Y.Y.G.M. Sa v. Redbubble, Inc. ( 2023 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
Y.Y.G.M. SA, DBA Brandy Melville, No. 21-56150
a Swiss corporation,
D.C. No.
Plaintiff-Appellant, 2:19-cv-04618-
RGK-JPR
v.
REDBUBBLE, INC., OPINION
Defendant-Appellee.
Y.Y.G.M. SA, DBA Brandy Melville, No. 21-56236
a Swiss corporation,
D.C. No.
Plaintiff-Appellee, 2:19-cv-04618-
RGK-JPR
v.
REDBUBBLE, INC.,
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of California
R. Gary Klausner, District Judge, Presiding
2 Y.Y.G.M. SA V. REDBUBBLE, INC.
Argued and Submitted January 12, 2023
Pasadena, California
Filed July 24, 2023
Before: Consuelo M. Callahan, Ryan D. Nelson, and Holly
A. Thomas, Circuit Judges.
Opinion by Judge R. Nelson
SUMMARY*
Trademark
The panel affirmed in part and vacated in part the district
court’s judgment after a jury trial in an action brought under
the Lanham Act against Redbubble, Inc., by Y.Y.G.M. SA,
doing business as Brandy Melville.
Brandy Melville, a manufacturer of its own clothing,
home goods, and other items, owns several trademarks,
including the registered Brandy Melville Heart Mark and LA
Lightning Mark. Brandy Melville alleged infringement by
Redbubble, which owns and operates an online marketplace
where artists can upload their work to be printed on various
products and sold. The district court granted summary
judgment to Redbubble on all of Brandy Melville’s claims
except its contributory infringement and counterfeiting
claims. The jury found Redbubble liable for (1) willful
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
Y.Y.G.M. SA V. REDBUBBLE, INC. 3
contributory counterfeiting of the Heart Mark and Lightning
Mark, (2) contributory infringement of those two marks, and
(3) contributory infringement of unregistered trademarks
that were “Brandy Melville” variations. After the jury’s
verdict, the district court granted Redbubble’s motion for
judgment as a matter of law on the contributory
counterfeiting claim for the Heart Mark. The district court
let the verdict stand for the remaining claims, and it denied
Brandy Melville a permanent injunction, attorney fees, and
prejudgment interest.
Vacating the district court’s order granting in part and
denying in part Redbubble’s motion for judgment as a matter
of law, the panel held that a party is liable for contributory
infringement when it continues to supply its product to one
whom it knows or has reason to know is engaging in
trademark infringement. A party meets this standard if it is
willfully blind to infringement. Agreeing with other circuits,
the panel held that contributory trademark liability requires
the defendant to have knowledge of specific infringers or
instances of infringement. General knowledge of
infringement on the defendant’s platform, even of the
plaintiff’s trademarks, is not enough to show willful
blindness. The panel remanded for reconsideration of
Redbubble’s motion under the correct legal standard.
The panel held that, in granting judgment as a matter of
law to Redbubble on the claim for contributory trademark
counterfeiting as to the Heart Mark, the district court further
erred by failing to evaluate the evidence of likelihood of
confusion under the correct legal standard. The district court
erroneously glossed over whether the Heart Mark was so
strong and distinctive that its presence alone caused
confusion. The district court also addressed whether the
parties’ products were “stitch-for-stitch” copies, rather than
4 Y.Y.G.M. SA V. REDBUBBLE, INC.
addressing whether, based on the record, confusion could
have resulted because the products on Redbubble’s website
bearing the Heart Mark were the kinds of trademarked goods
that Brandy Melville sells.
The panel also vacated the district court’s denial of
Brandy Melville’s motion to permanently enjoin Redbubble
from referencing, mentioning, and using BRANDY
MELVILLE, Brandy Melville’s registered trademarks, and
Brandy Melville’s unregistered variations. The district court
concluded that Brandy Melville’s pre-litigation delay
rebutted a statutory presumption of irreparable harm, and the
remaining testimony from a Brandy Melville employee
could not establish irreparable harm. The panel held that the
district court did not err by considering the delay, but it
abused its discretion in determining that the statutory
presumption was rebutted and that there was no irreparable
harm because it improperly discounted the relevance of
future harm. The panel remanded for the district court to
reconsider, after redetermining Redbubble’s liability, how
the existence of future harm affects irreparable harm and the
other factors governing injunctive relief.
The panel affirmed the district court’s denial of
prejudgment interest to Brandy Melville, which elected and
was awarded statutory damages under 15 U.S.C. § 1117(c),
rather than actual damages and profits under § 1117(a). The
panel held that allowing prejudgment interest on statutory
damages would be inconsistent with the rationale underlying
statutory damages, which serve more purposes than only
compensating the victim.
Y.Y.G.M. SA V. REDBUBBLE, INC. 5
COUNSEL
Christopher Landau (argued), Ellis George Cipollone
O’Brien Annaguey LLP, Washington, D.C.; Keith J.
