Weather Underground, Incorporated v. Navigation Catalyst Systems, Incorporated et al

Filing 236

MOTION in Limine to Exclude Discussion of Plaintiff's Actual Damages and of Defendants' Monetary Gain and Brief in Support by Weather Underground, Incorporated. (Patti, Anthony)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN
THE WEATHER UNDERGROUND, INC.,
a Michigan corporation,
Case No. 2:09-cv-10756
Hon. Marianne O. Battani

Plaintiff,
vs.
NAVIGATION CATALYST SYSTEMS, INC.,
a Delaware corporation; BASIC FUSION, INC.,
a Delaware corporation; CONNEXUS CORP.,
a Delaware corporation; and FIRSTLOOK, INC.,
a Delaware corporation,
Defendant.
/
Enrico Schaefer (P43506)
Brian A. Hall (P70865)
TRAVERSE LEGAL, PLC
810 Cottageview Drive, Unit G-20
Traverse City, MI 49686
231-932-0411
[e-mail]
[e-mail]
Lead Counsel for Plaintiff

Nicholas J. Stasevich (P41896)
Benjamin K. Steffans (P69712)
Bruce L. Sendek (P28095)
BUTZEL LONG, PC
150 West Jefferson, Suite 100
Detroit, MI 48226
[phone]
[e-mail]
[e-mail]
[e-mail]
Local Counsel for Defendants

Anthony Patti (P43729)
HOOPER HATHAWAY, P.C.
126 South Main Street
Ann Arbor, MI 48104
734-662-4426
[e-mail]
Co-counsel for Plaintiff

William A. Delgado (admitted pro hac vice)
WILLENKEN WILSON LOH & LIEB LLP
707 Wilshire Blvd., Ste. 3850
Los Angeles, CA 90017
213-955-9240
[e-mail]
Lead Counsel for Defendants
/

PLAINTIFF’S MOTION IN LIMINE TO EXCLUDE DISCUSSION OF PLAINTIFF’S
ACTUAL DAMAGES AND OF DEFENDANTS’ MONETARY GAIN AND BRIEF IN
SUPPORT

NOW COME Plaintiff, by and through counsel, HOOPER HATHAWAY, P.C. and
TRAVERSE LEGAL, PLC and hereby submits its Motion in Limine to Exclude Discussion of
Plaintiff’s Actual Damages and of Defendants’ Monetary Gain and state as follows:
1.

As the Court is already well aware from past motion practice, this case is a

cybersquatting case of the “typosquatting” variety brought against Defendants in connection
with their registration of 274 domains (so far discovered) which were all typographical error
variations of Plaintiff’s registered trademarks.
2.

Discovery has shown that Defendants have registered millions of domain names

which are typographical error variations of marks which are owned by others, including some
of the most famous marks in the country, all designed to take advantage of typing errors made
by consumers who intended to reach the websites of the legitimate mark owners.
3.

Plaintiff has sued Defendants under the Anti-Cyberquatting Consumer

Protection Act (“ACPA”).
4.

Plaintiff has elected statutory damages in lieu of actual damages under 15

U.S.C. § 1117(d) of the ACPA.
5.

Because of this election of remedies, discussion at trial of Plaintiff’s actual

damages or of Defendants’ actual monetary gain off of the particular marks in question is
irrelevant, confusing, prejudicial, and a waste of time. Accordingly, such references should be
excluded from trial under FRE 402 and 403.
6.

Because Defendants’ lead counsel and the undersigned counsel have each been

away from their offices on vacation on back-to-back alternating weeks, they were not able to
hold a conference with respect to this motion; however, they did confer by e-mail and after the
movant explained the nature of the motion and its legal basis, concurrence was denied.

1

Respectfully submitted this 23rd day of February, 2012.

