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

Filing 250

MOTION in Limine No. 6 by Connexus Corporation, Firstlook, Incorporated, Navigation Catalyst Systems, Incorporated. (Delgado, William)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN

THE WEATHER UNDERGROUND, INC.,
a Michigan corporation,
Plaintiff,
Case No. 2:09-CV-10756
Hon. Marianne O. Battani

vs.
NAVIGATION CATALYST SYSTEMS, INC.,
a Delaware corporation; CONNEXUS CORP.,
a Delaware corporation; FIRSTLOOK, INC.,
a Delaware corporation; and EPIC MEDIA
GROUP, INC., a Delaware corporation,

Defendants.
______________________________________________________________________
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 Attorneys for Plaintiff

William A. Delgado
WILLENKEN WILSON LOH & LIEB LLP
707 Wilshire Boulevard, Suite 3850
Los Angeles, CA 90017
[phone]
[e-mail]
Lead Counsel for Defendants

Nicholas J. Stasevich (P41896)
Benjamin K. Steffans (P69712)
Anthony P. Patti (P43729)
BUTZEL LONG, P.C.
HOOPER HATHAWAY, PC
150 West Jefferson, Suite 100
126 South Main Street
Detroit, MI 48226
Ann Arbor, MI 48104
[phone]
734-662-4426
[e-mail]
[e-mail]
[e-mail]
Attorneys for Plaintiff
Local Counsel for Defendants
______________________________________________________________________

DEFENDANTS CONNEXUS CORPORATION, FIRSTLOOK, INC., AND
NAVIGATION CATALYST SYSTEMS, INC.’S MOTION IN LIMINE NO. 6

NOTICE OF MOTION AND MOTION
TO THIS HONORABLE COURT, PLAINTIFF, AND ITS ATTORNEYS OF RECORD:
Connexus Corporation, Firstlook, Inc., and Navigation Catalyst Systems, Inc.
(collectively the “Defendants”) hereby move this court in limine for an order allowing evidence
and argument regarding Plaintiff‟s financial condition, actual damages (or lack thereof), and
Defendants‟ actual profits so that they can be considered by the jury in determining the amount
of statutory damages to award, if any.
The bases for this Motion are set forth in the Memorandum of Points and Authorities, to
wit, that evidence of Plaintiff‟s actual damages and Defendants‟ actual profit is admissible as a
benchmark against which to test the constitutionality of any statutory damages that are awarded
as well as any attorneys‟ fees that may be sought in the future.
Counsel for Defendants has explained the nature of this Motion and its legal basis and
requested, but did not obtain, concurrence in the relief sought.
RESPECTFULLY SUBMITTED this 24th day of February, 2012 (Pacific Time).
/s/William A. Delgado
William A. Delgado
WILLENKEN WILSON LOH & LIEB LLP
707 Wilshire Boulevard, Suite 3850
Los Angeles, CA 90017
[phone]
[e-mail]
Lead Counsel for Defendants

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MEMORANDUM OF POINTS AND AUTHORITIES
I.

INTRODUCTION
With this motion in limine, Defendants argue two issues:
1. That the amount of statutory damages to be awarded to Plaintiff, if any, should be
determined by the jury, not the Court; and
2. In testing any jury award for constitutionality, the Court must have evidence of the
Plaintiff‟s actual damages as well as Defendants‟ actual profits from the monetization
of the domain names at issue.
With respect to the first issue, the Seventh Amendment protects Defendants‟ right to have

the jury determine the amount of statutory damages to be awarded. With respect to the second
issue, it is clear that evidence of actual damages is admissible so that there can be a benchmark
against which to test the constitutionality of any statutory damages award or future request for
attorneys‟ fees.
II.

ARGUMENT
A.

THE AMOUNT OF STATUTORY DAMAGES, IF ANY, SHOULD BE
DETERMINED BY THE JURY NOT THE COURT.

