Eko Brands v. Adrian Rivera Maynez Enterprises Inc et al

Filing 174

MINUTE ORDER granting in part and denying in part Plaintiff's 151 Motion to Amend Judgment; granting in part and denying in part Defendants' 162 Motion to Amend Findings of Fact & Conclusions of Law. Plaintiff's motion to strike, see Pla's Surreply (docket no. 173 ), portions of defendants' reply, docket no. 171 , in support of their motion to amend, is STRICKEN as moot. Authorized by Judge Thomas S. Zilly.(MW)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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EKO BRANDS, LLC,

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Plaintiff,
v.

C17-894 TSZ

ADRIAN RIVERA MAYNEZ
ENTERPRISES, INC.; and ADRIAN
RIVERA,

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MINUTE ORDER

Defendants.

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The following Minute Order is made by direction of the Court, the Honorable
13 Thomas S. Zilly, United States District Judge:
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(1)
Plaintiff Eko Brands, LLC’s motion to amend judgment, docket no. 151, is
GRANTED in part and DENIED in part, as follows:
(a)
With regard to the reasonable royalty awarded to plaintiff by a jury
in the prior patent litigation between the parties, plaintiff’s motion to amend
Paragraphs 46–48 of the Findings of Fact and Conclusions of Law, docket no. 149,
to reflect that plaintiff may elect between such royalty award and a disgorgement
of defendants’ profit associated with products bearing the marks ECO FILL
DELUXE, ECO FILL DELUXE 2.0, or ECO-FLOW during the period from
April 2, 2015, through June 8, 2018, is DENIED. Despite its awareness long
before trial that double recovery was an issue in this case, plaintiff did not
previously contend that it is entitled to such election. See Zimmerman v. City of
Oakland, 255 F.3d 734, 740 (9th Cir. 2001) (observing that a district court “does
not abuse its discretion when it disregards legal arguments made for the first time
on a motion to amend”). Moreover, the authorities upon which plaintiff relies do
not support its position. In Aero Prods. Int’l, Inc. v. Intex Recreation Corp., 466
F.3d 1000 (Fed. Cir. 2006), the Federal Circuit made clear that patent infringement
and trademark infringement damages may not be awarded for the same sales of the

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MINUTE ORDER - 1

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same accused devices. Id. at 1016-20. Nowhere in the decision does the Federal
Circuit discuss the concept of an “election” between remedies. Moreover, Aero
involves patent and trademark infringement damages that were awarded in the
same trial. In this matter, plaintiff had already obtained the patent royalty award,
and the award had already been affirmed by the Federal Circuit, before the Court
issued its Findings of Fact and Conclusions of Law on January 30, 2020. See
Eko Brands, LLC v. Adrian Rivera Maynez Enters., Inc., 946 F.3d 1367 (Fed. Cir.
2020) (decided Jan. 13, 2020). Although a similar sequence was at issue in Apple,
Inc. v. Samsung Elecs. Co., 2014 WL 4467837 (N.D. Cal. 2014), which was also
cited by plaintiff, in that case, the district court acknowledged the double-recovery
problem presented by an award of damages in a prior case for design patent
infringement and the award of damages in the instant case for infringement of
utility patents, but it opted not to eliminate any duplicative damages until after the
appeals in both cases had been resolved. Id. at *25. The Apple Court did not
indicate how it would resolve the double-recovery issue or suggest that the matter
would be subject to the plaintiff’s unilateral election, but rather stated that it would
“consult with the parties” and “allow for appropriate briefing” after both appeals
were resolved. Id. at *26. The procedural posture of this case is entirely different,
and plaintiff has recovered the amount adequate to compensate it for patent and
trademark infringement for the period from April 2, 2015, through June 8, 2018.

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(b)
With regard to plaintiff’s and defendants’ products’ respective
compatibility with the Keurig® 2.0 machine, plaintiff’s motion to amend
Paragraphs 49–52 of the Findings of Fact and Conclusions of Law, docket no. 149,
to reflect that defendants’ profit associated with the ECO FILL 2.0 product is
attributable solely to trademark infringement and/or unfair competition, is
DENIED. Plaintiff’s motion to amend merely relitigates matters decided by the
Court. See Zimmerman, 255 F.3d at 740 (affirming the denial of a Rule 59(e)
motion because it “repeated legal arguments made earlier and sought to introduce
facts that were available earlier”). Plaintiff has not assigned error to Chart 1 on
Page 25 of the Findings of Fact and Conclusions of Law, docket no. 149, which
reflects the data in Trial Exhibit 473, and Chart 1 supports the Court’s conclusion
that defendants’ gross revenues for their ECO FILL products correlated with
defendants’ introduction of an operable reusable filter for Keurig® 2.0 machines,
as opposed to their use of the mark ECO FILL. As reflected in Chart 1, for almost
a year before Keurig placed its 2.0 machine on the market in October 2014,
defendants experienced virtually de minimis sales of ECO FILL products, but
shortly thereafter, defendants’ gross revenues soared. When other manufacturers,
including Keurig, began offering cartridges compatible with the 2.0 machines,
defendants’ market share declined. Plaintiff’s contention that defendants’ residual
volume of sales (for the years 2016–2018) relating to their 2.0 compatible product
is tied exclusively to the use of the ECO FILL mark, as opposed to other factors
like customer loyalty to a product first used before other options became available,