/s/Anthony P. Patti__________
Anthony P. Patti (P43729)
HOOPER HATHAWAY, PC
126 South Main Street
Ann Arbor, MI 48104
734-662-4426
[e-mail]
Co-Counsel for Plaintiff

Enrico Schaefer (P43506)
Brian A. Hall (P70865)
TRAVERSE LEGAL, PLC
810 Cottageview Drive, Unit G-20
Traverse City, MI 49686
231-932-0411
[e-mail]
Lead Counsel for Plaintiff

2

BRIEF IN SUPPORT
Concise Statement of Issues Presented
1.

Whether the Court should exclude discussion of Plaintiff’s actual damages and
of Defendants’ monetary gain at trial under FRE 402 because these damage
items are irrelevant in a case where the plaintiff has elected statutory damages?
Plaintiff answers: YES
Defendants answer: NO

2.

Alternatively, whether the Court should exclude discussion of Plaintiff’s actual
damages and of Defendants’ monetary gain at trial under FRE 403 because the
presentation of such information would be confusing, misleading, prejudicial,
and a waste of time?
Plaintiff answers: YES
Defendants answer: NO

i

Controlling or Most Appropriate Authority for the Relief Sought
15 U.S.C. § 1117(d)……………………………………………………………………………...3
15 U.S.C. § 1125(d)(1)(A)………………………………………………………………………8
FRE 401……………………………………………………………………………………...8, 10
FRE 402………………………………………………………………………………………….8
FRE 403……………………………………………………………………………………...9, 10

ii

Table of Contents
Brief in Support…………………………………………………………………………………..i
Concise Statement of Issues Presented…………………………………………………………..i
Controlling or Most Appropriate Authority for the Relief Sought……………………………...ii
Table of Contents……………………………………………………………………………….iii
Index of Authorities…………………………………………………………………………..iv-v
I.

Factual Background……………………………………………………………………...1

II.

Argument………………………………………………………………………………...2
A.

Plaintiff Has Elected to Recover Statutory Damages……………………………2
1.

The ACPA Provides for an Election of Remedies………………………2

2.

Statutory Damages are Meant to Punish and Deter: Proof of
Actual, Out-of-Pocket Damages is Unnecessary and Often
Extremely Difficult………………………………………………………4
a.
b.

3.

B.

Proof of Actual Damages is Unnecessary……………………….4
Proof of Actual Damages is Often Extremely
Difficult………………………………………………………….6

The ACPA Does Not Require a Plaintiff to Prove that the
Cybersquatter Actually Profited from Its Unlawful Activities…………..7

Actual Damages and Lost Profit Figures Should be Excluded from the
Trial……………………………………………………………………………...8
1.
2.

Alternatively, They Should be Excluded Under FRE 403………………9

3.

III.

They are Irrelevant Under FRE 401 and 402……………………………8

They Should Be Excluded Because Defendant was not
Forthcoming with the Information Necessary to Prove or
Disprove these Figures…………………………………………………10

