Counterfeit Law Blog

In Microsoft v. Wubbena, decided February 28, 2007 and reported at 2007 WL 656688, the United States District Court in Atlanta rejected Microsoft's request for the maximum statutory damages allowable for non-willful conduct, despite finding, in granting Microsoft attorneys' fees, that the defaulting defendants' counterfeiting of Microsoft's trademarks was willful.  Although Microsoft maintained that the Defendants' actions were willful, it had elected to ask for statutory damages based on the maximum statutory limits for non-willful conduct, rather than evoking the enhanced damage provisions of the Copyright and Lanham Acts applicable to willful counterfeiters. Microsoft thus requested statutory damages of $610,000: $30,000 for each of the seven allegedly infringed copyrights (the maximum for non-willful conduct under the Copyright Act), and $100,000 for each of four marks alleged to have been counterfeited (the maximum for non-willful conduct under the Lanham (trademark) Act.  

In declining to award the amount requested by Microsoft, the Court stated that the purpose of a range of statutory damages is to "allow courts to calibrate statutory damage awards to the scope of the conduct and the culpability of the defendant."  It then articulated the belief that "statutory damage maximums should be reserved for cases of notable scope or particularly egregious conduct."  Because Microsoft had not alleged any facts concerning the scope of the defendants' operations, and had chosen not to pursue damages for willfulness, in the absence of any allegation that the defendants had operated on a "notable scale," the Court declined to impose the maximum statutory award.  Instead, it awarded an amount it felt would be "still substantial enough to compensate Microsoft and to deter future potential infringers" -- $15,000 per infringed copyright, and $40,000 per counterfeited trademark, for a total statutory damage award of $265,000.

Interestingly, in finding Microsoft's entitled to attorneys' fees and costs under the Lanham Act, which limits attorneys' fees in trademark cases to "exceptional cases," the Court relied on Microsoft's allegations that defendants' trademark infringements were willful because each was warned to cease its infringement of Microsoft's intellectual property, but persisted, to find the case exceptional.   Thus, it held, "[e]ven though Microsoft elected not to ask for [statutory] damages consistent with willful conduct, an award of attorneys fees is in this context appropriate."