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is undermined by the market-share information that plaintiff unsuccessfully
attempted to introduce at trial. See Findings of Fact and Conclusions of Law at 34
n.19 (docket no. 149). Over the years following Keurig’s redesign, plaintiff has
lost ground to Keurig, which does not use any mark containing ECO or EKO, and
not to defendants, whose percentage of industry sales has remained fairly steady.
Moreover, during the years 2016 through 2018, defendants experienced net losses
with respect to the ECO FILL 2.0 product, and thus, any error in not disgorging to
plaintiff the profit associated with that product for those years is harmless. 1 In
contrast, plaintiff was awarded all of the net profits associated with the ECO FILL
1.0 product, see Tables 1 and 2 of the Findings of Fact and Conclusions of Law
(docket no. 149); see also new Table 3 attached hereto (see ¶ 1(d), below), and it
therefore cannot be heard to complain.

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(c)
With regard to defendants’ profits associated with ECO CAFAFE
filters, plaintiff’s motion to amend Paragraph 60 of the Findings of Fact and
Conclusions of Law, docket no. 149, to reflect that, notwithstanding plaintiff’s
lack of a competing product, such profits are attributable solely to use of the mark
ECO CARAFE and must be disgorged to plaintiff, is DENIED. Plaintiff’s
assertion that the Court erred in not awarding ECO CARAFE related profits
simply because plaintiff did not have a directly competing product misapprehends
the Court’s ruling. The Court did not consider the absence of a competing product
as a standalone reason for denying disgorgement, but rather as circumstantial
evidence that the profits at issue were attributable to a factor other than use of the
mark ECO CARAFE. Neither of the Ninth Circuit opinions cited by plaintiff
support a different result. In Maier Brewing Co. v. Fleischmann Distilling Corp.,
390 F.2d 117 (9th Cir. 1968), although the products were different, they bore the
identical mark, namely “Black & White,” which the trademark registrant had used
in interstate commerce for more than 50 years in connection with its “scotch of
excellent reputation,” and which the infringers used for beer, but apparently only
within intrastate commerce. Id. at 120. In affirming the district court’s award of
an accounting of the infringers’ profits, the Ninth Circuit recognized that such
remedy protects not only against a diversion of sales in the context of competing
products, but also from the possibility that customers who buy an infringer’s
product, believing it was manufactured by a registrant, might be so unhappy that
they will never again buy any item produced by the registrant. Id. at 122. This

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As indicated by the data contained in Trial Exhibit 274, defendants’ profits associated with the

20 ECO FILL 2.0 (also known as ECO FILL DELUXE 2.0) product were as follows:
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Gross Sales Minus Cost of Goods
Allocated Expenses
Net Profit

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2014
$400,711
$212,994
$187,717

2015
$3,607,043
$1,677,245
$1,929,798

2016
$1,063,615
$1,153,702
($90,087)

2017
$758,495
$1,470,896
($712,401)

2018
$1,004,459
$1,185,311
($180,852)

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risk, and the need in equity to address it, diminishes substantially when the marks
at issue are not even close to being identical and the registrant offers no competing
product, as was the situation in this case. While Maier is merely distinguishable,
TrafficSchool.com, Inc. v. eDriver Inc., 653 F.3d 820 (9th Cir. 2011), on which
plaintiff also relies, actually undermines plaintiff’s position. In TrafficSchool, the
Ninth Circuit affirmed the district court’s denial of the plaintiffs’ request for an
award of profits, reasoning that, in connection with their false advertising claim,
the plaintiffs did not offer any proof of past injury or causation, and thus, the
district court could not determine “with any degree of certainty what award would
be compensatory.” Id. at 831. In this matter, the Court has concluded that, given
the relative weakness of plaintiff’s EKO BREW mark, the minimal similarity of
defendants’ ECO CARAFE mark, and plaintiff’s lack of a competing product in
2015, when defendants actually generated a net profit, any disgorgement of such
profit, which was attributable to a factor other than unfair competition, would not
be consistent with the Lanham Act’s mandate that an award be compensatory, and
not punitive, in nature. See id. (quoting 15 U.S.C. § 1117(a)).