Conclusion……………………………………………………………………………...11

iii

Index of Authorities
Cases

Pages

Columbia Pictures Television v Krypton Broadcasting of Birmingham,
259 F.3d 1186 (9th Cir. 2001)……………………………………………………………………9
DaimlerChrysler v Net, Inc., 388 F.3d 201 (6th Cir. 2004)……………………………………...8
Douglas v Cunningham, 294 U.S. 207, 210, 79 L.Ed. 862, 55 S. Ct. 365 (1935)………………6
E&J Gallo Winery v Spider Webs Ltd, 286 F.3d 270 (5th Cir. 2002)……………………………5
Electronics Bouquet Holdings v Zuccarini, 56 U.S.P.Q.2d 1705 (E.D. PA 2000)……………...6
Fieldturf v Triexe Management Group, 69 U.S.P.Q.2d 861 (N.D. IL 2003)……………………4
Fitzgerald Publishing Co. v Baylor Publishing Co., 807 F.2d 1110 (2nd Cir. 1986)……………7
Ford Motor Co. v Catalanotte, 342 F.3d 543 (6th Cir. 2003)……………………………………3
Ford Motor Company v Cross, 441 F.Supp.2d 837 (E.D. Mich. 2006)…………………………7
Gabbanelli Accordions & Imports v Ditta Gabbanelli Ubaldo di Elio Gabbanelli,
575 F.3d 693 (7th Cir. 2009)……………………………………………………………………..4
L.A. News Serv. V Rueters TV Int’l, 149 F.3d 987 (9th Cir. 1998)………………………………4
Microsoft Corporation v Tierra Computer, 184 F.Supp.2d 1329 (N.D. GA 2001)……………..5
Peer Int’l Corp. v Pausa Records, 909 F.2d 1332 (9th Cir. 1990)……………………………7, 9
St. Luke’s Cataract and Laser Institute v Sanderson, 573 F.3d 1186 (2009)…………………...5
Verizon Cal., Inc. v Navigation Catalyst Sys., 568 F.Supp.2d 1088 (C.D. Cal. 2008)………….2
Other Authorities
15 U.S.C. § 1117(a)……………………………………………………………………………...3
15 U.S.C. § 1117(d)…………………………………………………………………………...3, 4
15 U.S.C. § 1125(d)………………………………………………………………………...4, 5, 8
15 U.S.C. § 1125(d)(1)…………………………………………………………………………..3

iv

15 U.S.C. § 1125(d)(1)(A)………………………………………………………………………8
15 U.S.C. § 1125(d)(1)(B)……………………………………………………………………….8
15 U.S.C. § 1125(d)(1)(B)(i)…………………………………………………………………….8
145 Cong. Rec. S10519 (Daily Ed. Aug. 5, 1999)………………………………………………5
FRE 401……………………………………………………………………………………...8, 10
FRE 402………………………………………………………………………………………….8
FRE 403……………………………………………………………………………………...9, 10
J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition,
§ 2078, pp. 25-393-394 (2011)…………………………………………………………………..5
McCormick on Evidence (6th Ed.) § 185………………………………………………………...9
Neil L. Martin, The Anticybersquatting Consumer Protection Act:
Empowering Trademark Owners, But Not the Last Word on Domain
Name Disputes, 25 Iowa J. Corp. L. 591, 607 (2000)…………………………………………...4
S. Rep. No. 106-140, at 7 (1999)………………………………………………………………...6

v

I.

Factual Background
Since the factual record in this case is already quite extensive through prior briefing,

Plaintiff, The Weather Underground, Inc. (“Weather Underground”), will simply remind the
Court that this case is about Defendants’ unauthorized registration and/or use of what now turns
out to be 274 typographical or other derivations of Plaintiff’s trademarks. Plaintiff owns and
operates a Top 100 website on the Internet. Discovery has shown that Defendants’ business
model has been to register multiple typographical variations of trademarks and trade names
which are owned by others, including many famous trademarks, in order to reap the benefit and
cyber-traffic generated by typographical errors which are unwittingly punched into consumers’
web browsers.

Defendants’ domain portfolios have, over the years, included millions of

misspelled marks in which Defendants have no legitimate interest, other than to divert traffic
away from their lawful trademark owners. (Multiple examples of these “typo-domains” are
referenced in ¶ 81 of the First Amended Complaint.)
Defendants make their money on the enormous volume of the Internet, with its millions
of users, and millions of typographical errors each day. They do so by “monetizing” the web
traffic, receiving a few cents per click on each domain, on which Defendants either host
advertising or links to other websites, including the websites of companies which compete with
the legitimate trademark owners.