Wesley, Ryan Q. Keech, and Jason Y. Kelly, Ellis George
Cipollone O’Brien Annaguey LLP, Los Angeles, California;
for Plaintiff-Appellant.
Jospeh Gratz (argued) and Matthaeus Martino-Weinhardt,
Morrison & Foerster LLP, San Francisco, California;
Allyson R. Bennett, Morrison and Foerster LLP, Los
Angeles, California; Kenneth B. Wilson, Coastwide Legal,
Half Moon Bay, California; Daralyn J. Durie, Morrison &
Foerster, San Francisco, California; for Defendant-Appellee.
OPINION
R. NELSON, Circuit Judge:
After a jury found that Redbubble, Inc. had violated
Brandy Melville’s trademarks, the district court granted
partial judgment as a matter of law to Redbubble on one
trademark claim. Both parties appealed. Redbubble asks us
to decide the knowledge standard governing contributory
trademark liability, and Brandy Melville contends it was
entitled to post-trial relief. We partially affirm, partially
vacate, and remand.
I
Y.Y.G.M. SA, doing business as Brandy Melville,
manufactures its own clothing, home goods, and other items.
It owns several trademarks, including the Brandy Melville
6 Y.Y.G.M. SA V. REDBUBBLE, INC.
Heart Mark (Heart Mark) and the LA Lightning Mark
(Lightning Mark). The Heart Mark consists of the words
“Brandy Melville” in black font with a pink heart in between
them. It is registered for use on clothing, stickers, jewelry,
and ornaments, and Brandy Melville sells signs and wall
hangings bearing the Heart Mark. The Lightning Mark
features the words “Los Angeles” in yellow font with the “L”
styled like a lightning bolt. It is registered for use on
clothing, and Brandy Melville sells t-shirts and hooded
sweatshirts bearing the Lightning Mark.
Redbubble owns and operates an online marketplace
where artists can upload their artwork to be printed on
various products and sold. Redbubble collects payment,
sends the order to a manufacturer, arranges shipping, and
handles refunds. Redbubble does not inspect goods before
shipping, as third parties fulfill orders and ship products in
Redbubble-branded packaging. Artists and consumers have
no direct contact.
In 2018, Brandy Melville notified Redbubble of
infringing products listed on Redbubble’s website.
Redbubble removed those listings and requested that Brandy
Melville notify it of additional listings it wanted removed.
After finding additional infringing products, Brandy
Melville sent a second notice the next day.
A year later, Brandy Melville sued Redbubble under
various trademark theories. The district court granted
summary judgment to Redbubble on all of Brandy Melville’s
claims except the contributory infringement and
counterfeiting claims. The parties went to trial on those
claims, and a jury found Redbubble liable for (1) willful
contributory counterfeiting of the Heart Mark and Lightning
Mark, (2) contributory infringement of those two marks, and
Y.Y.G.M. SA V. REDBUBBLE, INC. 7
(3) contributory infringement of unregistered trademarks
that were “Brandy Melville” variations.
After the verdict, the district court granted Redbubble’s
motion for judgment as a matter of law on the contributory
counterfeiting claim for the Heart Mark because Brandy
Melville failed to present evidence of any products on
Redbubble’s website with a spurious Heart Mark similar to
legitimate Brandy Melville products. The district court let
the verdict stand for the remaining claims.
The district court also denied Brandy Melville a
permanent injunction, attorney fees, and prejudgment
interest. First, it held that Brandy Melville’s one-year delay
between finding infringing products on Redbubble’s website
and filing a lawsuit undercut the requisite irreparable harm.
Second, it concluded that Brandy Melville was not entitled
to attorney fees because the case was not “exceptional”
under the Lanham Act, 15 U.S.C. § 1051, et seq. Finally, it
held that 15 U.S.C. § 1117(a) does not allow prejudgment
interest.
Redbubble appeals the denial of judgment as a matter of
law for the contributory infringement claims and for willful
contributory counterfeiting of the Lightning Mark.
Brandy Melville appeals the district court’s grant of
judgment as a matter of law to Redbubble on the
contributory counterfeiting claim for the Heart Mark, and the
denial of a permanent injunction, attorney fees, and
prejudgment interest.
II
We have jurisdiction under 15 U.S.C. § 1121 and 28
U.S.C. § 1291.
8 Y.Y.G.M. SA V. REDBUBBLE, INC.
“We review de novo a district court’s decision to grant
or deny judgment as a matter of law.” Louis Vuitton
Malletier, S.A. v. Akanoc Sols., Inc., 658 F.3d 936, 941 (9th
Cir. 2011).
“We review a trial court’s decision to deny injunctive
relief for an abuse of discretion,” Westinghouse Elec. Corp.
v. Gen. Cir. Breaker & Elec. Supply Inc., 106 F.3d 894, 903
(9th Cir. 1997), but review the “legal standards it applied . . .
de novo,” Polo Fashions, Inc. v. Dick Bruhn, Inc., 793 F.2d
1132, 1135 (9th Cir. 1986).
