns's testimony with suspicion and found the infringement was willful. See Faberge, Inc. v. Saxony Products, Inc., 605 F.2d 426, 429 (9th Cir. 1979) (" [w]illful infringement may support an award of profits to the plaintiff, but does not require one"); International Olympic Comm., 781 F.2d at 738 (an award of attorneys fees is discretionary even in cases which "fit [] within the statutory standard of an exceptional circumstance"). However, it contends that had the court correctly viewed Curtice-Burns's "protestations of innocence" with suspicion, it might have concluded this was an appropriate case for monetary relief. Accordingly, it seeks a remand for a full evidentiary hearing where the proper "suspicion" standard is applied.

La Victoria cites our 1948 decision in Stork Restaurant v. Sahati, 166 F.2d 348 (9th Cir. 1948) in support of its contention that courts must view claims of innocent infringement with suspicion. In Stork, we declared that " 'courts look with suspicion upon one who, in dressing his goods for the market, approaches so near to his successful rival that the public may fail to distinguish between them.' " Id. at 361 (quoting Florence Mfg. Co. v. J.C. Dowd & Co., 178 F. 73, 75 (2d Cir. 1910)).

The record shows that the district court analyzed the evidence with appropriate suspicion. Employment of this standard is clear from the following comment:

... I can't blame La Victoria for being suspicious because of ... the adoption of the "La" along with "Suprema," which has some similarity to La Victoria, and in light of the use of the work "Suprema" in conjunction with salsa. I can't blame them for being suspicious about the motives of ... [Curtice-Burns]. On the other hand, I believe ... [Curtice-Burns's] testimony ... that it ... [was] not their desire to confuse, that that will eventually work against ... [Curtice-Burns], and that ... the motive of the company was not in any way to confuse or try and gain La Victoria's market, but simply was to try and go independently on the marketplace and make their own way and make their own money.

(Emphasis added).

Because the record demonstrates that the district court viewed the facts with the requisite skepticism, it did not abuse its discretion in refusing La Victoria's claim for monetary relief.

AFFIRMED