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Derek Andrew, Inc v. Poof Apparel Corporation
No. 07-35048; D.C. No. CV-05-01136-JPD
United States Court of Appeals for the Ninth Circuit


CA Deleted Statutory Damages in Infringment Case

Derek Andrew, Inc. (Andrew) and Poof Apparel Corporation (Poof) are corporations engaged in the apparel business. In 15 June 2005, Andrew caused the registration with the US Copyright Office of the “hang tag” featuring “Heart Design” and “Twisted Heart” trademarks for its line of casual sportswear for woman. The hang tag was developed and first used in 2003.

In 2005, a garment bearing hang-tags nearly identical to Andrew’s “Twisted Heart” hang-tags came into Andrew’s possession. The only difference being the word “Poof!” in place of the words “Twisted Heart”.

Andrew filed a complaint for copyright and trademark infringement and state law claims against Poof. After trial, the court found that the disgorgement of profits was the appropriate measure of damages and awarded Andrew $685,307.70 as to state claims.

As to copyright claim, Andrew was awarded $15,000 in statutory damages. Poof was also permanently enjoined from further infringing upon Andrew’s trademarks.

The trial court also awarded attorney’s fees in the amount of $296,090.50 and $6,678.60 in costs.

At issue in this case is the propriety of the award of statutory damages and attorney’s fees under the Copyright Act.

The US Court of Appeals for the Ninth Circuit held that Section 412(2) mandates that in order to recover statutory damages, the copyrighted work must have been registered prior to the commencement of the infringement, unless the registration is made within three months after first publication of the work.

In this case, Andrew’s copyright registration became effective on 15 June 2005, while the initial act of infringement occurred on 5 May 2005. The Twisted Heart hang-tag was thus infringed by Poof before the registration took effect.

As to the award of attorney’s fees, the Court deemed it proper to remand the case to the district court because it was unclear whether the award of fees may have included fees related to Andrew’s Copyright Claim Act.

In sum, the Court reversed the statutory damages awarded under the Copyright Act and remanded the issue of attorney’s fees to the lower court.


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