For this reason, in conjunction with Defendants’

demonstrably shoddy recordkeeping, Defendants are able to claim that they make very little
money from the typosquatted domains of any particular trademark owner, such as Plaintiff.
Conversely, victims of this typosquatting, like Weather Underground, will necessarily have a
difficult time proving substantial damages -- or even anything more than de mininous damages
-- against cyber-pirates, despite the fact that Defendants are hijacking their intellectual property

1

for commercial gain. With Defendants’ business model such as it is, only a large group of
plaintiffs banding together, as in a class action, would be able to successfully demonstrate
substantial damages on the part of the victims and substantial gains on the part of Defendants.
Defendants’ business model is predicated on the tendency to quickly transfer typosquatted
domain names back to their rightful owners whenever they get caught, in the realistic hope that
most trademark owners will not make the effort to assert their rights against Defendants under
the ACPA. Weather Underground, like Verizon before it, has chosen to pursue its claim under
the ACPA, not satisfied with the notion that thieves should suffer no consequences just because
they give back the stolen property when caught. See Verizon Cal., Inc. v Navigation Catalyst
Sys., 568 F.Supp.2d 1088 (C.D. Cal. 2008).
Because the ACPA gives victims of cyber-piracy the right to elect statutory damages in
lieu of proving their actual damages or Defendants’ ill-gotten profits from these particular
instances of typosquatting, Plaintiff believes that any discussion of these monetary figures
should be excluded from trial, lest they prejudice the Plaintiff, waste the Court’s time on
matters which are not necessary, confuse or mislead the jury into believing that the statutory
damages are somehow dependent upon the actual dollars gained or lost. More to the point:
actual damages and the profits gained from these particular marks are irrelevant where statutory
damages have been elected.
II.

Argument
A.

Plaintiff Has Elected to Recover Statutory Damages
1.

The ACPA Provides for an Election of Remedies

Defendants’ entire business model is based on the notion that it is acceptable to profit
off of millions of typographical variations of the trademarks and trade names of others, and

2

then to count on the legitimate owners of the those marks not asserting their right to demand
statutory damages under the ACPA. One way that Defendants do this is by transferring the
domains back to their legitimate owners whenever they get caught. At trial, it is predictable
that Defendants will continue this theme of “no harm, no foul” by trying to put into evidence or
otherwise discuss the relatively small level of harm suffered by Plaintiff and the relatively
small monetary gain attributed to the Defendants for the particular domains in question,
notwithstanding the fact that we now know of 274 of them.

But unfortunately for the

Defendants, the ACPA does not lend itself to a “no harm, no foul” defense.
Congress purposefully left it up to the victims of cyber-piracy to determine whether the
evidence of monetary losses or of ill-gotten gains would be submitted to the trier of fact or not.
Under the Lanham Act, in which the ACPA is now incorporated, a Plaintiff who successfully
proves a violation under § 1125(d) is entitled “to recover (1) defendant’s profits, (2) any
damages sustained by the plaintiff, and (3) the costs of the action.” 15 U.S.C. § 1117(a).
However, should a plaintiff prefer not to go through the often difficult or impossible exercise of
proving the cybersquatter’s profits and/or its own damages, it has the option of electing to
pursue statutory damages under 15 U.S.C. § 1117(d), which reads:
In a case involving a violation of § 1125(d)(1) of this title [i.e., the
ACPA], the plaintiff may elect, at any time before final judgment is
rendered by the trial court, to recover, instead of actual damages and
profits, an award of statutory damages in the amount of not less than
$1,000 and not more than $100,000 per domain name, as the court
considers just.
In the present case, Plaintiff has now elected to receive statutory damages, in lieu of actual
damages or profits. The choices are mutually exclusive. Ford Motor Co. v Catalanotte, 342
F.3d 543, 546 (6th Cir. 2003) (a plaintiff under the ACPA may seek, “between $1,000 and
$100,000 in statutory damages per domain name in lieu of actual damages.”) (emphasis added).
3

Statutory damages under § 1117(d) “may be awarded only in cases in which compensatory
damages are not awarded for the same violation.” Gabbanelli Accordions & Imports v Ditta
Gabbanelli Ubaldo di Elio Gabbanelli, 575 F.3d 693, 698 (7th Cir. 2009); see also, Fieldturf v
Triexe Management Group, 69 U.S.P.Q.2d 861 (N.D. IL 2003) (“a plaintiff seeking to recover
under § 1125(d) may elect an award of statutory damages for each violation of the
cybersquatting statute instead of actual damages.) (emphasis added). In other words, choosing
to pursue statutory damages constitutes a definitive election of remedies. 1
2.

