Black & Decker Corp. v. Positec USA Inc., 118 F. Supp. 3d 1056

Background

Plaintiffs are competing power-tool sellers who allege (1) patent infringement and (2) trademark/trade dress infringement based on a yellow-and-black color scheme; they demand a jury for all claims.
Defendants moved to strike the jury demand as to Plaintiffs’ trademark-related claim seeking Defendants’ profits under 15 U.S.C. § 1117(a).
The statutory text of § 1117(a) directs that the court “shall assess such profits and damages or cause the same to be assessed under its direction,” raising the question whether the Lanham Act itself creates a jury right.
The court analyzed whether a jury right arises from statute or the Seventh Amendment; statutory sources were inconclusive and Dairy Queen suggested constitutional analysis was appropriate.
Under Seventh Amendment precedent, the court applied the two-prong test (historical analog and legal/equitable nature), considered precedent and functional considerations, and focused on whether profits are sought as a proxy for damages (legal) versus for unjust enrichment/deterrence (equitable).
The court concluded Plaintiffs presented sufficient evidence (direct competition, side-by-side retail placement, survey showing confusion) to support a damages-proxy theory, and denied Defendants’ motion to strike the jury demand for profits, while reserving the ability to strike later if evidence proves insufficient.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether § 1117(a) creates a statutory right to a jury trial on an accounting of profits	§1117’s language about assessing "profits and damages" suggests profits are monetary like damages and thus triable by jury	Statute does not expressly create a jury right; inference from language is insufficient	Court found statutory authority inconclusive and proceeded to Seventh Amendment analysis
Whether the Seventh Amendment preserves a jury right for Lanham Act profits awards	Where profits function as a proxy for damages (compensation for lost sales), the right to a jury exists	Accounting/disgorgement is traditionally equitable; Dairy Queen and later decisions weigh against a broad jury right	Court held that Seventh Amendment can preserve a jury right where profits are sought as a proxy for damages; denied motion to strike
Whether a plaintiff may manipulate the remedy label to secure a jury	Plaintiffs contend courts gatekeep; if evidence supports profits as proxy for damages, jury is proper	Defendants argue plaintiffs can plead damages label but actually seek equitable disgorgement	Court noted courts can strike jury demand if evidence fails to support the damages-proxy theory; resolved in plaintiffs’ favor on the record here
Whether Plaintiffs’ evidence supports a damages-proxy theory (justifying jury)	Evidence: direct competition, side-by-side retail placement, survey showing 47% confusion — supports actual confusion and diverted sales	Defendants say plaintiffs present no proof of actual loss or diversion; theory is unjust enrichment	Court found the evidence plausibly supports profits-as-proxy-for-damages and thus a jury right on profits claim; preserved court discretion later if proof fails

Key Cases Cited

Int’l Fin. Servs. Corp. v. Chromas Techs. Canada, Inc., 356 F.3d 731 (7th Cir. 2004) (federal procedural law governs jury right when applying state substantive law)
Dairy Queen, Inc. v. Wood, 369 U.S. 469 (1962) (accounting for profits characterized as a legal claim for damages, giving rise to jury right)
Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340 (1998) (discussing jury rights in statutory damages contexts)
Tull v. United States, 481 U.S. 412 (1987) (articulating the two-prong Seventh Amendment test)
City of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687 (1999) (where history is unclear, look to precedent and functional considerations)
Roulo v. Russ Berrie & Co., 886 F.2d 931 (7th Cir. 1989) (identifies three rationales for accounting: unjust enrichment, deterrence, compensation)
BASF Corp. v. Old World Trading Co., 41 F.3d 1081 (7th Cir. 1994) (profits may serve as a proxy for damages)
Grove Fresh Distributors, Inc. v. New England Apple Prods. Co., Inc., 969 F.2d 652 (7th Cir. 1992) (affirmed jury award characterized as damages/profits corresponding to loss of business)
Beacon Theatres, Inc. v. Westover, 359 U.S. 500 (1959) (legal issues preserve jury trial rights even when equity claims exist)