We review a decision whether to award fees under the
Lanham Act for abuse of discretion. Nutrition Distrib. LLC
v. IronMag Labs, LLC, 978 F.3d 1068, 1081 (9th Cir. 2020).
We review de novo a district court’s interpretation of
whether prejudgment interest is permitted under the statute,
Polar Bear Prods., Inc. v. Timex Corp., 384 F.3d 700, 716
(9th Cir. 2004), and for abuse of discretion the grant or denial
of prejudgment interest, Acosta v. City Nat’l Corp., 922 F.3d
880, 885 (9th Cir. 2019).
III
A
We begin with Redbubble’s argument that the district
court applied the wrong standard for contributory liability
under the Lanham Act, a novel question before our court.
The Lanham Act provides a civil cause of action against
anyone who “without the consent of the registrant” uses in
commerce a “reproduction, counterfeit, copy, or colorable
imitation of a registered mark in connection with the sale . . .
of any goods or services on or in connection with which such
use is likely to cause confusion, or to cause mistake, or to
Y.Y.G.M. SA V. REDBUBBLE, INC. 9
deceive.” 15 U.S.C. § 1114(1)(a). A party that
“intentionally induces another to infringe a trademark” or
who “continues to supply its product to one whom it knows
or has reason to know is engaging in trademark
infringement” is “contributorially responsible for any harm
done as a result of the deceit.” Inwood Lab’ys, Inc. v. Ives
Lab’ys, Inc., 456 U.S. 844, 854 (1982). This appeal is about
the second form of contributory liability recognized in
Inwood and the meaning of the “knows or has reason to
know” standard. Id.We have recognized that a party meets the “knows or has
reason to know” standard if it is willfully blind to
infringement. See Fonovisa, Inc. v. Cherry Auction, Inc., 76
F.3d 259, 265 (9th Cir. 1996). Willful blindness requires (1)
“subjective[ ] belie[f] that infringement was likely
occurring” and (2) “deliberate actions to avoid learning
about the infringement.” Luvdarts, LLC v. AT&T Mobility,
LLC, 710 F.3d 1068, 1073 (9th Cir. 2013). In other words,
the defendant must have “t[aken] active steps to avoid
acquiring knowledge.” Id. Redbubble contends that willful
blindness requires knowledge of specific infringers or
instances of infringement. Brandy Melville argues that
specific knowledge is not required because defendants have
a duty to take reasonable corrective action upon gaining
general awareness.
While this question is novel in our circuit, we do not
write on a blank slate. For contributory copyright
infringement, we require knowledge of specific infringers or
instances of infringement. See id. at 1072–73. In Luvdarts,
we concluded that the defendant lacked specific knowledge
despite receiving notices that were “150-page-long lists of
titles” that the plaintiff had copyrighted. Id. We explained
that these notices were insufficient because they did not
10 Y.Y.G.M. SA V. REDBUBBLE, INC.
“identify which of these titles were infringed, who infringed
them, or when the infringement occurred.” Id. at 1073.
“Willful blindless of specific facts would establish
knowledge for contributory liability,” we explained, but the
plaintiff’s allegation of “indifferen[ce] to the risk of
copyright infringement” was legally insufficient. Id. And
because “trademark infringement liability is more narrowly
circumscribed than copyright infringement,” the standard for
contributory trademark infringement would be at least as
demanding. See Fonovisa, 76 F.3d at 265.
Such a rule also accords with our sister circuits. In a case
involving counterfeit Tiffany jewelry being sold on eBay,
the Second Circuit held that “a service provider must have
more than a general knowledge or reason to know that its
service is being used to sell counterfeit goods” to be liable
for contributory trademark infringement. Tiffany (NJ) Inc.
v. eBay Inc., 600 F.3d 93, 107 (2d Cir. 2010). Instead,
defendants must have “contemporary knowledge of which
particular listings are infringing or will infringe in the
future.” Id. (emphasis added); see also Omega SA v. 375
Canal, LLC, 984 F.3d 244, 255 (2d Cir. 2021)
(“[C]ontributory trademark infringement based on willful
blindness does not create liability simply because of a
defendant’s ‘general knowledge as to counterfeiting on its’
property . . . or because a defendant ‘fail[ed] to anticipate
that others would use its service to infringe a protected
mark.’” (quoting Tiffany, 600 F.3d at 107, 110 n.15)).
Because Tiffany “did not identify particular sellers” who
were offering counterfeit goods and eBay removed
counterfeit listings identified by other sources, eBay was not
liable for contributory trademark infringement. Tiffany, 600
F.3d at 109.
Y.Y.G.M. SA V. REDBUBBLE, INC. 11
The Fourth Circuit reached a similar conclusion.