Statutory Damages are Meant to Punish and Deter: Proof of Actual,
Out-of-Pocket Damages is Unnecessary and Often Extremely
Difficult
a.

Proof of Actual Damages is Unnecessary

The ACPA is designed so that a plaintiff can decide whether the best possible recovery
is likely to be achieved by pursuing compensatory damages or by pursuing statutory damages,
depending upon the facts of the case. In cases where the plaintiff is easily able to prove that it
has sustained substantial damages or that the defendant has made significant profits off of its
marks at a magnitude likely to exceed the statutory range, then compensatory damages will
likely be chosen. Conversely, when damages or ill-gotten gain are difficult to prove, plaintiff
may forgo that exercise and argue for statutory damages between $1,000 and $100,000 per
domain name. Plaintiff is given this choice because of the punitive and deterrent nature of the
ACPA.

Neil L. Martin, The Anticybersquatting Consumer Protection Act: Empowering

Trademark Owners, But Not the Last Word on Domain Name Disputes, 25 Iowa J. Corp. L.
591, 607 (2000). In essence, “The provision of statutory damages alleviates the plaintiffs’
1

Similarly, the Copyright Act requires a plaintiff to give up the right to seek actual damages
once the plaintiff has elected statutory damages. L.A. News Serv. V Rueters TV Int’l, 149 F.3d
987, 995 (9th Cir. 1998) (citations omitted).
4

burden of proving the amount of damage they suffered at the hands of the cybersquatter.” Id.
As the Eleventh Circuit has observed, the ACPA’s statutory damages serve as, “a sanction to
deter … wrongful conduct.” St. Luke’s Cataract and Laser Institute v Sanderson, 573 F.3d
1186, 1204 (2009). Statutory damages under § 1125(d) thus serve “to sanction or punish” the
“cyber pirate” for its “bad faith conduct in order to deter future violations of the ACPA ….” Id
at 1205. 2 As the leading treatise on trademarks and unfair competition notes, “an award of
statutory damages under the ACPA serves to sanction or punish the bad faith conduct of
defendant, while an award of damages for trademark infringement serves to compensate the
trademark owner for the injuries.” J. Thomas McCarthy, McCarthy on Trademarks and Unfair
Competition, § 2078, pp. 25-393-394 (2011). In the Final Pretrial Order, Plaintiff has elected to
try its ACPA and declaratory relief counts only, and limits its claim for monetary relief to
statutory damages and attorney fees only.

Accordingly, there is no need for Weather

Underground to prove its actual damages, which are immaterial to these inquiries.
For the same reason, the court in Microsoft Corporation v Tierra Computer, 184
F.Supp.2d 1329, 1333 (N.D. GA 2001), rejected defendant’s assertion that plaintiff must prove
some amount of actual damages before it can recover statutory damages under the Lanham Act.
In that case, the court held that where a plaintiff is able to demonstrate evidence of a clear
violation of the Lanham Act, plaintiff may elect and recover statutory damages, without proof
of actual damages. Id. Similarly, in E&J Gallo Winery v Spider Webs Ltd, 286 F.3d 270, 278
(5th Cir. 2002), the circuit court affirmed the trial court’s award of statutory damages, even
though the plaintiff “did not present evidence that it actually lost any business due to Spider
Web’s actions,” since the defendant’s behavior put Gallo “‘at risk of losing business and of
2

This is also evident from the legislative history. See 145 Cong. Rec. S10519 (Daily Ed. Aug.
5, 1999) (Statement of Sen. Abraham).
5

having its business representation tarnished.” (internal citation omitted). Since Plaintiff is not
required to prove actual losses in order to be awarded statutory damages, there is no reason for
the jury to consider them, and a discussion of them at trial runs the risk of misleading the jurors
into believing that plaintiff has the burden of showing actual losses or that these actual losses
somehow dictate the appropriate statutory damage figure.
b.