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(d)
With regard to the calculation of defendants’ profits to be disgorged
to plaintiff, plaintiff’s motion to amend Tables 1 and 2 of the Findings of Fact and
Conclusions of Law, docket no. 149, to disregard the data in Trial Exhibit 274, is
DENIED. Plaintiff is simply mistaken in its belief that Trial Exhibit 274 does not
contain information for defendants’ ECO FILTER, ECO SAVE, and ECO PURE
products. The figures derived from Trial Exhibit 274 are set forth in the attached
spreadsheet, which is hereby incorporated in the Findings of Fact and Conclusions
of Law as new Table 3.
(e)
With regard to defendants’ profits after August 1, 2019, plaintiff’s
motion to amend Paragraph 53 of the Findings of Fact and Conclusions of Law,
docket no. 149, to award disgorgement to plaintiff in an amount to be determined
after defendants submit an accounting of profits from September 16, 2019, until
June 30, 2020, is DENIED. Plaintiff did not raise this rather sensible solution
prior to filing its motion to amend judgment, but instead previously argued that it
was entitled to an award of defendants’ profits at the rate of $57,092 per month.
Plaintiff appears to concede that its position was unsupported by any evidence.
The Court will not now permit plaintiff, at significant prejudice to defendants, to
fundamentally alter the nature of its legal strategy and the factual basis for its
claim of post-trial damages.
(f)
With regard to injunctive relief, plaintiff’s motion to amend
Paragraph 67 of the Findings of Fact and Conclusions of Law, docket no. 149, is
GRANTED as follows. The sentence on Page 37 of the Findings of Fact and
Conclusions of Law, at Lines 9–12, is AMENDED to read (additional language is
underlined): “Defendants may not use “EKO” as the initial letters of a mark, but

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they may continue to use “ECO” as a prefix or other component of a mark,
provided they include in close proximity and in similar size or prominence another
trademark or trade name that makes clear the source of the product.” The Court
will enter an amended judgment to reflect this modification.

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(g)
With regard to defendants’ trademark registrations, plaintiff’s
motion to amend Paragraph 69 of the Findings of Fact and Conclusions of Law,
docket no. 149, to cancel Certificates of Registration Nos. 4,239,190 (ECO FILL),
4,796,840 (ECO CARAFE), and 5,741,858 (ECO FILTER), is DENIED.
Plaintiff’s dissatisfaction with the Court’s exercise of its discretion is not a ground
for amending the judgment, and plaintiff’s request for additional findings seems
disingenuous. The Court set forth in detail why plaintiff was not entitled to the
broad injunctive relief it requested, see Findings of Fact and Conclusions of Law
at ¶¶ 61–66 (docket no. 149), and those reasons apply with equal force to
plaintiff’s efforts to cancel defendants’ trademark registrations.

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(2)
Defendants’ motion to amend the Findings of Fact and Conclusions of Law
and to amend judgment, docket no. 162, is GRANTED in part and DENIED in part, as
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(a)
With regard to the registration of PERFECT POD, defendants’
motion to amend Paragraph 36 of the Findings of Fact and Conclusions of Law,
docket no. 149, is GRANTED in part as follows. 2 The second sentence of
Paragraph 36 is AMENDED to read (additional language is underlined, deleted
text is bracketed and stricken): “In contrast, Rivera did not seek registration of
PERFECT POD for “[p]aper filters for coffee makers” until January 2012, despite
claiming first use in May 2006, or for “[b]rewing cartridge[s] not of paper” until
February 2016, even though the mark is part of defendants’ website address and
had been used in connection with the EZ-CUP product since at least 2010[ and
with respect to paper filters since 2006].”

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(b)
With regard to the application to register ECO FILL, defendants’
motion to amend Paragraph 40 of the Findings of Fact and Conclusions of Law,
docket no. 149, is GRANTED in part as follows. The second sentence of
Paragraph 40 is AMENDED to read (additional language is underlined, deleted
text is bracketed and stricken): “[Defendants could have ascertained from the
PTO’s records that Eko Brands had been unsuccessful in its initial attempt to
register EKOBREW, and t]The relative speed with which an application for ECO

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The parties did not proffer as evidence at trial Certificates of Registration Nos. 4,186,815 and
5,478,203 for PERFECT POD. Pursuant to defendants’ suggestion, see Defs.’ Mot. at 3 n.1
(docket no. 162), the Court takes judicial notice of such Certificates of Registration. See Fed. R.
22 Evid. 201.