“[G]eneral knowledge that some percentage of the
purchasers of a product or service is using it to engage in
infringing activities” is insufficient for contributory
trademark infringement because “the defendant must supply
its product or service to ‘identified individuals’ that it knows
or has reason to know are engaging in trademark
infringement.” Rosetta Stone Ltd. v. Google, Inc., 676 F.3d
144, 163 (4th Cir. 2012). There, the plaintiff survived
summary judgment with evidence of “the dates when
Rosetta Stone advised Google that a Sponsored Link was
fraudulent, the domain names associated with each such
Sponsored Link, the text of each Sponsored Link, and the
date and substance of Google’s response.” Id. (citation
omitted). This amounted to over 200 instances of
infringement, and Google apparently allowed the same
advertisers to use the Rosetta Stone mark after these notices.
Id. This evidence precluded summary judgment because it
established a question of fact as to whether Google refused
to act upon specific knowledge. Id. at 165.
So too in the Tenth Circuit. That court’s decision
concerned Google’s AdWords program, which allowed
advertisers to bid on keywords that, when entered into
Google’s search engine, returned the advertiser’s sponsored
links. See 1-800 Contacts, Inc. v. Lens.com, Inc., 722 F.3d
1229, 1235 (10th Cir. 2013). 1-800 Contacts owned the
mark “1800CONTACTS.” Id. After discovering that
Google searches for its own mark resulted in paid ads for
Lens.com websites, 1-800 Contacts sued Lens.com for
12 Y.Y.G.M. SA V. REDBUBBLE, INC.
service-mark infringement.1 Id. Discovery revealed that
Lens.com did not bid on 1-800 Contacts’s service mark, but
two Lens.com affiliates (third parties who publish ads on its
behalf) had bid on the keyword “1800Contacts” and its close
variants. Id. at 1237. One of those affiliates had published
an ad for a Lens.com website that used the phrase “1800
Contacts.” Id.The Tenth Circuit concluded, on summary judgment,
that “a rational juror could find that Lens.com knew that at
least one of its affiliates was using 1-800’s service mark in
its ads yet did not make reasonable efforts to halt the
affiliate’s practice.” Id. at 1252. The identity of the affiliate
did not matter because Lens.com did not need to “know the
identity of the infringer to stop the allegedly infringing
practice without affecting legitimate conduct[.]” Id. at 1254.
Rather, once Lens.com “learned that one of its affiliates had
used 1-800’s mark in the content of an ad,” sending an email
blast to all affiliates forbidding such use would stop
infringement without interfering with lawful conduct. Id.That said, the court recognized that the defendant “has no
obligation under contributory-infringement doctrine to stop
a practice . . . simply because the practice might be exploited
by infringers.” Id. at 1253–54. But because Lens.com knew
of a specific instance of infringement and was uniquely
positioned to stop infringement without shutting down
lawful business, its failure to do so could result in
contributory liability.
1
A service mark is “similar to a trademark,” 1-800 Contacts, 722 F.3d
at 1238, and is used “to identify and distinguish the services of one
person . . . from the services of others and to indicate the source of the
services,” 15 U.S.C. § 1127.
Y.Y.G.M. SA V. REDBUBBLE, INC. 13
Common to these cases is that willful blindness requires
the defendant to be aware of specific instances of
infringement or specific infringers. Without that knowledge,
the defendant need not search for infringement. General
knowledge of infringement on the defendant’s platform—
even of the plaintiff’s trademarks—is not enough to show
willful blindness. See Tiffany, 600 F.3d at 110 (“eBay
appears to concede that it knew as a general matter that
counterfeit Tiffany products were listed and sold through its
website. . . . Without more, however, this knowledge is
insufficient to trigger liability.”). We hold that willful
blindness for contributory trademark liability requires the
defendant to have specific knowledge of infringers or
instances of infringement.
As for Brandy Melville’s contention that Redbubble had
a duty to look for infringement, persuasive decisions from
other circuits hold that the defendant has no such duty until
it gains the specific knowledge necessary to trigger liability.
“There is no inherent duty to look for infringement by others
on one’s property.” Omega SA, 984 F.3d at 255; see also
Hard Rock Cafe Licensing Corp. v. Concession Servs., Inc.,
955 F.2d 1143, 1149 (7th Cir. 1992) (The willful blindness
standard “does not impose any duty to seek out and prevent
violations.”). Instead, willful blindness arises when a
defendant was “made aware that there was infringement on
its site but . . . ignored that fact.” Omega SA, 984 F.3d at
255 (quoting Tiffany, 600 F.3d at 110 n.15).
Once a defendant knows about specific instances of
infringement, “bona fide efforts to root out infringement”
could “support a verdict finding no liability, even if the
defendant was not fully successful in stopping
infringement.” Id. The duty to stop (or root out)
infringement does not kick in, however, until the defendant
14 Y.Y.G.M. SA V. REDBUBBLE, INC.
has that specific knowledge. And, again, that duty only
covers specific instances of infringement the defendant
knows or has reason to know about. See Tiffany, 600 F.3d at109–10 (holding that addressing specific notices of
counterfeit Tiffany products was sufficient, even though
eBay “knew as a general matter that counterfeit Tiffany
products were listed and sold through its website.”).