Proof of Actual Damages is Often Extremely Difficult

Even where willful intent can be established, Congress and the courts have recognized
that proving damages is often quite difficult. See S. Rep. No. 106-140, at 7 (1999). In
Electronics Bouquet Holdings v Zuccarini, 56 U.S.P.Q.2d 1705 (E.D. PA 2000), a case very
similar to this one, the court awarded the maximum amount of statutory damages for each of
the five domain misspellings at issue, rendering a $500,000 statutory damage verdict despite
the fact that the plaintiff’s loss of customers and good will was determined to be “incalculable.”
Like in the instant matter, the defendant in the Zuccarini case had no bonafide business purpose
for registering the domain misspellings, offered no goods or services relating to the true
owners’ products, and inexplicably registered (merely) hundreds of domain names which were
misspellings of famous brands, company names, etc. The court found that because Zuccarini
“boldly thumbs his nose at the rulings of this court and laws of our country,” the maximum
statutory damages were appropriate. The Court here will be asked to do likewise, even in the
absence of “calculable,” actual damages.
Because of the common, recognized difficulty of proving actual losses in intellectual
property cases, District courts are given very broad discretion in assessing statutory damages.
See Douglas v Cunningham, 294 U.S. 207, 210, 79 L.Ed. 862, 55 S. Ct. 365 (1935) (within
statutory limits, determination of statutory damages is committed solely to the discretion of the

6

trial court).

As this Court has acknowledged, “a successful plaintiff in a trademark

infringement case is entitled to recover enhanced statutory damages even where its actual
damages are nominal or non-existent.” Ford Motor Company v Cross, 441 F.Supp.2d 837, 852
(E.D. Mich. 2006) (citing Peer Int’l Corp. v Pausa Records, 909 F.2d 1332, 1336-1337 (9th Cir.
1990)). This Court has also recognized that the proper objective of statutory damages in an
ACPA case is to have a deterrent effect. Id. (citing Fitzgerald Publishing Co. v Baylor
Publishing Co., 807 F.2d 1110, 1117 (2nd Cir. 1986)). A trademark owner may elect to recover
statutory damages for cyber-piracy, and in such cases, “a court has wide discretion in
determining the amount of statutory damages to be awarded, within the specified limits
established by Congress.” Id (citing Peer, supra.).
3.

The ACPA Does Not Require a Plaintiff to Prove that the
Cybersquatter Actually Profited from Its Unlawful Activities

The ACPA states that:
A person shall be liable in a civil action by the owner of a mark,
including a personal name which is protected as a mark under this
section, if, without regard to the goods or services of the parties, that
person -(i)

has a bad faith intent to profit from that mark, including a
personal name which is protected as a mark under this
section; and

(ii)

registers, traffics in or uses a domain name that –
(I)

in the case of a mark that is distinctive at the time
of the registration of the domain name, is identical
or confusingly similar to that mark;

(II)

in the case of a famous mark that is famous at the
time of registration of the domain name, is
identical or confusingly similar to or dilutive of
that mark; or

7

(III)

is a trademark, word, or name protected by reason
of § 706 of Title 18 or § 220506 of Title 36.

15 U.S.C. § 1125(d)(1)(A) (emphasis added).
The plain language of the statute makes it clear that a plaintiff need only prove a
defendant’s bad faith intent to profit, not that the cybersquatter actually profited or the amount
of that profit. Immediately following the above-cited statutory language, Congress set out a list
of nine non-exclusive factors which a court may consider “[i]n determining whether a person
has a bad faith intent ….” 15 U.S.C. § 1125(d)(1)(B)(i). None of the Sixth Circuit case law
discussing the elements or proofs necessary to prevail in an ACPA claim suggest that it is
necessary to make a showing of a defendant’s actual gains or profits.