The first issue rests heavily on the Supreme Court‟s decision in Feltner v. Columbia
Pictures Television, Inc., 523 U.S. 340 (1998). In Feltner, the Supreme Court determined that
the Copyright Statute, 17 U.S.C. § 504(c)(1), did not provide a right to a jury trial on damages.
Id. at 347. Nevertheless, the Court held that the Seventh Amendment guarantees a right to a jury
trial for all “common-law causes of action, [and] actions brought to enforce statutory rights that
are analogous to common-law causes of action ordinarily decided in English law courts in the

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late 18th century…” Id. at 348. The Court concluded that copyright damages were a commonlaw cause of action ordinarily tried by juries in the late eighteenth century, and that, therefore,
the Seventh Amendment provided a right to jury trial both as to liability and as to the amount of
damages, even though the copyright statute does not so provide. Id. at 350-55.
Here, the statutory damages provision of the ACPA, 15 U.S.C. § 1117(d), is essentially
identical to the copyright damages provision at issue in Feltner, 17 U.S.C. § 504(c)(1).
Correspondingly, it is Defendants‟ position that, as in Feltner, the Seventh Amendment provides
Defendants a right to a jury trial on the issue of damages. To Defendants‟ knowledge, only one
circuit court has squarely analyzed this issue. In GoPets, Ltd. v. Hise, et al., 657 F.3d 1024 (9th
Cir. 2011), the Ninth Circuit opined as follows:
Cybersquatting, of course, was not a common-law action in English courts
in the eighteenth century, but cybersquatting is a form of trademark
infringement. It is therefore likely analogous to a common-law cause of
action. See Dairy Queen, Inc. v. Wood, 369 U.S. 469, 472-73 (1962). We
need not decide that question, however, because we hold that there is no
right to a jury trial when a judge awards the minimum statutory damages.
GoPets, 657 F.3d at 1034.
The Ninth Circuit‟s analysis is correct: cybersquatting is a form of trademark
infringement and is, in fact, codified at 15 U.S.C. § 1125(d) within the Lanham Act, which
governs trademarks claims. Correspondingly, it is analogous to a common-law cause of action
and pursuant to Feltner and Dairy Queen, Defendants are entitled to a jury trial on the issue of

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damages. That the Ninth Circuit did not follow its analysis to its only logical conclusion
(because it did not need to do so) is of no moment.1
For these reasons, Defendants are entitled to have a jury determine the amount of
statutory damages to be awarded, if any.
B.

EVIDENCE OF PLAINTIFF‟S FINANCIAL CONDITION AND ACTUAL
DAMAGES AS WELL AS DEFENDANTS‟ ACTUAL PROFITS IS
RELEVANT AND ADMISSIBLE.

Defendants understand that Plaintiff will be filing a motion in limine seeking to preclude
evidence and argument of Plaintiff‟s financial condition, Plaintiff‟s actual damages (or lack
thereof), and/or Defendants‟ actual profits because Plaintiff has elected to recover statutory
damages. While Plaintiff‟s election of statutory damages may permit Plaintiff to seek damages
in excess of actual damages, it does not render evidence of actual damages inadmissible.
Charter Communications Entertainment I, LLC v. Burdulis, 367 F. Supp. 2d 16 (D. Mass. 2005)
(analyzing various methods of awarding statutory damages under 47 U.S.C. § 553, which is
similar to 15 U.S.C. § 1117(d), and settling on an award of statutory damages that most closely
estimates actual damages); cf. Bosch v. Ball-Kell, 2007 WL 601721 *5 (C.D. Ill. 2007) (“Nor can
this Court find that evidence of actual damages is irrelevant even if Plaintiff elects statutory
damages, as there is authority suggesting that the amount of actual damages is one factor that can
be considered in determining an award of statutory damages.”); Andrade v. Chase Home