What constitutes bona fide efforts will vary based on the
context. For instance, a reasonable response for a flea
market might not be reasonable for an online marketplace
with millions of listings. Cf. Coach, Inc. v. Goodfellow, 717
F.3d 498, 504 (6th Cir. 2013) (affirming contributory
liability where defendant, the owner and operator of a flea
market, “had actual knowledge that the infringing activity
was occurring” and knew of “particular vendors” that were
infringing yet failed to “deny access to offending vendors or
take other reasonable measures”). Removing infringing
listings and taking appropriate action against repeat
infringers in response to specific notices may well be
sufficient to show that a large online marketplace was not
willfully blind. See Tiffany, 600 F.3d at 109 (“[A]lthough
[notices of claimed infringement] and buyer complaints gave
eBay reason to know that certain sellers had been selling
counterfeits, those sellers’ listings were removed and repeat
offenders were suspended from the eBay site.”).
We accordingly vacate and remand for reconsideration
of Redbubble’s motion for judgment as a matter of law under
the correct legal standard.2
2
We do not reach whether Brandy Melville showed willfulness to
warrant heightened damages for the Lightning Mark. See § 1117(c)(2).
Y.Y.G.M. SA V. REDBUBBLE, INC. 15
B
We next consider Brandy Melville’s appeal. Brandy
Melville asserts that the district court erred by granting
judgment as a matter of law to Redbubble on its contributory
trademark counterfeiting claim as to the Heart Mark and
denying a permanent injunction, attorney fees, and
prejudgment interest.
1
The district court set aside the jury verdict and granted
judgment as matter of law to Redbubble on one trademark
claim. It held that a contributory trademark counterfeiting
violation had to occur with similar products. The district
court held that Brandy Melville failed to show that any
product bearing the Heart Mark from Redbubble’s website
was similar to legitimate Brandy Melville products. Brandy
Melville argues that it only needs to show that Redbubble
used the trademark on goods of the type for which the Heart
Mark is registered, rather than on goods comparable to
Brandy Melville products being sold. Redbubble defends
the district court’s reasoning and argues that counterfeiting
requires comparison of the whole product, not just the
marks. Although the district court may reach a different
conclusion when it reconsiders contributory liability under
the specific knowledge standard, a separate error
independently warrants vacating and remanding here.
We instead vacate the district court’s willfulness finding and the
damages awarded consistent with that finding. We remand for the
district court to reconsider that issue after it revisits the motion for
judgment as a matter of law, as its determination of liability precedes
damages.
16 Y.Y.G.M. SA V. REDBUBBLE, INC.
Like trademark infringement claims, trademark
counterfeiting requires the plaintiff to show a likelihood of
confusion. See Arcona, Inc. v. Farmacy Beauty, LLC, 976
F.3d 1074, 1079 (9th Cir. 2020). The use of a counterfeit “is
obviously intended to confuse consumers,” and we have
described a counterfeiting claim as “merely the hard core or
first degree of trademark infringement.” Id. (cleaned up).
The likelihood of confusion standard requires trial courts to
“review the product as a whole.” Id. at 1080. Even identical
marks may be unlikely to confuse if the geographic market,
industry, or product design sufficiently differentiates the
counterfeit from the original. Id. On the other hand, “[t]here
may be times the mark itself is so strong in the marketplace
that the use of an identical mark by itself may cause
consumer confusion, even if other aspects of the products are
different.” Id. at 1080 n.4.
The district court erred by glossing over whether the
Heart Mark was so strong and distinctive that its presence
alone causes confusion. It also erred because it analyzed the
wrong question. The question is not, as the district court
concluded, whether products are “stitch-for-stitch” copies; it
is whether, based on the record, confusion could have
resulted because the products on Redbubble’s website
bearing the Heart Mark are the kinds of trademarked goods
Brandy Melville sells.
The Lanham Act defines a counterfeit as “a spurious
mark which is identical with, or substantially
indistinguishable from, a registered mark.” 15 U.S.C.
§ 1127. And a “trademark” is “any word, name, symbol, or
device, or any combination thereof” that is “used by a person
. . . to identify and distinguish his or her goods, including a
unique product, from those manufactured or sold by
Y.Y.G.M. SA V. REDBUBBLE, INC. 17
others . . . .” Id. The text does not require counterfeit goods
to be exact replicas of existing merchandise.
This makes sense given that a “strong and distinctive”
trademark may “have acquired great fame” on its own, to the
point that its mere presence confuses, even on different
products. Playboy Enters., Inc. v. Baccarat Clothing Co.,
692 F.2d 1272, 1274 (9th Cir. 1982); see also Arcona, 976
F.3d at 1080 n.4. Confusion is more likely here because
Redbubble’s website sells “exact copies” of the Heart Mark
on trademarked goods that Brandy Melville sells (home
décor) and other goods for which its trademark is only
registered (stickers). See Au-Tomotive Gold, Inc. v.
Volkswagen of Am., Inc., 457 F.3d 1062, 1076 (9th Cir.
2006). The key inquiry is whether there is likelihood of
confusion, not whether the products are seemingly identical.