See, e.g.,

DaimlerChrysler v Net, Inc., 388 F.3d 201, 204ff (6th Cir. 2004) (the fifth element of an ACPA
claim is “a bad faith intent to profit.”). Thus, it is clear under the ACPA that intent to profit is
the standard, not actual profits or the extent of profits. Moreover, the elements of the ACPA
provide no mitigation based on the extent of the defendant’s profits; to the contrary, the clear
wording of the statute and the lack of any language about the extent of defendant’s profits in
the list of bad faith factors or in the election of remedies provision indicate that defendant’s
actual profits are immaterial and irrelevant. See § 1125(d)(1)(B) and § 1117(d).
B.

Actual Damages and Lost Profit Figures Should be Excluded from the Trial
1.

They are Irrelevant Under FRE 401 and 402

The amount of actual damages sustained by Plaintiff or actual profits gained by
Defendants should be excluded from the trial as irrelevant under FRE 402. This is so because
the actual amounts of Plaintiff’s losses or Defendants’ gains do not “make the existence of any
fact that is of consequence to the determination of the action more probable or less probable
than it would be without the evidence.” FRE 401. Since Plaintiff is not required to prove its
8

actual damages -- and in fact is prohibited from doing so where it has elected statutory damages
-- the amount of those damages is of no consequence to the determination. Likewise, since
Plaintiff is precluded from seeking Defendants’ profits where it has elected to receive statutory
damages, and since Plaintiff is only required to prove Defendants’ “bad faith intent to profit,”
the amount of those profits is of no consequence to the determination of the action. In other
words, these monetary figures lack materiality. 3 Since Plaintiff here is not required to prove
the amount of its actual damages or the amount of Defendants’ profits in order to be awarded
statutory damages, those figures are not “of consequence” and are thus irrelevant. They should,
accordingly, be excluded. See Columbia Pictures Television v Krypton Broadcasting of
Birmingham, 259 F.3d 1186, 1194 (9th Cir. 2001) (“a plaintiff may elect statutory damages
“‘regardless of the adequacy of the evidence offered as to its actual damages or the amount of
the defendant’s profits.’”) (citation omitted). There is no need for such evidence, because
where statutory damages are elected, “‘the court has wide discretion in determining the amount
of statutory damages to be awarded, constrained only by the specified maxima and minima.’”
Id (quoting Peer, supra, 909 F.2d at 1336).
2.

Alternatively, They Should be Excluded Under FRE 403

Alternatively, even if the Court were to find that the actual amount of Plaintiff’s
damages and/or the actual amount of Defendants’ profits are relevant, they should nevertheless
be excluded under FRE 403, because the probative value of those figures “is substantially
3

“There are two components to relevant evidence: materiality and probative value. Materiality
concerns the fit between the evidence and the case. It looks to the relation between the
propositions that the evidence is offered to prove and issues in the case. If the evidence is
offered to help prove a proposition that is not a matter in issue, the evidence is immaterial. ***
Thus, in a suit for workers’ compensation, evidence of contributory negligence would be
immaterial, whether pleaded or not, since a worker’s negligence does not affect the right to
compensation.” McCormick on Evidence (6th Ed.) § 185. FRE 401 incorporates “these twin
concepts of materiality and probative value.” Id.
9

outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or
by consideration of undue delay, [and] waste of time ….” FRE 403. As recognized in many of
the cases cited above, the very nature of cyber-piracy is likely to involve egregious conduct for
which actual damages are either difficult to prove or de minimus, with relatively small profits
realized by the defendant against any particular trademark owner whose marks are included in
the Defendants’ extensive portfolio. Because the intent of the statute is to deter this type of
behavior through punishment, the purpose of the law would be thwarted if Defendants were
allowed to confuse the issues and prejudice or mislead the jury into believing that statutory
damages should merely be reflective of or related to actual damages or profits. Worse yet,
Plaintiff would be unfairly prejudiced and the jury misled if a discussion of Plaintiff’s actual
damages or of Defendants’ actual profits were to give the jurors the impression that Plaintiff
has the burden of proving these figures in order to obtain a verdict on liability. Moreover, the
Court’s valuable time would be wasted by the presentation of figures which are not required in
order for the Plaintiff to prevail on liability and obtain statutory damages.
3.

