Copyright infringers could be held liable under the Lanham Act following furniture dispute

In Jason Scott Collection, Inc v Trendily Furniture, LLC (21-16978; 9th Cir; 30 May 2023), the US Court of Appeals for the Ninth Circuit found that liability under the Copyright Act and the Lanham Act are not mutually exclusive and that liability under the former does not negate trade dress damages under the latter. 

District court rules against Trendily Furniture

Jason Scott Collection (JSC) and Trendily Furniture are high-end furniture manufacturers that sell their products in the Texas market. In 2016 Trendily intentionally copied three unique designs by JSC and sold them to Texan retailers. Both collections featured heavy carved wood pieces with detailed embellishments and metal elements; the record showed that Trendily’s designs had been based on photographs of the pre-existing JSC collection. They were so similar that even JSC had initially mistaken the furniture as its own when confronted by a retailer.

After JSC filed suit, the district court granted it summary judgment on the copyright claim. Following a bench trial, the court further held Trendily liable on the trade dress claim, awarding JSC nearly $133,000 in prospective annual profits lost over three years. This compensation amounted to roughly six times the almost $20,000 in retrospective gross profits awarded on JSC’s copyright claim. Consequently, Trendily appealed.

Trendily Furniture’s appeal

To obtain a judgment for trade dress infringement, a plaintiff must prove that:

• the claimed trade dress is non-functional;
• the claimed trade dress serves a source-identifying role because it is either inherently distinctive or has acquired a secondary meaning; and
• the defendant’s product creates a likelihood of confusion.

Trendily argued that the parties involved agreed that the trade dress in question was not inherently distinctive and that JSC failed to establish a secondary meaning or a likelihood of confusion. Conversely, the Ninth Circuit found that the district court had amassed adequate evidence of secondary meaning, citing incidents of copying and confusion among retailers and consumers in the high-end furniture market. The appeal court also ruled that the lower court had correctly identified a likelihood of confusion, emphasising Trendily’s precise and intentional imitations of JSC pieces, which led to retailer confusion.

With regard to the damages award, Trendily argued that because copying is a commercially acceptable and necessary action in terms of competition, the company should be held liable under the Copyright Act rather than for trade dress infringement under the Lanham Act.

However, the Ninth Circuit affirmed that liability under the Copyright and Lanham Acts are not mutually exclusive and that liability under the former did not negate the judgment against Trendily for trade dress damages under the latter. The court then affirmed the trade dress damages award, finding that the prospective damages – incurred when the existence of Trendily’s imitative furniture destroyed one of JSC’s business relationships – were reasonably foreseeable and had been “satisfactorily demonstrated”. The ruling emphasised that the law requires only a “crude measures of damages in cases of intentional infringement”.

Finally, the Ninth Circuit affirmed the district court’s award of attorneys’ fees for “willful and brazen” infringement, agreeing that Trendily’s actions (ie, copying JSC’s trade dress, ignoring cease-and-desist letters and resisting the court’s injunction) made the case “exceptional”. The court also awarded attorneys’ fees for the appeal.