See State of Idaho Potato Comm’n v. G & T Terminal
Packaging, Inc., 425 F.3d 708, 720–22 (9th Cir. 2005)
(likelihood of confusion from unlicensed use of service mark
where mark owner sells nothing).
The district court failed to evaluate the evidence of
confusion under the correct legal standard. The evidence
that Brandy Melville produced at trial could support a jury
finding of likelihood of confusion. Brandy Melville offered
screenshots from Redbubble’s website of a metal print of the
Heart Mark, a wall tapestry featuring the Heart Mark
repeated over multiple rows, and a sticker with the Heart
Mark. Brandy Melville’s executive Vice President and
Chief Financial Officer testified that he saw the Heart Mark
on t-shirts and hats on Redbubble. Brandy Melville also
introduced a spreadsheet of Redbubble items substantially
like the Heart Mark, including stickers. As for Brandy
Melville’s own products, it submitted photos of its signs and
wall hangings bearing the Heart Mark. The Patent and
18 Y.Y.G.M. SA V. REDBUBBLE, INC.
Trademark Office Registration for the Heart Mark says that
it is used with “stickers,” “hats,” and “tee-shirts,” among
other items. The district court should have evaluated
whether this evidence supported a likelihood of confusion
without requiring a stitch-for-stitch copy.
Because we conclude that the district court must
reevaluate whether to enter judgment as a matter of law on
the contributory liability claims, the district court may
reevaluate the likelihood of confusion in light of those
rulings on remand. We therefore vacate the district court’s
partial grant of judgment as a matter of law to Redbubble
and remand for further proceedings consistent with this
opinion.
2
Next, Brandy Melville appeals the district court’s denial
of a permanent injunction. Separate from the need to
reevaluate the merits on remand, the district court’s analysis
on remand requires correction of errors in its evaluation of
whether Brandy Melville experienced irreparable harm.
Normally, a party seeking a permanent injunction must
show “(1) that it has suffered an irreparable injury; (2) that
remedies available at law, such as monetary damages, are
inadequate to compensate for that injury; (3) that,
considering the balance of hardships between the plaintiff
and defendant, a remedy in equity is warranted; and (4) that
the public interest would not be disserved by a permanent
injunction.” eBay Inc. v. MercExchange, LLC, 547 U.S.
388, 391 (2006); see also La Quinta Worldwide LLC v.
Q.R.T.M., S.A. de C.V., 762 F.3d 867, 879 (9th Cir. 2014)
(applying eBay factors in trademark infringement case). The
Lanham Act adds a statutory layer to the irreparable harm
analysis for trademark infringement. The Act benefits
Y.Y.G.M. SA V. REDBUBBLE, INC. 19
trademark holders by creating “a rebuttable presumption of
irreparable harm” when a permanent injunction is sought to
remedy an established trademark violation. 15 U.S.C.
§ 1116(a).
Brandy Melville sought to permanently enjoin
Redbubble from referencing, mentioning, and using
BRANDY MELVILLE, Brandy Melville’s registered
trademarks, and Brandy Melville’s unregistered variations.
The district court concluded that Brandy Melville’s pre-
litigation delay rebutted the statutory presumption. Lacking
the benefit of the presumption, the district court found that
the remaining testimony from a Brandy Melville employee
could not establish irreparable harm. Brandy Melville
argues that pre-litigation delay is legally irrelevant to the
permanent injunction irreparable harm analysis and
alternatively that the district court abused its discretion.
Certainly, the movant’s delay is relevant to a permanent
injunction. Extreme delay in seeking relief, for example, can
give rise to laches, an affirmative defense to a permanent
injunction. See Pinkette Clothing, Inc. v. Cosm. Warriors
Ltd., 894 F.3d 1015, 1027 (9th Cir. 2018); Internet
Specialties W., Inc. v. Milon-DiGiorgio Enters., Inc., 559
F.3d 985, 989–90 (9th Cir. 2009) (“[Laches] embodies the
principle that a plaintiff cannot sit on the knowledge that
another company is using its trademark, and then later come
forward and seek to enforce its rights.”). And delay in
seeking a preliminary injunction may also undermine a
permanent injunction. See Simon Prop. Grp., LP v.
mySIMON, Inc., 282 F.3d 986, 990–91 (7th Cir. 2002)
(considering voluntary abandonment of a preliminary
injunction in determining irreparable harm for a permanent
injunction). The district court did not err by considering the
delay.
20 Y.Y.G.M. SA V. REDBUBBLE, INC.
That said, the district court abused its discretion in
determining that the statutory presumption was rebutted and
that there was no irreparable harm. An abuse of discretion
occurs “where the district court applied the incorrect legal
rule or where the district court’s application of the law to the
facts was: (1) illogical; (2) implausible; or (3) without
support in inferences that may be drawn from the record.”
Ahanchian v. Xenon Pictures, Inc., 624 F.3d 1253, 1258 (9th
Cir. 2010).