They Should Be Excluded Because Defendant was not Forthcoming
with the Information Necessary to Prove or Disprove these Figures

Finally, it would be patently unfair for monetary figures regarding gained or lost profits
to be submitted to the jury because defendant failed to provide complete revenue data, and
instead just produced a summary, which was prepared for this litigation and not in the ordinary
course of business. 4 Moreover, Defendants only provided revenue data with respect to the first
35 domain names known to Plaintiff at the time the lawsuit was filed, not with respect to the
subsequently discovered list of 239 additional domains, of which Plaintiff is now aware.

4

The inadequacy of Defendants’ overall disclosures are addressed more comprehensively in
Plaintiff’s simultaneously filed Motion in Limine Requesting a Jury Instruction on Spoliation.
10

Weather Underground would necessarily be significantly prejudiced by having to respond to
such information if it were for the first time produced now or at trial.
III.

Conclusion
The Court should exclude discussion of Plaintiff’s actual damages and of Defendants’

actual profits because Plaintiff has elected to recover statutory damages under the ACPA--the
purpose of which is to punish or deter, not compensate--and further because proof of actual
damages and profits is often difficult or impossible and is simply not required. Because they
are of no consequence to the claim under the elements of the ACPA, they are immaterial and
irrelevant and should be excluded. Alternatively, they should be excluded because they risk
confusing or misleading the jury and wasting time. Finally, they should be excluded because
they prejudice the Plaintiff by making it appear as if it had to prove these in order to establish
liability or statutory damages, and because Defendant has not provided enough information to
do so.
WHEREFORE, for all of the above-stated reasons, this Honorable Court is respectfully
asked to grant Plaintiff’s Motion in Limine to Exclude Discussion of Plaintiff’s Actual
Damages and of Defendants’ Monetary Gain.

11

Respectfully submitted this 23rd day of February, 2012.

/s/Anthony P. Patti__________
Anthony P. Patti (P43729)
HOOPER HATHAWAY, PC
126 South Main Street
Ann Arbor, MI 48104
734-662-4426
[e-mail]
Co-Counsel for Plaintiff
Enrico Schaefer (P43506)
Brian A. Hall (P70865)
TRAVERSE LEGAL, PLC
810 Cottageview Drive, Unit G-20
Traverse City, MI 49686
231-932-0411
[e-mail]
Lead Counsel for Plaintiff

12

CERTIFICATE OF SERVICE
I hereby certify that on the 23rd day of February, 2012, I electronically filed the
foregoing paper with the Court using the ECF system which will send notification of such
filing to the following:
Enrico Schaefer (P43506)
Brian A. Hall (P70865)
TRAVERSE LEGAL, PLC
810 Cottageview Drive, Unit G-20
Traverse City, MI 49686
231-932-0411
[e-mail]
[e-mail]
Lead Counsel for Plaintiff

Nicholas J. Stasevich (P41896)
Benjamin K. Steffans (P69712)
Bruce L. Sendek (P28095)
BUTZEL LONG, PC
150 West Jefferson, Suite 100
Detroit, MI 48226
[phone]
[e-mail]
[e-mail]
[e-mail]
Local Counsel for Defendants

Anthony Patti (P43729)
HOOPER HATHAWAY, P.C.
126 South Main Street
Ann Arbor, MI 48104
734-662-4426
[e-mail]
Co-counsel for Plaintiff

William A. Delgado (admitted pro hac vice)
WILLENKEN WILSON LOH & LIEB LLP
707 Wilshire Blvd., Ste. 3850
Los Angeles, CA 90017
213-955-9240
[e-mail]
Lead Counsel for Defendants

/s/Anthony P. Patti__________
Anthony P. Patti (P43729)
HOOPER HATHAWAY, PC
126 South Main Street
Ann Arbor, MI 48104
734-662-4426
[e-mail]
Co-Counsel for Plaintiff

13