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Other courts have allowed juries to determine the amount of statutory damages under the
ACPA. See, e.g., St. Luke’s Cataract and Laser Institute, P.A. v. Sanderson, 573 F.3d 1186,
1203-04 (11th Cir. 2009) (analyzing whether jury‟s award of damages under the ACPA was
duplicative).
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Finance, LLC, 2005 WL 3436400 *6 (N.D. Ill 2005) (noting that evidence of actual damages is
“at least potentially quite meaningful” in determining statutory damages).
Indeed, allowing evidence and argument regarding Plaintiff‟s actual damages and
Defendants‟ actual profits is necessary in order to determine whether an award of statutory
damages passes constitutional muster. As with punitive damages, statutory damages are limited
by constitutional protections of due process. St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S.
63, 66 (1919) (announcing the test as whether the “prescribed penalty is so severe and oppressive
as to be wholly disproportionate to the offense and obviously unreasonable.”). In Zomba
Enterprises, Inc. v. Panorama Records, Inc., 491 F.3d 574 (6th Cir. 2007), the Sixth Circuit was
tasked with determining whether an award of statutory damages was unconstitutional. Relying
on Williams (wherein the Supreme Court countenanced a 113:1 ration between statutory and
actual damages), the Sixth Circuit held that a 44:1 ratio between statutory and actual damages
was not unconstitutional. Id. at 587-88
At this point, the Court need not decide what ratio would or would not survive a Williams
analysis. But, the point is this: to conduct a Williams analysis and create a ratio in the first
instance, there must be a benchmark against which to test the statutory damages to see if the
award is “so severe and oppressive as to be wholly disproportionate.” The court cannot conduct
that analysis in a vacuum, devoid of any information as to Plaintiff‟s actual damages or
Defendants‟ actual profits. The Court cannot determine whether an award is “disproportionate”
if it has nothing to which to compare it.
Lastly, evidence of Plaintiff‟s lack of damages and Defendants‟ limited profits would
also be relevant to any future motion for attorneys‟ fees, which Plaintiff will undoubtedly make

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in the event it prevails. Multisorb Tech., Inc. v. Impak Corp., 2008 WL 3884381 *2 (W.D.N.Y.
2008) (“Considered together with other mitigating factors such as lack of proof of actual harm to
plaintiff‟s business, as well as defendants‟ immediate discontinuance of the domain name‟s use
after it became aware of this lawsuit, the court finds that this case is not in the „exceptional‟
category, and that an award of statutory attorney‟s fees is not warranted under the
circumstances.”).
For these reasons, evidence of Plaintiff‟s financial condition and actual damages (or lack
thereof) and Defendants‟ actual, meager profits from the monetization of the domain names at
issue is relevant and admissible. In fact, precluding such evidence would deprive the Court of
the information necessary to make a determination as to the constitutionality of any award of
statutory damages.
III.

CONCLUSION
Pursuant to the Seventh Amendment, the Defendants have the right to a jury trial on the

issue of statutory damages. Moreover, Defendants should be allowed to introduce evidence of
Plaintiff‟s financial condition, actual damages (or lack thereof) and Defendants‟ actual profit.
RESPECTFULLY SUBMITTED this 24th day of February, 2012 (Pacific time).
/s/William A. Delgado
William A. Delgado
WILLENKEN WILSON LOH & LIEB LLP
707 Wilshire Boulevard, Suite 3850
Los Angeles, CA 90017
[phone]
[e-mail]
Lead Counsel for Defendants

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CERTIFICATE OF SERVICE
I hereby certify that on February 24, 2012, Pacific Time, 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 Attorneys for Plaintiff

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

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

William A. Delgado
WILLENKEN WILSON LOH & LIEB LLP
707 Wilshire Boulevard, Suite 3850
Los Angeles, CA 90017
[phone]
[e-mail]
Lead Counsel for Defendants

/s/William A. Delgado
William A. Delgado
WILLENKEN WILSON LOH & LIEB LLP
707 Wilshire Boulevard, Suite 3850
Los Angeles, CA 90017
[phone]
[e-mail]
Lead Counsel for Defendants

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