Generally, “delay is but a single factor to consider in
evaluating irreparable injury; courts are ‘loath to withhold
relief solely on that ground.’” Arc of Cal. v. Douglas, 757
F.3d 975, 990 (9th Cir. 2014) (quoting Lydo Enters., Inc. v.
City of Las Vegas, 745 F.2d 1211, 1214 (9th Cir. 1984)). A
successful trademark plaintiff “is entitled to effective relief;
and any doubt in respect of the extent thereof must be
resolved in its favor as the innocent producer and against the
[infringer], which has shown by its conduct that it is not to
be trusted.” William R. Warner & Co. v. Eli Lilly & Co., 265
U.S. 526, 532 (1924); accord Levi Strauss & Co. v. Shilon,
121 F.3d 1309, 1314 (9th Cir. 1997).
The significance of the delay depends on context. For
example, “tardiness is not particularly probative in the
context of ongoing, worsening injuries.” Arc of Cal., 757
F.3d at 990. Meanwhile, delay can be dispositive when its
length substantially outweighs any upsides from the
injunction. For instance, in the context of a preliminary
injunction, a three-year delay between when the trademark
holder learned of the infringement and when it filed suit
revealed that “[a]ny injury that [the trademark holder] would
suffer before trial on the merits would be a relatively short
extension of the injury that [the trademark holder]
Y.Y.G.M. SA V. REDBUBBLE, INC. 21
knowingly suffered for three years before it filed suit.” GTE
Corp. v. Williams, 731 F.2d 676, 679 (10th Cir. 1984).
We have emphasized that the Lanham Act’s statutory
presumption underscores the trademark holder’s ability to
control its trademark’s use. In AK Futures LLC v. Boyd
Street Distro, LLC, we affirmed the district court’s finding
that the trademark holder had shown irreparable harm. 35
F.4th 682, 694 (9th Cir. 2022). There, the infringer
submitted a declaration that it would stop selling the
infringing products and argued that the declaration rebutted
the presumption and the showing of irreparable harm. Id.Because the declaration “contain[ed] a number of
admissions that call into question [the infringer’s] ability to
adequately control the flow of products through its store,”
suggesting “a business structure without safeguards against
selling counterfeit products,” we concluded that the
declaration did not rebut the presumption. Id.The district court did not explain how a delay has equal
bearing in the permanent injunction context (where the
injunction protects established rights that a jury found were
violated) rather than the preliminary injunction context
(where the injunction preserves the status quo pending
litigation). See Trump v. Int’l Refugee Assistance Project,
582 U.S. 571, 580 (2017) (per curiam) (“The purpose of [a
preliminary injunction] is not to conclusively determine the
rights of the parties . . . but to balance the equities as the
litigation moves forward.”). Nor did it explain how the
one-year delay indicates that no future harms would result
despite the jury’s verdict in Brandy Melville’s favor on its
infringement claims and Brandy Melville’s testimony about
future harms arising from a loss of control. See Herb Reed
Enters., LLC v. Fla. Ent. Mgmt., Inc., 736 F.3d 1239, 1250
(9th Cir. 2013) (“Evidence of loss of control over business
22 Y.Y.G.M. SA V. REDBUBBLE, INC.
reputation and damage to goodwill could constitute
irreparable harm.”). A Brandy Melville employee testified
that Brandy Melville “take[s] pride in [the] authenticity of
our product, and it seems that Redbubble is just making
knockoffs of our brand, and that is not fair for our customers
receiving a knockoff item that is not actually Brandy
Melville.” Counterfeits also affect Brandy Melville’s sales
strategies because some marks, like the Lightning Mark, go
in and out of circulation and are not always available for
purchase. This testimony goes exactly to harms that arise
from losing control of a trademark. See Herb Reed, 736 F.3d
at 1250; see also adidas Am., Inc. v. Skechers USA, Inc., 890
F.3d 747, 756–57 (9th Cir. 2018) (affirming irreparable
harm finding based on employee testimony about efforts to
control reputation and supply of products). The district court
abused its discretion by discounting the relevance of future
harm. See La Quinta Worldwide, 762 F.3d at 879 (failure to
consider a relevant factor is an abuse of discretion).
We thus vacate the district court’s denial of a permanent
injunction. We remand for the district court to reconsider,
after redetermining Redbubble’s liability, how the existence
of future harm affects irreparable harm and the other factors
governing injunctive relief consistent with this opinion. See
id. at 880 (remanding for reconsideration where “district
court’s analysis does not discuss a fact we think relevant to
weighing the equities”).
3
Finally, Brandy Melville contends that the district court
erred in denying prejudgment interest. Brandy Melville
elected statutory damages under § 1117(c) but sought
prejudgment interest under § 1117(a). The district court
denied prejudgment interest because § 1117(a) does not
Y.Y.G.M. SA V. REDBUBBLE, INC. 23
expressly provide for it. Noting that this is a novel issue in
the Ninth Circuit, the district court explained that the express
inclusion of prejudgment interest under § 1117(b)—the
treble damages provision—suggests that Congress
intentionally excluded prejudgment interest from § 1117(a).