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FILL was filed (less than two weeks after the ECO FILL logo was developed
versus six[6-to-10] years after using PERFECT POD for the products at issue[in
commerce]) constitutes evidence of defendants’ desire to beat Eko Brands to the
proverbial punch.”

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(c)
With regard to the finding of willfulness, defendants’ motion to
amend Paragraph 42 of the Findings of Fact and Conclusions of Law, docket
no. 149, to reject the advisory jury’s verdict, is DENIED. The corrections made to
Paragraphs 36 and 40 of the Findings of Fact and Conclusions of Law, upon
defendants’ request, and in light of plaintiff’s concessions, see Pla.’s Resp. at 2-3
(docket no. 170), do not alter the Court’s view that the advisory jury’s finding of
willfulness was supported by the evidence, as set forth in Paragraphs 33–41 of the
Findings of Fact and Conclusions of Law, as hereby amended.

(3)
Plaintiff’s motion to strike, see Pla.’s Surreply (docket no. 173), portions of
defendants’ reply, docket no. 171, in support of their motion to amend, is STRICKEN as
9 moot.
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(4)
10 record.
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The Clerk is directed to send a copy of this Minute Order to all counsel of

Dated this 30th day of March, 2020.

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William M. McCool
Clerk

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s/Karen Dews
Deputy Clerk

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MINUTE ORDER - 6

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Table 3: Calculation of Defendants’ Profits to Be Disgorged
PRODUCT ↓

YEAR →

2012

2013

2014

2015

2016

2017

2018

2019

GROSS PROFIT (gross sales minus cost of goods)
ECO FILL 1.0 & MAX
ECO FILL DELUXE 1.0
ECO-FLOW
ECO CARAFE
ECO FILTER
ECOSAVE
ECO-PURE

$

42

$

110,955

$
$

439,540
1,377

$
$

511,136
2,457

318,405
1,592
331
779,079

$
$
$
$

271,954
1,108
235,204
494,127

$

299,559

$

204,146

$
$

416,703
346,698

$

16,902

$

21,826

$
$
$
$
$

379,322
13,714
33,426
3,388
30,770

$
$
$
$

527,381
2,149
456,114
958,225

$
$
$
$

353,494
491,730
409,121

$

$ 1,536,966

$
$
$
$

32,777

$

25,756

$
$
$
$
$
$
$

162,983
302,837
10,949
26,686
2,705
24,566

(53,935)
(75,027)
(62,423)
(3,930)

$
$
$
$
$
$
$

41,163
76,485
2,765
6,740
683
6,204

PRO RATA SHARE OF EXPENSES

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ECO FILL 1.0 & MAX
ECO FILL DELUXE 1.0
ECO-FLOW
ECO CARAFE
ECO FILTER
ECOSAVE
ECO-PURE

$

13

$

76,026

$
$

233,634
732

$
$

237,674
1,142

$

714,676

$
$
$
$

345,374
1,727
359
845,066

NET PROFIT

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ECO FILL 1.0 & MAX
ECO FILL DELUXE 1.0
ECO-FLOW
ECO CARAFE
ECO FILTER
ECOSAVE
ECO-PURE

$
$
$
$
$
$
$

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-

$
$
$
$
$
$
$

34,929
-

$
$
$
$
$
$
$

205,906
645
-

$
$
$
$
$
$
$

273,462
1,315
822,290
-

$
$
$
$
$
$
$

(26,969)
(135)
(28)
(65,987)
-

$ (255,427) $
$
(1,041) $
$ (220,910) $
$ (464,098) $
$
$
$
$
$ (15,875) $

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Source of Data for Table 3: Ex. 274. The amounts awarded to plaintiff with respect to
Claim 1, as set forth in Table 1 of the Findings of Fact and Conclusions of Law, docket
no. 149 at 30, are identical to the figures appearing in the column of Table 3 (highlighted
in orange) that reflects the net profits for 2019. The net losses experienced during 2016,
2017, and 2018 were not used as offsets or otherwise considered. The profits to be
disgorged to plaintiff in connection with Claim 2, which are summarized in Table 2 of the
Findings of Fact and Conclusions of Law, docket no. 149 at 32, were computed as
follows. The $514,326 awarded as to ECO FILL 1.0 (and MAX) for the period from
January 1, 2012, to October 31, 2016, equals the sum of the figures in Table 3 for 2012
through 2015 (highlighted in blue); the loss sustained in 2016 was not included. The
$822 related to ECO FILL DELUXE 1.0 (see items highlighted in pink on Table 3)
consists of the $645 in profit realized in 2014, and 13.5% of the profit generated in 2015
(or $177), based on a cut-off date of April 1, 2015, resulting from the patent litigation,
and the monthly sales figures provided in Trial Exhibit 473.

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