We affirm the district court, but for different reasons.
Section 1117 sets out three types of remedies. When a
plaintiff establishes a violation of any registered mark,
subsection (a) makes available to the plaintiff, subject to
equitable considerations, “(1) defendant’s profits, (2) any
damages sustained by the plaintiff, and (3) the costs of the
action.” § 1117(a). For intentional violations, subsection (b)
provides for “three times such profits or damages, whichever
amount is greater, together with a reasonable attorney’s fee”
and further specifies that “the court may award prejudgment
interest on such amount[.]” § 1117(b). Subsection (c)
allows a plaintiff to elect, “instead of actual damages and
profits under subsection (a), an award of statutory damages”
between $1,000 and $200,000 per counterfeit mark, or for a
willful violation, up to $2,000,000 per counterfeit mark.
§ 1117(c). Only § 1117(b) mentions prejudgment interest.
Brandy Melville elected and was awarded statutory
damages under § 1117(c). Though the district court did not
address the effect of electing damages under § 1117(c), we
find the rationale underlying statutory damages to be
dispositive. “Prejudgment interest serves to compensate for
the loss of use of money due as damages from the time the
claim accrues until judgment is entered, thereby achieving
full compensation for the injury those damages are intended
to redress.” West Virginia v. United States, 479 U.S. 305,
310 n.2 (1987); see also City of Milwaukee v. Cement Div.,
Nat’l Gypsum Co., 515 U.S. 189, 195 n.7 (1995). Statutory
damages differ meaningfully from actual damages: while
24 Y.Y.G.M. SA V. REDBUBBLE, INC.
actual damages only compensate the victim, statutory
damages may compensate the victim, penalize the
wrongdoer, deter future wrongdoing, or serve all those
purposes. See Nintendo of Am., Inc. v. Dragon Pac. Int’l, 40
F.3d 1007, 1011 (9th Cir. 1994); Skydive Ariz., Inc. v.
Quattrocchi, 673 F.3d 1105, 1114–15 (9th Cir. 2012)
(reversing enhancement of actual damages because district
court enhanced damages to punish rather than compensate).
Allowing prejudgment interest on statutory damages
may inflate them to amounts disproportionate to what
Congress thought fit to remedy those harms. Cf. Desire,
LLC v. Manna Textiles, Inc., 986 F.3d 1253, 1270 (9th Cir.
2021) (expressing concern about “potentially astronomical
statutory damages awards” resulting from the district court’s
interpretation). Given the lack of textual authority and the
potential to upset the balance Congress struck in setting the
statutory amounts, we hold that prejudgment interest is not
allowed under § 1117(c). Cf. Matter of Marshall, 970 F.2d
383, 385–86 (7th Cir. 1992) (“There is no reason to think
that adding prejudgment interest improves upon the
accuracy of [a statutory damages provision’s] rough guess
[on the actual damages].”).
The express allowance of prejudgment interest in
§ 1117(b) supports our conclusion. When Congress created
a remedy that operates differently—in that subsection, treble
damages—it specified the availability of prejudgment
interest. Section 1117(c), like § 1117(b), changes the
calculation of damages by substituting a statutory amount,
yet makes no mention of prejudgment interest. This
variation is meaningful, and we presume that Congress’s
Y.Y.G.M. SA V. REDBUBBLE, INC. 25
lack of express inclusion amounts to intentional exclusion.3
See Bittner v. United States, 143 S. Ct. 713, 720 (2023)
(“When Congress includes particular language in one
section of a statute but omits it from a neighbor, we normally
understand that difference in language to convey a difference
in meaning (expressio unius est exclusio alterius).”).
We thus affirm the district court’s denial of prejudgment
interest. See Dittman v. California, 191 F.3d 1020, 1027 n.3
(9th Cir. 1999) (“[T]his court may affirm on any ground
supported by the record.”).4
IV
We hold that contributory trademark liability requires
knowledge of specific infringers or instances of
infringement and accordingly vacate the district court’s
order granting in part and denying in part judgment as a
matter of law for Redbubble and remand for the district court
to reconsider under that standard. We vacate and remand the
denial of a permanent injunction and attorney fees for the
district court to reconsider consistent with this opinion. We
affirm the denial of prejudgment interest. Each party shall
bear its own costs on appeal.
3
Despite electing statutory damages under § 1117(c), Brandy Melville
argues that it is entitled to prejudgment interest under § 1117(a) because
subsection (a) is the general remedial section. Even if subsection (a)
permits prejudgment interest, Brandy Melville elected to recover
statutory damages under subsection (c) “instead of actual damages and
profits under subsection (a).” § 1117(c) (emphasis added). Thus, §
1117(a) is inapplicable.
4
We vacate the district court’s order denying Brandy Melville attorney
fees and remand for the district court to reconsider whether to award such
fees following its evaluation of Redbubble’s motion for judgment as a
matter of law.
26 Y.Y.G.M. SA V. REDBUBBLE, INC.
AFFIRMED IN PART, VACATED IN PART, AND
REMANDED.